Home Finance Banking Three common challenges of expat banking in Luxembourg
Last update on September 30, 2019

With a large expat customer base, Luxembourg’s banks have many resources to help new arrivals deal with a range of financial challenges they might face.

Whether it’s opening up a simple current account or filing taxes, expats may feel like they’re facing some banking challenges. But banking in a foreign country shouldn’t be a problematic experience if you go about it the right way and use the available resources out there.

Al fresco dining in Luxembourg City

Luxembourg has one of the highest per capita expat populations in the world, with 46.7 percent of its population foreign-born and over 170 nationalities living in the country. Expatica, offers some banking advice for expats and tips on how to deal with common banking and financial issues.

Opening a bank account before arriving in the country

If you are relocating to Luxembourg, you may need to open a bank account before arriving in the country. Quite frequently, expats in Luxembourg find that they need a bank account before they relocate here in order to sort out accommodation. If you are renting, you’ll usually need to pay around 2-3 months’ deposit upfront. This means you’ll need a Luxembourg bank account to arrange the bank guarantee.

The trouble is, you usually need to provide a permanent address to open up a bank account. It’s the old Catch 22 situation. You might get around this if the landlord or agency you are renting from can provide a housing contract upfront, but this is rarely the case. A better way is to make sure you look at Luxembourg banking options well in advance of your move to assess the possibility of what Expat banking packages can offer.

Mobile Banking

It makes sense to research options before coming. With a high number of expats coming to live and work in Luxembourg each year, banks will usually have expat-friendly offers that account for common problems faced, or will at least be able to give advice. For instance, at some banks, there are expat current accounts that can be opened ahead of arrival so that issues like accommodation can get fixed in advance. There are also advice services especially designed for expats to help new arrivals with any queries on banking but also non-banking issues such as housing, language courses, welcome courses, insurances, relocation offices etc.

International money transfers and cross-border payments

A common important expat banking item is moving money from country to country, whether that be transferring funds into the country when you move or making payments once you’ve relocated. Problems can include fees on foreign currency payments, how long it takes money to reach its destination, and issues with using credit cards abroad.

Luxembourg people standing on a bridge

It’s advisable to talk to your bank if you’re going to be dealing with regular cross-border payments so that you can get the most attractive possible set up. Banks offer a lot more than they used to and it’s much easier, especially within Europe. In fact, you don’t need to have several banks anymore, everything can be done from your one account in Luxembourg.

It’s now possible for expats to make transfers and set up direct debits. The process is made even smoother thanks to mobile banking. Several banks offer a wide range of services through smartphone banking apps.

For international money transfers, there are alternative solutions to banks which could prove cheaper and more convenient, such as:

You can also use Monito’s online comparison tool to save on fees, obtain the best exchange rates and find the cheapest option for your international money transfers.

See our Guide to international money transfers for more information.

Dealing with taxation

Luxembourg is a country where all residents are required to file their own annual tax return. Expats in Luxembourg can find this a daunting prospect, especially if they come from a country where they might not have had to do this. Although Luxembourg banks aren’t responsible for dealing with tax affairs, many have tax experts who will be able to offer advice.

Dealing with tax issues is a hurdle that expats have to deal with a little later down the line after moving in. But they should bear in mind that their bank is well placed to give advice and can help reduce their tax burden through explaining options on savings, pensions, insurances, etc.