LINARI LAW

Luxembourg at the heart of EU Defense SME funding

The European Union has unveiled a €30 million initiative designed to help small and medium-sized enterprises (SMEs) in the defense and security sectors access financing. This program reflects a broader EU strategy: fostering innovation in strategic industries while maintaining strict compliance and governance standards. For Luxembourg, it represents a unique moment for law firms, financial institutions, and advisory services to position themselves as essential partners for SMEs navigating this complex funding landscape.

Accessing EU-backed funding is not straightforward. SMEs must meet rigorous eligibility requirements under EU state aid rules and carefully navigate restrictions related to dual-use technologies—items that have both civilian and military applications. Export controls and licensing regulations add another layer of complexity, while robust governance, transparency, and AML/CFT procedures remain critical. For companies unfamiliar with these obligations, Luxembourg-based advisors can provide indispensable guidance, helping structure projects in ways that satisfy regulatory authorities and optimize funding opportunities.

Luxembourg itself offers clear advantages as a hub for these initiatives. The country has long been recognized for its expertise in high-tech sectors, including cybersecurity, space technology, and defense, aligning well with the EU’s strategic priorities. At the same time, Luxembourg’s financial infrastructure—from RAIFs and securitization platforms to private equity and debt funds—allows for the efficient deployment of EU-backed financing. Legal and advisory firms can accompany SMEs at every stage, from eligibility assessments and funding applications to compliance verification and contract negotiation, positioning Luxembourg as a central gateway for EU defense funding.

Advisors looking to make the most of this opportunity should focus on building thought leadership, offering tailored compliance toolkits, and engaging with incubators and accelerators in defense-related sectors. Demonstrating expertise in cross-border investment and financial structuring can help attract both SMEs and international investors, reinforcing Luxembourg’s standing as a strategic hub for EU-supported defense projects.

With calls for applications expected imminently, Luxembourg advisors have the chance to bridge the gap between EU funding programs and SMEs’ operational needs. By combining sector knowledge, regulatory expertise, and sophisticated financial structures, Luxembourg can further cement its reputation as a center for innovation, compliance, and strategic investment in Europe’s defense and security landscape. Beyond financing, this initiative highlights Luxembourg’s potential as a trusted advisory and structuring hub for high-tech SMEs seeking to navigate the increasingly complex world of EU defense funding.

PREVIOUS NEXT

Related posts

Browse All

Luxembourg’s Financial Services Industry: A Strong Defense Against EU Regulatory Expansion

Luxembourg, along with smaller EU states like Ireland, Belgium, and Malta, has successfully defended its financial services sector—particularly the investment fund industry—against increased EU oversight and proposed reforms under the Capital Markets Union. The country opposes measures like a single market passport for depositary services, arguing that centralized regulation could…

UCIS KEY MILESTONE OF 6.1 TRILLION EUR

Luxembourg’s investment fund industry surpassed €6.1 trillion in UCI assets by the end of October 2025, marking strong monthly and annual growth. The increase was driven mainly by market performance, supported by steady net subscriptions and a stable number of UCIs. Equity funds performed well amid improving global sentiment, while…

Luxembourg faces 335,000 hires by 2040: why talent must become a national priority

Luxembourg is preparing for an unprecedented labour demand, with an estimated 335,000 hires needed by 2040—nearly 70% of today’s workforce. While its internationally diverse labour market is a strength, heavy reliance on foreign talent also creates vulnerability amid rising global competition. The Luxembourg Chamber of Commerce has issued 34 recommendations…

LuxDefence Asbl Launches: A Strategic Step for Europe’s Security in the National Defence Industry

The official launch of LuxDefence on November 24, 2025, marks a key milestone in strengthening Luxembourg’s defence-industrial position within Europe and NATO. The association, backed by EUR 1.2 billion in public investment, unites over 80 companies to support innovation, security, and European sovereignty. LuxDefence aims to represent Luxembourg’s defence sector,…

SFDR 2.0: Key Changes Ahead for Luxembourg Funds and Asset Managers

SFDR 2.0 introduces major updates for Luxembourg-based funds and asset managers, including a new product categorization system with clearer definitions. The revised rules simplify entity-level disclosures by removing some reporting obligations. Stricter sustainability standards will require 70% of assets to meet stated objectives and introduce sector exclusions. The changes also…

When a bonus becomes a legal right : a new reminder from the Luxembourg Court of Appeal

The Luxembourg Court of Appeal reaffirmed that a bonus paid consistently over several years can become a legally acquired right. Once established, employers cannot unilaterally reduce or remove it without the employee’s explicit consent. Collective agreements don’t override more favourable individual entitlements. This ruling is a wake-up call for employers…
Browse All

A LEGACY OF LAW. A FUTURE OF INNOVATION.
25 years of legal excellence – the journey continues.

Contact Info

+352 27 11 60 10

UP