This exceptional social situation can be explained by a great labour and political stability. The poor number of strikes and a low unemployment rate helps the nation have a very stable situation compared to other countries in Europe. The maximum VAT rate is 17%, the lowest in the European Union. Salaries are subject to a yearly indexation, which allows workers to build themselves a wealthy and durably stable situation. Moreover, its citizens benefit from a valuable social security system. Parental leave is automatically granted to both parents, and is usually taken for a full time period of 6 months, as it is recommended by the social security to parents willing to take care of their children under the age of five. (Some changes are foreseen in 2017, the details are not yet confirmed).
In terms of financial economic activities, Luxembourg is known as a centre of excellence for private banking and investment funds. It is the second place in the world for domiciled funds behind the United States, with $ 3 trillion of assets under management in 2014 and more than 11,900 investment funds and sub-funds. More than 26000 employees work in the 143 banks in Luxembourg. The Luxembourgish market place is also being recognised for its new innovative international solutions including: securitisation, SICARs (Société d'Investissement à Capital Risque), Real Estate vehicles, pension funds, and SIFs (Specialised Investment Fund).
Thanks to its exceptional economic situation, Luxembourg also welcomes big industrial firms (e.g.: Arcelor Mittal, Goodyear, Guardian, DuPont) as well as many multinational groups which manage most of their activities from their Luxembourgish headquarters (e.g.: Microsoft and Amazon). Its strategic geographical situation at the heart of Europe also attracts many transports and logistics firms (e.g.: Cargolux, Panalpina and DHL), which makes of Luxembourg a great European hub.
Luxembourg also values the development of new sectors (i.e. research centres, e-commerce, biotech, green business) enabling a diversification of its economy.
A number of major EU institutions are located in the Kirchberg quarter, including the European Court of Justice, the Secrétariat-Général of the European Parliament and the European Investment Bank.