See the original story in Japanese.

I visited Luxembourg back in June to attend the international startup showcase, ICT Spring 2013. The tiny country of Luxembourg is gradually becoming an emerging hub in the European startup community, and its government is trying to support this by organizing international conferences like ICT Spring.

Unlike other startup communities where we can meet a variety of startups at different stages of development, Luxembourg seems to be more of a place for mature startups to grow further.

40% of Europe’s GDP lies within 500km of Luxembourg, making it a very convenient place to do business from. Many people working here actually reside in neighboring countries like Germany and France, and they commute to their offices in Luxembourg across the border every day. Why don’t startups use Luxembourg instead of London, Paris, or Berlin as a marketing hub for their European operations?

During my visit at that time, I learned a lot about the country’s schemes and entities that supporting startups. And I’d like to review some of those here.

P&T Luxembourg

P&T Luxembourg is a 100% state-run company and administrates post and telecommunication business in the country. According to the company’s director Jean-Marie Spaus and international business development head Micaël Weber, the country has a great geographical advantage to host servers for European customers, since it’s located in the heart of the region and thus can reduce data latency. This has encouraged many gaming companies like Nexon and Kabam to set their European headquarters in the country.

Micaël Weber, International business development manager at P&T Luxembourg

The company is now working on deploying fiber-to-the-home to all households in the country according to the government’s strategy, with plans to roll out fiber-optic internet services up to 100Mbps by 2015, and 1Gbps by 2020.

Chamber of Commerce welcomes the world’s startups

Romain Fouarge, the senior advisor at Luxembourg Ministry of Economy and Foreign Trade, talks about their startup invitation policy

Kirchberg is the country’s only business district. It’s close to Fidel Airport, and a big street runs through the district, home to the European Union’s office, governmental offices, and many business centers. The Japanese delegation I was part of visited the Luxembourg Chamber of Commerce, a very fashionable building in the area. But it seems a little small for the number of officials, and an adjacent annex building was under construction.

For a tiny country like Luxembourg, since every local governmental organization has privilege to work like a ministry, their chamber of commerce can play an important role in inviting companies from around the world. They say that if you set up a company in Luxembourg, you or your employees will not always need to live in the country to apply for tax incentives. Their government is very small, which means when you are registering a company or applying for a startup program, you can complete all required documentation in a shorter period.

English is usually spoken business occasions in the country, but it’s not the official language. So when you submit a request to the government, you will be required to complete a form in German, French, or Luxemburgisch. However the ‘Luxembourg for Business’ office (a business promotion agency) in your country can help you with translation to complete the form, so language barriers will not cause much trouble.

Data4: More than just infrastructure

Data4 is a data center company based in the suburban city of Bettembourg, a 30-minute drive from the central area of Luxembourg city. They have data center facilities at four locations in Luxembourg, two in France, and one in the UK, Italy, and Switzerland. The company was previously known as SecureIT, but rebranded since its business now extends beyond just the security business.

In association with consulting firm Ernst & Young and the Luxembourg government, they formed an incubation initiative called Europe4Startups. It lets participating startups receive a number of perks, including complimentary cloud storage subscription. If you’d like to apply for it, you can do so here.

A potential hub for startups?

It seems like entrepreneurs and their co-workers in Luxembourg aren’t so wrapped up in their jobs that they can’t afford to enjoy everyday life. They manage to sustain their startups, without having to sacrifice their happiness. I envy that the location of their workplace, hang-outs, and homes were conveniently located in a tiny area.

Let me give you an example. During the visit, I visited the office of Nexon Europe, which is just across the street from Luxembourg Central Station (Gare Centrale du Luxembourg). It’s a walkable distance to the city’s busiest dining and entertainment district, Place d’Armes. HotCity, the country’s public Wi-Fi service, is available on almost every street corner, so you don’t have any expensive international roaming services. From that district, you can reach forest areas in less than a ten-minute walk. And compared to other European cities, Luxembourg is pretty safe.

For many of our readers, Luxembourg is still less familiar than most other European countries when it comes to business. But the recent announcements that Japanese startups like Chatwork and Skeed have set up their European offices there indicates that things are changing. If you plan to expand your business in the region, Luxumbourg is certainly worth considering as an options.

For all the assistance I received in arranging appointments during the trip, I wish to thank the following people:

• Yuriko Matsuno, Luxembourg for Business (Tokyo), Luxembourg Ministry of the Economy and Foreign Trade
• Ryoko Nagakubo, Luxembourg for Business (Tokyo), Luxembourg Ministry of the Economy and Foreign Trade
• Yasuyo Koga, Lux2Japan