Doing Business in Indonesia VS Luxembourg – A Comparison
Entrepreneurs and investors often face the dilemma of choosing the ideal location for their business ventures. Indonesia and Luxembourg are two countries that offer unique advantages, making the decision challenging. Indonesia is celebrated for its competitive business landscape, high quality of life, and lower costs for setting up smaller businesses. On the other hand, Luxembourg is renowned for its robust financial sector, strategic location in Europe, and business-friendly policies. This article explores the key differences between these two countries to help you make an informed decision.
Key Comparison Points
Business Environment
- Indonesia: Offers a stable political environment and growing government initiatives to support entrepreneurship, particularly in small and medium-sized enterprises (SMEs).
- Luxembourg: Known for its strong legal framework and political stability, with significant government backing for financial and tech industries.
Taxation
- Indonesia: Corporate tax rate is 22%, with tax incentives available for certain industries and SMEs.
- Luxembourg: Corporate tax rate ranges from 15% to 17%, with generous tax exemptions and incentives for international businesses.
Ease of Company Incorporation
- Indonesia: Incorporation is straightforward, with digital infrastructure improving and government reforms aimed at simplifying regulatory processes.
- Luxembourg: Incorporation is efficient, supported by a well-established legal framework and advanced digital services for businesses.
Cost of Living and Business Operations
- Indonesia: Offers lower operational costs, affordable office spaces, and a relatively low cost of living compared to many Asian countries.
- Luxembourg: Higher operational costs, expensive office spaces, and a high cost of living, reflecting its status as a European financial hub.
Access to Markets
- Indonesia: Strategic location in Southeast Asia with access to regional markets and growing trade agreements within ASEAN.
- Luxembourg: Positioned at the heart of Europe with excellent global connectivity and access to EU markets through trade agreements.
Quick Comparison Overview
Here’s a quick overview of the key differences for easy reference.
Factor |
Indonesia |
Luxembourg |
Business Environment |
Stable political environment with SME support |
Strong legal framework and government backing |
Corporate Tax Rate |
22% |
15% – 17% |
Capital Gains Tax |
Tax incentives available |
Generous exemptions for international businesses |
Ease of Incorporation |
Growing digital infrastructure and simplified regulations |
Efficient processes with advanced digital services |
Business Costs |
Lower operational and living costs |
Higher operational and living costs |
Market Access |
Strategic location in Southeast Asia |
Central location in Europe with EU market access |

Benefits of Choosing 3E Accounting
Whether you’re looking to register a company in Indonesia or start a business in Indonesia, 3E Accounting offers unparalleled expertise and support. From seamless incorporation to comprehensive business solutions, our team ensures a hassle-free experience for entrepreneurs and investors.
Explore our Indonesia company incorporation services package to understand how we can assist you. For more guidance, check out our guide on registering a company in Indonesia. Ready to take the next step? 3E Accounting is here to help. Contact us today to get started.
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Frequently Asked Questions
Yes. Indonesia offers lower startup and operational costs compared to Luxembourg, especially for small and medium-sized businesses. See the guide to setup Indonesia business for details.
Indonesia has improved digital systems and simplified procedures, though Luxembourg offers faster EU-aligned processes. For more on the Indonesian process, refer to the company registration in Indonesia guide.
Indonesia’s corporate tax rate is 22%, while Luxembourg’s is lower (15%–17%) with exemptions for international companies. Still, Indonesia offers incentives based on sector and region. See the benefits of company incorporation.
You can contact 3E Accounting to get professional assistance and expert advice tailored to your business needs in Indonesia.
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.