Recent developments in Luxembourg law have considerably strengthened the country's position as a highly attractive EU location for both R&D activities and IP holding and management activities, particularly for pharmaceutical and life sciences companies.
The main changes refer to:
Specific Intellectual Property (IP) Tax Regime where income and capital gains from qualifying IP rights can benefit from an effective tax rate of 5.7%;
Special depreciation scheme;
Tax credit for specific investments
Specific incentives for innovative activities and Research & Development (R&D) Luxembourg entities involved in innovative and R&D activities can benefit, in addition to the specific IP tax regime and general tax incentives, from financial support (e.g. cash grants or interest subsidies).
Life sciences cluster
The Luxembourg government announced its willingness to invest approximately EUR 140 million in key strategic partnerships with research institutions in order to develop a centre of expertise in the area of molecular and personalised medicine. The creation of a Luxembourg biobank within a partnership is the centerpiece of this overall project.
Further literature: the PwC report, Diagnostics 2009: Moving towards personalised medicine, includes a case study on the Integrated Biobank of Luxembourg project and provides insights on the development of personalised medicine.