(Last updated: 11 May 2011)

Business etiquette

Business tips

The dress code for business is formal. A suit and tie is appropriate for men; conservative clothing for women. Some dining rooms and clubs demand formal dress.

Reconfirm appointments in advance. Avoid business visits during the Christmas/New Year period, Easter, and July and August.

Shake hands on arrival and departure.

Exchange business cards if you are meeting for the first time.

Find out in advance in which language the meeting will be conducted. If necessary have an interpreter on hand.

If you are invited to your host’s home, take a small gift such as flowers or sweets. Dress smartly.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

As a member of the European Union (EU), Luxembourg applies the EU’s common customs tariff and all regulations affecting customs legislation, as well as the Common Agricultural Policy.

For goods imported into Luxembourg from other EU countries, no customs duties apply unless the goods contain components imported from outside the EU on which customs duties have not been paid in another EU country. Import duties are based on Cost Insurance Freight price paid for the goods. Value Added Tax is 15 per cent, currently the lowest in the EU.

Import licences are required for a limited number of items, mainly agricultural products. Special rules apply for imports of particular products and countries. The Ministry of Economic Affairs has further information, or contact your distributor.

Labelling

Labels should be in either French or German. Foodstuffs are subject to special labelling regulations. These labels must show the name of the manufacturer, composition, content (in metric) and country of origin. Check with your importer.

Certain products can only be sold if they conform to the appropriate EU directives and show a CE Mark. European manufacturers are increasingly requesting that suppliers be ISO 9000 registered.

For further information, contact the Department of Customs and Excise (Administration des Douanes et Accises) (in French only). Information on EU regulations is also available.

Documentary requirements

Commercial invoice

The commercial invoice must be produced in triplicate. It must contain the following information:

• the date and place of shipment
• name/firm
• address of seller and buyer
• mode of transport
• number
• markings of the packages and their numerical order
• an exact description of goods (according to kind, quality, grade, and weight, both gross and net, in metric)

A commercial invoice containing the HTS code (Harmonised Tariff Schedule/Schedule B) is useful as it helps customs authorities classify it for customs purposes.

A pro-forma invoice, acceptable in lieu of a commercial invoice, should include a full description of and list the value of the goods.

Bill of lading/Airway bill

Mail and parcel post shipments require postal documentation in place of bills of lading, and air cargo shipments require airway bills. The number of copies issued depends on the requirements of the importer and the airline. As a guide, follow IATA and/or International Civil Aviation Organisation regulations governing labelling and packing of dangerous and restricted goods.

To order bills are acceptable. Bills of lading should bear the name of the party to be notified. The consignee must have the original bill of lading to take possession of the goods. Express bills of lading are also acceptable.

Certificate of origin

Under EU regulations, certificates of origin may be required for stipulated goods, including goods subject to surveillance and/or quota requirements. Check with your importer.

Livestock, food, animal products, plants and plant products are subject to detailed regulations and controls. Imports must be accompanied by sanitary health certificates issued by the approved authority in the country of origin. This is usually done by The Australian Quarantine and Inspection Service (AQIS) and the Department of Agriculture, Fisheries and Forestry Australia (AFFA). The establishment number must be quoted on the certificate. Meat & Livestock Australia or the State Department of Agriculture will also provide advice to meat exporters.

Plants for propagation and some plant products require phytosanitary certificates issued by the approved authority in the country of origin. A certificate of origin is also required. Fruit and plants require phytosanitary certificates issued by the approved authority in the country of origin. Details can be obtained from AQIS PHYTO.

Taxation

Foreign investors in Luxembourg may qualify for personal income tax or corporation tax relief. Assistance is only applicable on tangible assets not including buildings, agricultural livestock, and mineral or fossil reserves made during the accounting year. The rate of tax relief on additional investments is 12 per cent.

In recent years, the government has abolished corporate capital gains tax, decreased personal income and reduced corporate tax to 30 per cent.

New companies producing new products may apply for tax relief, while investments made by existing companies may qualify for tax credits.

As a substantial percentage of national revenue is generated by small- and medium-sized companies the government is eager to attract such businesses and has introduced measures including enhanced tax breaks for new start-ups. The government plans to reduce company tax and remove administrative barriers to get rid of further red tape for small businesses.

Setting up in Luxembourg

Setting up an overseas office can be expensive and usually, but not always, follows an initial market entry, working through agents or distributors. The benefits to Australian business people of setting up offices overseas can be significant.

You need to think about:

• The office location – convenience to customers, security and social attitude towards the integrity of the neighbourhood.
• Costs per metre to rent or lease.
• Utilities – the availability of water, power, electricity, telephone, fax and Internet connections.
• General building access – user-friendliness of reception area and disabled access.
• Parking for visitors and tenants.
• Amenities – meeting room, tearoom, toilets.
• The lease agreement exit clause – consult a lawyer who specialises in property agreements.
• Value of using property consultants (recommended).

Austrade offices overseas can assist companies wanting to set up representative offices by:

• Providing advice based on their previous experience in helping Australian companies.
• Recommending experienced legal and taxation experts.
• Finding suitable property consultants.
• Connecting you to other companies who have already gone down this path and who will know of pitfalls and short-cuts.
• Introducing you to major accounting firms which will know the practical steps in setting up offices.

For further information on setting up business in Luxembourg, refer to the Doing Business website.