HR, PEO & Employer of Record (EOR) Services in Luxembourg

Introduction

Luxembourg stands as one of Europe’s most dynamic business hubs, renowned for its political stability, pro-business environment, and highly international workforce. Strategically located at the heart of the EU, it offers unparalleled access to major European markets while fostering innovation in finance, technology, and logistics. With favorable tax frameworks and strong government support for entrepreneurs, Luxembourg is an ideal gateway for companies looking to scale across Europe.

EOR & PEO Solutions in Luxembourg

If you’re looking to hire employees in Luxembourg without setting up a legal entity, using an Employer of Record (EOR) like Empleyo is the simplest and most compliant path forward. An EOR in Luxembourg acts as the official legal employer on your behalf, managing everything from payroll and HR administration to employment contracts and statutory employee benefits.

This model allows you to expand into Luxembourg quickly, while remaining fully compliant with local labor laws without the complexity or cost of registering a local entity.

What Is an Employer of Record in Luxembourg?

An Employer of Record Luxembourg (also known as an EOR provider) enables businesses to hire and onboard Luxembourg employees without having to incorporate in-country. The EOR manages:

You continue to oversee your team’s day-to-day tasks, while the EOR service handles legal obligations as the official employer on paper.

What’s the Difference Between EOR and PEO?

A Professional Employer Organization (PEO) typically supports businesses that already have a registered entity in Luxembourg, offering co-employment solutions for HR, payroll, and benefits. An EOR, however, is ideal when you don’t have a legal presence in Vietnam but still want to hire full-time staff.

Whether you choose an EOR or PEO depends on your Luxembourg hiring strategy, budget, and long-term plans for the market.

Benefits of Using an EOR Service in Luxembourg

By using an EOR solution, companies can confidently build their team in Luxembourg, access top talent in Luxembourg, and stay focused on business growth without getting tangled in bureaucracy.

Hiring in Luxembourg

Luxembourg is a thriving market with a growing pool of skilled professionals, making it an ideal destination for businesses looking to expand globally. But to hire in Luxembourg successfully, it’s important to understand your options — especially when you don’t have a legal entity in Luxembourg.

That’s where using an Employer of Record in Luxembourg makes all the difference.

Your Hiring Options in Luxembourg

Businesses have two main paths to hire employees in Luxembourg:

The second option is faster, lower-risk, and ideal for companies that want to test the market, launch quickly, or hire remote employees without permanent infrastructure.

Why Use an EOR to Hire in Luxembourg?

This approach is especially useful for startups, global teams, and growing businesses that need to hire quickly and remain fully compliant.

Employment in Luxembourg

Understanding how employment in Luxembourg works is key to managing your team successfully and staying compliant. Whether you’re hiring directly or using an Employer of Record (EOR), companies must follow labor laws closely — especially when it comes to employment contracts, payroll, and employee benefits.

That’s why many growing businesses choose to use an EOR in Luxembourg to handle these responsibilities with confidence.

Employment Contracts in Luxembourg

All employees in Luxembourg must be hired under a written employment contract, clearly outlining the job role, salary, benefits, working hours, and duration of employment. Contracts must comply with the Labor Code of Luxembourg, and are usually signed before or on the first day of work.

By working with a Luxembourg employer of record, you can ensure that all employment contracts in Luxembourg are properly structured, compliant, and aligned with local requirements without having to hire a full in-house HR team.

Payroll & Employer Contributions

Payroll in Luxembourg involves more than just paying a monthly salary. Employers are required to withhold income tax and make contributions to:

These deductions and employer contributions are calculated based on the employee’s gross monthly salary, and must be submitted on time to remain compliant. An EOR in Luxembourg handles this for you — managing all payroll, tax filings, and reporting on your behalf.

Employee Benefits and Leave

labor law mandates several employee benefits, including:

Using an employer of record service ensures your team in Luxembourg receives all required benefits — and that your business remains fully compliant with employment law.

Termination & Notice Periods

Ending an employment contract in Luxembourg requires careful compliance with local labor laws, as notice periods and termination rules vary by seniority and length of service. Employers must provide written notice ranging from 2 to 6 months depending on tenure and terminations must be justified, particularly for dismissals with cause.

Through an Employer of Record (EOR), businesses can navigate these obligations smoothly, ensuring proper documentation, fair notice, and alignment with Luxembourg’s employee protections while reducing legal and administrative risks.

Visas & Permits in Luxembourg

If you’re planning to hire employees in Luxembourg or bring in foreign talent, understanding Luxembourg’s visa and permit requirements is critical. Navigating these processes can be complex, but working with a trusted Employer of Record (EOR) in Luxembourg makes it much easier.

An experienced EOR provider will ensure all permits are handled legally, so you can focus on building your team in Luxembourg with confidence.

Work Permits for Foreign Employees in Luxembourg

Foreign nationals who plan to work in Luxembourg must obtain the appropriate work and residence permits, with requirements varying by nationality and role. As part of the EU, Luxembourg allows free movement for EU/EEA and Swiss citizens, while non-EU employees need both a work authorization and a residence permit.

An Employer of Record (EOR) streamlines this process by handling applications, compliance, and local registrations enabling businesses to onboard international talent quickly and in full alignment with Luxembourg’s immigration laws.

Types of Visas for Foreign Talent

There are several types of visas used to work or do business in Luxembourg, including:

Each visa type has specific use cases, duration limits, and documentation requirements. If you’re looking to hire in Luxembourg or send international staff temporarily, an EOR Luxembourg solution helps you identify the right visa and manage the application process end-to-end.

Business Permits for Foreign Companies

To operate directly in Luxembourg, foreign companies typically need to register a legal entity in Luxembourg and apply for a business license. This can be a time-consuming process that includes office registration, investment approvals, and compliance with labor laws.

Alternatively, you can use an EOR in Luxembourg to bypass the need for a local entity. The Luxembourg employer of record is already registered and authorized to employ staff and manage payroll, contracts, and local compliance making it easier and faster to hire employees in Luxembourg.

Why Visas & Permits Matter for Global Hiring

If you’re hiring foreign employees in Luxembourg, or placing international staff in-country, it’s essential to stay compliant with immigration laws. The right employer of record service helps you:

Common Questions on EOR in Luxembourg

What types of employment contracts can an EOR issue in Luxembourg?

EORs can issue both permanent (open-ended) and fixed-term contracts, always aligned with Luxembourg’s labor code. Fixed-term contracts are strictly regulated and must be justified by objective reasons, while permanent contracts remain the default employment form.

Is remote work permitted when hiring through an EOR in Luxembourg?

Absolutely. An EOR can structure compliant employment for remote or hybrid workers in Luxembourg, ensuring that labor laws, payroll, and tax obligations are met regardless of whether work is performed on-site or from home.

How does an EOR ensure compliance with local labor laws?

The EOR continuously monitors Luxembourg’s evolving labor, tax, and social security regulations. It applies the correct employment standards in contracts, payroll, benefits, and terminations, safeguarding businesses from compliance risks or penalties.

Who is considered the legal employer when using an EOR in Luxembourg?

The EOR is the employee’s legal employer on record in Luxembourg, handling payroll, benefits, and compliance. However, the client company directs day-to-day responsibilities, manages performance, and integrates the employee into its team operations.

What happens if an employee needs to be terminated?

An EOR ensures that terminations comply with Luxembourg’s strict labor laws, which include notice periods, written justification, and in some cases, protection against dismissal. The EOR advises on process, manages documentation, and reduces the risk of disputes.