In an increasingly uncertain world, where security and defence concerns are growing ever more critical, Luxembourg is breaking new ground with the launch of its Defence Bond in January 2026. This state-issued bond allows citizens to invest directly in the nation’s defence.
The initiative offers not only a chance to invest in the country’s future but also a guaranteed return accessible to all.
Facing mounting geopolitical challenges, Luxembourg has taken decisive action to bolster its defence capabilities. By introducing the Defence Bond, the Grand Duchy becomes the first European country to offer a public bond specifically dedicated to national defence. The innovative product enables citizens to play an active role in safeguarding their country.
The Defence Bond stands out for its security and appeal. Offered over a three-year term, it provides a fixed, competitive interest rate, ensuring investors a stable return. Subscriptions start at €1,000 and may reach up to €150,000 per person per bank. Issued by the Luxembourgish government—whose AAA credit rating underscores its financial strength and stability—the bond is a reliable investment, with capital fully repaid at maturity.
Another key benefit for resident investors: interest payments are exempt from income tax, boosting net returns.
While primarily aimed at Luxembourg residents, the Defence Bond is also available to non-residents. Citizens, whether living in Luxembourg or abroad, can subscribe and contribute to the country’s defence. Subscription opens on 15 January 2026 and will run until 30 January 2026, or until the €150 million cap is reached. Interested investors must visit one of the partner banks - Spuerkeess, Banque Raiffeisen, BGL BNP Paribas, Banque de Luxembourg and BIL - to subscribe.
The funds raised through the issuance of the Defence Bond will be used to finance crucial defence projects for national security. Among the projects funded are investments in aviation, satellites, vehicles, communication equipment, self-protection systems, and infrastructure. To ensure transparency, the Luxembourg government will publish an annual report detailing how the funds are used. This rigorous oversight guarantees investors that their contributions are deployed effectively and responsibly.
The Defence Bond marks a significant step forward in public defence financing in Europe. It allows citizens to actively support national security while enjoying an attractive return underpinned by first-rate investment security. With this bond, Luxembourg offers its citizens a rare opportunity to combine patriotic engagement with financial reward, while contributing to a strategic initiative shaping the country’s future.
For more information and to subscribe to the bond, visit defencebond.lu.
