Patrick Nickels is no stranger to the requirements of international companies looking for a European base. His long career at the Ministry of the Economy includes a period as executive director at the Luxembourg Trade and Investment Office in San Francisco, and he was until recently, the ministry’s Director General for Industrial Development. He is also chair of Luxembourg’s national credit and investment institute SNCI.
Why do international companies invest in Luxembourg?
Patrick Nickels: Many factors play a role: Luxembourg’s strategic position in the working heart of Europe, its political stability, its international population and the excellent quality of its infrastructure, to mention but a few examples. It is also an attractive and safe place to live with a wide selection of international schools. Many companies that have come here say that Luxembourg is an ideal launch pad from which to address the European markets.
Companies come here after careful investigations concluding that this is the optimal destination for them.
It is important to understand that companies come here purely out of choice. Automotive suppliers targeting the premium car brands produced in Germany are basically obliged to go there, regardless of what they think of German labour laws and taxes, for example. Luxembourg does not really have this type of compelling reasons. Companies come here after careful investigations concluding that this is the optimal destination for them.
What does this mean for Luxembourg?
In order to be successful, we always have to remain competitive compared to our neighbours. We need talents, technology and foreign capital, and they will converge here if they think Luxembourg is the best place for them. You can always be sure that new policies and the fiscal system will be designed with this in mind. However, in the end all stakeholders have to cooperate to preserve Luxembourg’s position as a cost competitive, business-friendly location.
Are there any international companies of whose development in Luxembourg you are particularly proud?
I’m very pleased that a major industrial company like DuPont is investing over €300 million in setting up a new Tyvek production line, which is really at the forefront of technology, here. Another example is Guardian’s decision to invest in Luxembourg in a new furnace and float glass production line. Space data and analytics company Spire is an inspiring example of how the recent, ambitious positioning of Luxembourg in the commercial space and space resources fields has translated into the decision of a vibrant and very successful business to come here.
What strengths can Luxembourg build on to attract further companies from abroad?
One key factor of Luxembourg’s success is that we have always been skilled at finding new niches where we could grow expertise. The space sector is a good example. The same goes for the laying of the foundation of our data economy by building up a cutting edge IT infrastructure including top-range connectivity and a business-oriented high performance computer.
Today, our priority is to develop a sustainable data-focused economy that is looking to leverage technological innovation.
Today, our priority is to develop a sustainable data-focused economy that is looking to leverage technological innovation. We aim for qualitative growth that will allow us to develop our economy in a sustainable manner while remaining competitive at the same time.
What are your main priorities today for moving forward?
Hopefully, we will soon leave the COVID-19 pandemic behind us so that we can fully redeploy our foreign trade and investment promotion activities again. Luxembourg has a role to play in the global efforts to build back better and greener, and we are convinced that these efforts will create new business opportunities. I look forward to discussing this with international companies at economic missions, trade fairs and other events again. While digital tools are extremely useful, nothing can replace face-to-face meetings in order to create personal relationships and develop trust.
Nothing can replace face-to-face meetings in order to create personal relationships and develop trust.
Our Minister of the Economy, Franz Fayot, is also Minister for Development Cooperation and Humanitarian Affairs. This double role opens our outlook towards new markets, in particular in Africa and South East Asia. In the future, I hope that we will be able to build bridges between international prospection, trade promotion and economic cooperation in a way that will be equally beneficial for Luxembourg and our collaboration partners.
Photo credit: Ministry of the Economy/Marion Dessard