Political overview
Luxembourg is a parliamentary democracy in the form of a constitutional monarchy. The Grand Duke or Duchess of Luxembourg is head of state, while executive functions are exercised in practice by the Government, led by the Prime Minister.
Legislative power is exercised by the unicameral Chamber of Deputies, which has 60 members elected by universal suffrage for five-year terms using proportional representation. The Government must have the confidence of the parliamentary majority.
The judiciary is independent. Luxembourg's National Day is celebrated on 23 June.
Bilateral relations
Australia and Luxembourg have a warm relationship and cooperate in multilateral organisations, including on climate change, human rights and disarmament.
Australia and Luxembourg work closely to promote global peace and security and respect for human rights through international organisations, including the United Nations. We share a strong commitment to the abolition of the death penalty.
In 2025, Australia and Luxembourg celebrated 55 years of diplomatic relations built on shared values and a common commitment to democracy, the rule of law, global cooperation and innovation.
Foreign policy
Luxembourg is a strong supporter of multilateral organisations. It is one of six founding members of the EU, a signatory to the Brussels Treaty (providing for collective self-defence between its members), a NATO member and a founding member of the Council of Europe.
Luxembourg hosts several European institutions, including the Secretariat-General of the European Parliament, the European Court of Justice and the European Investment Bank. Luxembourg served alongside Australia as a non‑permanent member of the UN Security Council in 2013-14.
Agreements with Luxembourg
Australia has several bilateral agreements with Luxembourg. Texts of bilateral agreements are available at the Australian Treaties Database.
Economic diplomacy
Luxembourg has a stable and open economy with one of the highest GDP per capita levels in the world.
Trade with Germany, France and Belgium — Luxembourg's nearest neighbours — account for over half its two-way trade. Since 1921, Luxembourg has been in an economic union with Belgium — the Belgium-Luxembourg Economic Union (BLEU).
Australia continues to seek opportunities to promote Australian business and raise awareness of potential benefits of increased trade and investment between Australia and Europe, including Luxembourg.
Business
Australia has a solid trade and investment relationship with Luxembourg. In 2025, Luxembourg ranked as Australia's sixth largest investor (stocks). Most of this investment stock originates from global funds domiciled in Luxembourg.
Luxembourg is an attractive market for Australian foreign direct investment based on its strong economic performance, dynamic services sector and business-friendly regulations.
The Australian Trade Commission (Austrade) Paris Office aims to attract foreign direct investment from Luxembourg into Australia and promotes the Australian education sector. Austrade also focuses on identifying opportunities for Australian companies in high potential areas, such as the space sector.
Further economic and trade information [PDF].
Public diplomacy
The Australian Embassy to Belgium and Luxembourg and Mission to the European Union and NATO, based in Brussels, promotes a close and meaningful relationship with Luxembourg through government-to-government engagement, public diplomacy events, and media and social media engagement. Together with the Australia-New Zealand Chamber of Commerce in Luxembourg (ANZCCL), the Embassy works to advance the bilateral economic relationship. Other focus areas include gender equality, sustainability, cultural exchange, and innovation and emerging technology, including in the space sector .