Contribute to the financing of Luxembourg's defence, its values and its interests, while investing in a product with a fixed return.
Defence Bond
Bond issuance by the Grand-Duchy of Luxembourg
In the current international context, marked by rising security challenges, Luxembourg is committed to strengthening its investments in defence and security, in line with its European and NATO commitments.
To support this effort, the Grand Duchy is launching a Defence Bond, a government bond available to the general public. This bond allows to:
- Finance national defence and security projects
- Support the Luxembourg economy
- Invest in a product issued by a AAA-rated country.
Luxembourg is the first European country in the 21st century to offer this type of bond to the general public, enabling citizens to contribute directly to national defence while benefiting from a fixed return.
On this website, you will find:
- The features of the “Defence Bond”
- The benefits of investing in this product
- When and where to subscribe
| Issuer | Grand-Duchy of Luxembourg |
|---|---|
| Fixed and competitive interest rate | to be announced on January 15, 2026 at 14.00 CET |
| Maturity | 3 years from the issuance date |
| Coupon | paid annually, every 12 months from the issuance date |
| Currency | EUR |
| Minimum subscription amount | EUR 1,000 (thereafter in multiples of EUR 1,000) |
| Maximum subscription amount | EUR 150,000 per person, per bank |
| Tax exemption on interest income | for Luxembourg resident individuals acting within the scope of the investment of their private savings |
| Listing | the bond is listed on the Luxembourg Stock Exchange |
* subject to the adoption of the relevant draft laws (n. 8600 and 8633)
What are the benefits of investing in this bond?
Regular income with controlled risk
Bonds issued by the Luxembourg government benefit from a AAA rating, reflecting the country's financial stability and reliability in repayment.
Accessible to the public
Retail investors can subscribe to this bond for a minimum amount of EUR 1,000 and up to EUR 150,000 per bank.
Tax advantage
Luxembourg residents acting within the framework of investing their private savings benefit from a full and unlimited tax exemption on interest (subject to the adoption of bill no. 8633).
FAQ
What is a retail bond?
A retail bond is an investment product designed to be offered directly to individual (retail) investors.
In this case, it’s a loan you grant to the State, in exchange for which you receive regular interest (coupon) payments and repayment of the principal at maturity.
If I invest, when can I get my money back?
The bond has a duration of 3 years, which means that the invested capital will only be reimbursed at maturity.
Interest is credited to your current account with your bank every 12 months from the issuance date.
It is possible to offer the bond for sale on the secondary market before the end of the 3-year term. For further information regarding transactions on the secondary market, please contact your bank.
Are the interest payments taxable?
This bond offers a significant tax advantage* for Luxembourg resident individuals acting within the scope of the investment of their private savings: the interest is not subject to income tax.
The after-tax yield of this bond will therefore be higher than that of a similar investment subject to taxation.
Interest payments are exempt from the 20% withholding tax on interest (RELIBI) for all individuals. The exemption is full and uncapped.
However, in the event of a resale of the bond within a holding period of 6 months following acquisition, any potential capital gain from the sale of the bond constitutes taxable miscellaneous income (referred to as “speculative gain”).
Non-residents, including individuals taxed pursuant to article 157ter LIR (i.e., so-called non-residents taxwise assimilated to residents for Luxembourg purposes) do not benefit from any tax advantage in Luxembourg on the interest from this bond, as such interest is already exempt from Luxembourg taxation. The interest is taxable in their country of tax residence in accordance with the applicable rules.
* subject to the adoption of bill No. 8633
Are there any fees associated with this product?
There are no subscription fees, but banks may apply additional fees in accordance with their commercial pricing policy.
Is this product intended only for Luxembourg residents?
No. Luxembourg residents and non-Luxembourg residents can invest in this product.
Can I pre-order this product?
No, pre-orders are not possible. Orders can only be placed starting January 15, 2026, at 14:00 CET. Subscriptions will be allocated on a “first come, first served” basis.
However, to save time when subscriptions open, you can already contact your bank to ensure all required investor documentation is complete (such as your client risk profile and KYC information).
How will the funds be used?
The funds raised will be allocated to investment projects according to the criteria established in the Defence Bond Framework available here. Exclusion criteria are listed in this same document.
An annual report detailing the exact allocation of funds will be published at least once a year on the website of the State Treasury.
Is my personal data protected?
Only the bank through which you subscribe and subsequently holds the bond will be able to access your personal data.
When and where can you subscribe?
It will be possible to subscribe to the bond only from January 15, 2026 at 14.00, and no later than January 30, 2026. This issuance is limited to EUR 150 million. Once this amount has been reached, it will no longer be possible to subscribe to the bond.
The following banks act as distributors of this investment product:
Disclaimer:
Each potential investor is invited to consult their bank relationship manager regarding the legal, tax, and related aspects of an investment in the bond. Each potential investor must be able to determine, based on an independent review and with the assistance of any bank relationship manager they deem appropriate under the circumstances, that the acquisition of the bond (i) meets their needs and financial objectives, (ii) complies with all regulations or restrictions applicable to investments, and (iii) is a suitable investment for them, considering the risks inherent in acquiring and holding the bond.
For further information on the product’s characteristics, please consult this dedicated website as well as the Information Memorandum which will be available on this website prior to the opening of subscriptions.