One of the first tasks to complete when moving to Luxembourg is opening a bank account. Luckily it doesn’t take much besides a valid ID and a proof of address.
As of 2016, there are nearly 150 banks in Luxembourg — with over a quarter being foreign bank branches, namely from Germany, France and Switzerland. Although Luxembourg is one the world’s largest financial centres, personal banking in Luxembourg is not particularly difficult for expats, even if they have not opened a new account for some time.
Simône van Schouwenburg, business developer at global banking and financial services provider ING Luxembourg, explains the process of opening a Luxembourg bank account and what you need to know.
Banking in Luxembourg: What you need
“In order to open a bank account in Luxembourg, there are a few documents a bank will request”, says Simône. “What you need to bring depends on the reason you want to open a bank account and which bank you choose.”
A valid ID can be an international passport, an EU/EEA identity card or EU/EEA driver’s licence. A driver’s licence from a country outside the EU will most likely not be accepted, nor would credit cards and bank cards with no photo.
Proof of address
This must show your name and your address in Luxembourg. Simône explains: “It can be a housing contract, proof of mortgage on a house, or even a utilities bill with your name and address officially stated.” Opening a bank account in Luxembourg as a non-resident — in other words, you do not live in the country — is possible, although Simône adds that “the bank’s packages and offerings may differ from those offered to Luxembourg residents.”
You may need to support your Luxembourg address with proof of employment, most commonly shown in the form of your contract. “If you are unemployed, a copy of savings funds under your name can help, or the employer contract of your spouse”, Simône advises.
Proof of income
If you are opening a bank account and wish to access credit cards, debit cards or other financial services, you may need to show a proof of income for a consistent amount of time — “the longer the better”, says Simône, but aim for the past six months to a year.
Banking in Luxembourg: types of accounts and packages
According to Simône, “banks in Luxembourg often offer packages to cater to its customers, whether they are a family settling down in Luxembourg, a business traveller, a young entrepreneur or anything in between.” Banking packages typically include monthly statements, access to transactions, and online and electronic banking, but may include bank cards, loans and investments, insurance, and securities. “Some even include perks such as discounts on particular restaurants and leisure activities”, adds Simône.
Some of the largest banks in Luxembourg are Banque et Caisse d’Epargne de l’Etat Luxembourg (BCEE), Banque Internationale à Luxembourg, BGL BNP Paribas and ING Luxembourg. A larger list off banks in Luxembourg can be found within the Banking in Luxembourg guide.
Savings accounts usually include interest tax, but a portion of the savings can be exempt from this tax — accounts that are opened specifically to save for a house, for example, may have benefits and tax advantages. Students, children and new customers under 30 years old are also often entitled to discounts and benefits. According to Simône, “many employers offer special rates and services if you open an account at the bank they use” – worth a check.
Online banking in Luxembourg
“These days there is little need to visit a bank branch in person; most day-to-day banking can be done at ATMs or, more commonly, online”, says Simône, touting ING’s comprehensive online and mobile banking system. Larger, international banks are more likely to have full-service online banking capabilities, while smaller banks may not offer this service or to the extent that larger banks do.
A good thing to know according to Simône is that non-residents, those who have yet to move to Luxembourg, or even those who simply do not want to visit a bank branch may open a bank account online with many banks. “ING Luxembourg and BGL BNP Paribas, for example, allow residents of Luxembourg, France, Belgium or Germany to immediately open new accounts online”; other banks, such as Banque Internationale à Luxembourg, may allow you to start the process online but require you to send documents via post.
Transferring money abroad
International bank transfers may result in fees from both the issuing and receiving banks. As this is a fixed rate, it is typically cheaper than a money union for large sums, but more expensive than online payment systems such as PayPal and TransferWise for small amounts. Currency exchange brokers are increasingly offering cheaper options for money transfers and currency exchange, though you should always compare final fees.
You can find out more about how to transfer money internationally here.
Offshore banking in Luxembourg
Internationals often use Luxembourg as an offshore bank — in fact, many of the country’s banking clients are non-residents. Beside those that simply work in the country and live across the border (cross-border workers), Simône says that “other customers have chosen to bank in Luxembourg due to its greater privacy; favourable taxation for companies (it boasts one of the lowest total tax rates in Western Europe); access to deposits and protection against local, political, or financial instability.”
|Born in Holland, Simône left her home country 30 years ago. Before arriving in Luxembourg, she crossed the US, London and Paris. She has been working for ING Luxembourg for 10 years, and is now Business Developer. She set up the ING Expat Service.|