Work for a Luxembourgish Company Remotely: Your 8 Big Queries

As remote work continues to redefine international employment, more professionals are asking how they can work for a Luxembourgish company remotely while living abroad. At the same time, Luxembourg employers are increasingly exploring how to retain or hire global talent without setting up local entities in every country.

Whether you’re an employee hoping to move to France or Spain while keeping your Luxembourg job, or an employer hiring talent in Portugal or the US, this guide answers the eight biggest questions surrounding Luxembourgish remote work, taxation, and compliance.

Can I Work for a Luxembourgish Company Remotely from Overseas?

Yes — you can, but both the employee and employer need to understand the implications.

Luxembourg’s central European location makes it a hub for cross-border work and investment. Many employees already live in France, Belgium, or Germany and commute daily. But working remotely across borders adds new layers of complexity related to tax, social security, and labor law.

From the employee’s perspective:

• Tax residence – If you spend more than 183 days per year in another country (for example, in Spain or Portugal), you’re likely to become tax-resident there, and your income from the Luxembourgish company will be taxable locally.
• Double taxation – Luxembourg has treaties with most major countries, including the US, France, and Germany, to prevent being taxed twice on the same income — but you may need to file in both jurisdictions.
• Social security – Within the EU, you generally contribute to the system of the country where you physically work. If you live full-time in France or Spain, you’ll likely switch to that system unless you qualify for Luxembourg coverage under EU coordination rules.
• Employment law – Even if your contract is governed by Luxembourg law, the country where you work (say, Portugal or Belgium) might impose mandatory local protections.

From the employer’s perspective, hiring or retaining a remote employee abroad may trigger:

• Local payroll and tax obligations
• Social contribution registrations
• Permanent establishment (PE) risk, where the remote presence could be seen as a taxable business presence in the host country
• Compliance requirements under local labor law

That’s why many Luxembourgish companies turn to Employer of Record (EOR) solutions when a valued employee wants to relocate abroad.

Legal and Tax Implications of Working Abroad

Working for a Luxembourgish employer while living elsewhere, whether that’s in France, Spain, Portugal, Germany, or even the US, changes your tax and legal profile.

Tax Residence and Double Taxation

Your tax residency determines where you pay income tax.

• If you live in France or Belgium but work remotely for a Luxembourg company, you’ll pay taxes primarily where you live, though Luxembourg may still withhold tax at source for limited workdays in Luxembourg.
• Luxembourg has specific tolerance thresholds: for instance, 34 days for France and Belgium, 19 days for Germany. If you work outside Luxembourg beyond those limits, your income for those days becomes taxable in your country of residence.
• Outside the EU, such as in the US or UK, different double taxation agreements apply, requiring detailed coordination between tax authorities.

Permanent Establishment (PE) Risk

If a Luxembourgish employee works remotely from Spain and performs key business functions (like client acquisition or contract negotiation), Spain might view the setup as a permanent establishment. This could expose the Luxembourg company to local corporate taxation and compliance duties.

Payroll and Withholding

Luxembourg employers must often register for payroll in the employee’s country of residence if they’re no longer working within Luxembourg. For example, if an employee moves from Luxembourg to Portugal permanently, the company may need to comply with Portuguese payroll reporting.

Social Security Coverage

EU Regulation 883/2004 determines which system applies. In general:

• If you work more than 50% of your time outside Luxembourg, you’ll contribute to the host country’s system (e.g., France or Spain).
• A posted worker exception may apply temporarily, but usually not for long-term remote work.

Outside the EU, local bilateral social security treaties — like those with the US or Canada — must be reviewed.

How Luxembourg Employment Law Affects Remote Workers

Even when working abroad, your employment contract may still be governed by Luxembourg law, unless changed by mutual agreement.

Luxembourgish labor law is employee-friendly, offering strong protections for leave, notice periods, and social benefits through the CCSS. But mandatory employment standards from the country where you work (for example, Spanish or French labor codes) can still override certain provisions.

For instance:

• In France or Portugal, employees are entitled to national holidays and minimum paid leave that may differ from Luxembourg’s.
• If you live in Germany, working time restrictions (e.g., maximum weekly hours) are stricter than in Luxembourg.

