Luxembourg, officially called the Grand Duchy of Luxembourg (in Luxembourgish, Groussherzogtum Lëtzebuerg; in German, Großherzogtum Luxemburg), is one of the twenty-seven sovereign states that make up the European Union. It is a landlocked country, surrounded by Germany, Belgium, and France.

The government of Luxembourg is a unitary parliamentary constitutional monarchy, making it the only sovereign grand duchy currently in existence. The country has a highly developed economy, enjoying one of the highest GDP per capita in the world, according to the World Bank and the International Monetary Fund.

Luxembourg is a member of the European Union, the North Atlantic Treaty Organization, the Organization for Economic Cooperation and Development, the United Nations, and the Benelux, reflecting its political orientation towards economic, political, and military integration. Its capital, Luxembourg City, hosts numerous institutions and agencies of the European Union.

Luxembourg has a liberal system based on stable political ideas. The creation of companies is not subject to any prior administrative control. Instead, the law requires that the exercise of certain professions be subject to a Business Authorization, which must be obtained from the Ministry of the Middle Classes, based on diplomas and/or professional experience.

The most common types of companies are sole proprietorships and SARLs. However, a more in-depth analysis reveals the possibility of obtaining specific tax advantages.