New investor status in Luxembourg

Since the Law of 8 March 2017 amending the Law of 28 August 2008 on free movement and immigration came into force (on 24 March 2017), the regulation for third-country nationals (i.e. nationals who are not citizens of a Member State of the European Union or the European Free Trade Association, “TCN”) have been modified.

One of the major changes with this law is the possibility for TCN investors to obtain a specific residence authorisation/permit based on four investment options:

  1. Who will invest at least 500,000 euros in an existing company, having its registered seat in the Grand Duchy of Luxembourg, while committing to maintain the investment as well as the employment level for at least 5 years (does not apply if the acquired company has financial difficulties and fulfills certain requirements) , or
  2. Who will invest at least 500,000 euros in a company to be created, having its registered seat in the Grand Duchy of Luxembourg, and having a commercial or artisanal activity with the commitment to create at least 5 jobs to be filled in collaboration with the Luxembourg Unemployment Authority (ADEM) within 3 years of the creation of the company, or
  3. Who will invest at least 3,000,000 euros in an existing or to be created investment and management structure with its registered seat in the Grand Duchy of Luxembourg and maintaining locally an appropriate structure, or
  4. Who will invest at least EUR 20,000,000 in the form of a deposit in a Luxembourg financial institution (cash or financial instruments) with the commitment to maintain this investment for a minimum period of 5 years.

The investments can be made by the applicant in his own name or through an investment structure.

Regarding the first 2 options, the investment shall be made into companies from a specific economical sector determined by Grand-Ducal Regulation

Regarding the first 3 options, the investments shall be composed of at least 75% of the applicant’s own funds whilst the remaining 25% may be borrowed for a period of 3 years at least.

The last option (deposit of at least EUR 20,000.000) was clearly aimed at high net worth individuals (HNWI) wishing to have (part of) their fortune managed by Luxembourg professionals (loans for this option are excluded).

One exception is that the investments cannot be related directly or indirectly to the real estate market (sale or lease).

The residence permit for investors will be valid for an initial period of 3 years, subject to renewal for further 3 years.

The TCN investor also authorizes to make an application for a business license (provided the requirements therefore are fulfilled).

Access to Luxembourg Working Market for highly skilled workers

Highly skilled workers from third countries (i.e. outside of the EU or the EEE) may apply for a special residence permit subject to an advantageous regime.

The residence title for which highly skilled third-countries nationals (“TCN”) can apply for after entering the country (a temporary authorisation to stay is mandatory before entering the territory) is referred to as « EU blue card ».

  • Requirements

To be considered as a highly skilled worker, the applicant shall meet the following requirements:

  • Have concluded an employment contract for a duration equal to or longer than 1 year ;
  • Provide documentary evidence for the required high professional qualifications in the relevant sector or activity ;
  • Receive a salary at least equal to an amount determined by Grand-Ducal regulation (depending on the activity, 1,2 – 1,5 times the average gross annual salary g. in 2016: EUR 58.636,80 or EUR 73,296)

 

  • Duration of the European blue card

With the latest reform in 2017, the duration of validity of the EU blue card was brought from 2 to 4 years (or the duration of the employment contract plus 3 months if the employment contract has been concluded for a period inferior to 4 years).

The EU blue card can be extended for 4 more years.

  • Advantages

Some of the advantages of the EU blue card are:

Full access to the Luxembourg working market

After 2 years, the EU blue card gives unlimited access to the Luxembourg labor market for all highly qualified jobs in the private sector (public sector is partially excluded)

Extension to family members

The family is allowed to immediately accompany the highly skilled workers when the person who has been delivered the residence permit arrives in Luxembourg or to join him afterwards.

Intra-Europe mobility

Under certain conditions, the card facilitates intra-European mobility and makes it possible to cumulate stays in different EU Member States in order to obtain long-term resident status.

Indeed, after 18 months of legal residence in the country that issued the EU blue card to a TCN, the TCN and his family members may move to another European Member State to exercise a highly qualified activity.

Maintain the status after termination of employment

Should the person face unemployment, the EU blue card is not automatically withdrawn. Indeed, the European blue card is not withdrawn if the unemployment lasts less than 3 months and occurs only once during the period of validity of the card.

  • Administrative steps

Before hiring a highly qualified TCN, the employer shall make a declaration of vacancy to the Luxembourg Unemployment Administration (ADEM) in advance, but the job will not be tested on the job market.

This means that the ADEM will not verify if the vacant position could be filled by a person available on the national or European labour market.

  • What to do in case of refusal

The residence permit for highly qualified TCN’s shall be delivered within 90 days as of the application (provided the application is complete).

If the applicant did not receive the residence permit within 90 days, the application is considered as rejected and the applicant may issue a claim against the refusal decision.

If the application was formally rejected, a claim may be issued within 3 months of the refusal.