Your employer must ensure compliance with both Luxembourg law and any mandatory host-country laws. Contracts should clearly specify:

• Applicable law (Luxembourg vs. local)
• Dispute jurisdiction
• Local benefit coordination
• Telework or location clauses

Proper documentation protects both parties if the employee remains abroad long-term.

Employer Responsibilities for Cross-Border Employees

For Luxembourgish employers allowing remote work abroad, responsibilities expand significantly.

They must consider:

• Payroll registration in the employee’s country of residence (for example, Belgium or Portugal).
• Tax withholding and remittance in that jurisdiction.
• Social contribution filings, including registration with local authorities.
• Tracking workdays abroad, since taxation and social security depend on location.
• PE exposure, necessary to avoid creating a taxable branch in another country.
• Insurance and compliance with local occupational laws (e.g., health & safety).

If the company has several employees abroad, say, one in France, one in Spain, and one in Germany, each requires a separate compliance setup. This quickly becomes complex, which is why many companies choose to partner with an EOR in Luxembourg or in each employee’s host country.

How Do Employer of Record (EOR) Services Work?

An Employer of Record (EOR) in Luxembourg or another country provides a legal and compliant way for companies to employ workers abroad without establishing a local entity. The EOR becomes the worker’s legal employer, while the original company directs day-to-day work.

EOR vs. Traditional Employment: Key Differences

So, a Luxembourgish company hiring in Spain or Portugal can legally employ the person via an EOR partner registered in that country, maintaining full operational control without direct compliance risk.

Payroll, Taxes, and Benefits Under an EOR

The EOR manages:

• Payroll calculation and payment in local currency
• Tax withholding and social contributions
• Health, pension, and insurance benefits per local law
• Employment contracts compliant with host-country regulations

The employee remains part of your team, but legally employed by the EOR.

When to Use an EOR Instead of Setting Up an Entity

An EOR Luxembourg solution is ideal when:

• You have one or two employees abroad (e.g., a developer in Germany or a sales rep in France)
• You’re testing market expansion without permanent establishment
• You want to employ a relocated staff member compliantly abroad
• You lack the resources or time to create a foreign subsidiary

INS Global’s EOR Luxembourg services can manage all of this across 160+ countries, letting you focus on operations while ensuring full compliance.

Can I Work Remotely for a Luxembourgish Company Through an EOR?

Absolutely. Many employees relocating abroad continue their role seamlessly through an EOR arrangement. For employees, this provides:

• A local employment contract and payroll in your country of residence
• Proper social security coverage and benefits locally
• Continued work for your Luxembourg company without violating tax or labor laws

For employers, it means:

• No need for registration or tax filings in the employee’s country
• Reduced legal and compliance risk
• Consistent collaboration through a single EOR partner

This setup allows Luxembourgish companies to maintain flexibility while ensuring employees abroad are legally protected.

How Much Does an EOR Cost?

EOR pricing varies by provider, country, and complexity. On average, EOR Luxembourg solutions cost a flat monthly fee or a percentage of gross salary.

Typical Pricing Models for EOR Providers

• Flat monthly fee per employee
• Percentage of gross compensation
• One-time onboarding fee
• Optional add-ons for benefits administration, visa support, or severance handling

Cost Comparison: EOR vs. Setting Up a Subsidiary

In most cases, if you plan to hire under 10 remote employees abroad, an EOR is far more cost-effective than creating subsidiaries in France, Germany, or the US.

Hidden Costs to Watch Out For

When choosing an EOR, watch for:

• Currency conversion markups
• Extra fees for terminations or special benefits
• Differences in statutory benefits (e.g., 13th month in Portugal)
• Administrative delays when changing jurisdictions

Transparent EOR providers like INS Global outline all fees and responsibilities upfront, helping both employer and employee avoid surprises.

Are There Limitations When Working Overseas for a Luxembourgish Company?

Yes. Even under an EOR setup, limitations remain, especially around taxation and time-zone management.

Social Security and Double Taxation

Luxembourg has social security coordination with EU states, but once remote work exceeds 50% of total working time abroad, contributions generally shift to the worker’s residence country.

For example:

• If a Luxembourg employee moves to France and works remotely there four days a week, they will contribute to French social security.
• However, bilateral tax treaties prevent double taxation, allowing credits or exemptions.

Outside Europe, such as when working from the US, taxation becomes more complex and may require personal tax advisory.

Time-Zone, Communication, and Productivity Challenges

Legal compliance isn’t the only issue. Working remotely across borders introduces:

• Time-zone differences — e.g., managing projects between Luxembourg and New York requires limited overlap hours.
• Cultural expectations — communication and collaboration styles differ.
• IT infrastructure and security — ensuring data stays compliant with GDPR and local privacy laws.

Luxembourgish companies managing international teams should invest in flexible scheduling tools and cross-border communication policies.

What Are the Risks and Benefits of Choosing to Work for a Luxembourgish Company Remotely?

For Employees

Benefits:

• Continue working for a Luxembourg employer while living anywhere in the EU or beyond.
• Access to competitive pay and professional opportunities in Luxembourg’s global economy.
• Better work-life balance in a preferred country like Spain or Portugal.

Risks:

• Double taxation or unexpected tax bills.
• Loss of access to Luxembourgish social security if you relocate full-time.
• Uncertainty over which employment law applies if not managed properly.

For Employers

Benefits:

• Retain skilled staff who relocate abroad.
• Access global talent without setting up multiple entities.
• Boost diversity and operational flexibility.

Risks:

• Complex payroll obligations in each country.
• Permanent establishment exposure if not using an EOR.
• Potential non-compliance with foreign employment law.

What Are the Risks and Benefits of Choosing to Hire Remote Workers in Luxembourg?

From the opposite perspective, foreign companies (for example, from the US, UK, or Germany) can hire remote workers based in Luxembourg.

Advantages:

• Luxembourg’s multilingual, highly skilled workforce.
• Strategic EU location and strong infrastructure.
• Stable tax and legal environment.

Challenges:

• Registering as a foreign employer in Luxembourg can be time-consuming.
• Mandatory contributions to Luxembourg’s robust social security and pension system.
• Compliance with strict data protection (GDPR) and employment regulations.

Again, partnering with an EOR Luxembourg solution like INS Global enables simple, compliant hiring of Luxembourg-based employees by foreign companies.

Conclusion – How INS Global’s Employer of Record Can Help Companies Work Worldwide

Whether you’re an employee planning to move abroad or a Luxembourgish company hiring international talent, compliance is key. Tax, payroll, and labor law requirements vary widely between Luxembourg, France, Spain, Portugal, and the United States.

With INS Global’s Employer of Record (EOR) Luxembourg services, companies can:

• Hire or retain remote staff in over 160 countries
• Ensure local compliance with payroll, tax, and social security
• Avoid the cost of setting up subsidiaries abroad
• Onboard and pay international staff quickly and transparently
• And more

Remote work can be complex, but with the right partner, it doesn’t have to be risky. INS Global enables Luxembourg companies and employees to work flexibly and globally, while staying compliant every step of the way.

FAQ

Can I Work for a Luxembourgish Company from Spain?

Yes. You’ll likely pay taxes and social contributions in Spain if you live there full-time. Using an EOR in Spain can simplify compliance for both you and your Luxembourg employer.

Can I Live in Portugal and Work for a Luxembourgish Company?

Yes, but you must ensure that Portuguese residency and social security contributions are properly declared. Portugal’s double taxation treaty with Luxembourg prevents double payments, but an EOR can ensure proper compliance.

Can I Work Remotely in the EU for a Luxembourg Employer?

Yes. EU coordination makes this easier, but you must respect the 50% social security rule and any bilateral thresholds (like 34 days for France or Belgium).

Can I Be Paid in My Country While Working for a Luxembourg Company?

Yes, via an EOR or local payroll setup. The key is ensuring taxes and benefits are handled correctly under the local regime.

What If I Want to Switch from Contractor to Employee?

Many remote professionals start as contractors, providing specialist skills as needed, but many contractors may see the benefits of later switching to full-time employment for stability. An EOR makes hiring contractors simple and seamless by issuing a compliant local contract while maintaining your existing working relationship.