Since the law of March 8, 2017, a new status of a residence permit for investors from third countries has appeared in Luxembourg.
The introduction of a residence permit for investors is part of the policy of diversifying Luxembourg’s economy, encouraging entrepreneurship and developing the financial center. This initiative therefore aims to attract new high quality investors who are willing to invest, for example, in the takeover or creation of businesses, or family office structures, or who wish to manage their assets from Luxembourg.
Who is concerned?
Third-country nationals can apply for a residence permit as an investor provided they plan to invest:
- at least EUR 500,000 in an existing company, carrying out a commercial, craft or industrial activity, with its registered office in Luxembourg with the commitment to maintain at least 5 years their investment and a level of employment which must be equivalent to the level at the time of the investment;
or - at least EUR 500,000 in a new company still to be created, carrying out a commercial, craft or industrial activity, with its registered office in Luxembourg and at least 5 work positions which must be created within 3 years of the incorporation of the business;
or - at least EUR 3 million in a management and investment structure, either existing or still to be created, with its registered office in Luxembourg where it must have and maintain the necessary substance (with at least 2 work positions);
or - at least EUR 20 million in the form of a deposit of funds with a financial institution established in Luxembourg, and with the commitment to keep said deposit for at least 5 years.
First three investments referred above must consist of at least 75% equity. 25% of the investment may be borrowed over a period of at least three years.
How to Proceed?
First step: Application for an opinion on an investment project
The applicant must first obtain a favourable opinion concerning their investment project from:
- either the Ministry of the Economy (in the case of an investment in an existing business or the creation of a new business); or
- the Ministry of Finance (in the case of an investment in an investment structure or in the form of a deposit with a financial institution).
Second step: Authorisation to stay
In the case of approval of the Ministry of the Economy or the Ministry of Finance, the third-country national has to, before entering the country, submit the application for the authorisation to stay from their country of origin:
- to the Immigration Directorate of the Ministry of Foreign and European Affairs;
or - to a Luxembourg diplomatic or consular body or to a diplomatic or consular mission representing Luxembourg.
In case of a favourable reply, the third-country national receives a ‘temporary authorisation to stay’, sent by post. The temporary authorisation to stay is valid for a duration of 90 days. After entering Luxembourg, the third-country national must take steps to obtain a residence permit.
Third step: Residence permit application
Third-country national must submit an application for a residence permit to the Immigration Directorate of the Ministry of Foreign and European Affairs within 3 months of arrival to Luxembourg.
Validity and Renewal of the Residence Permit
The residence permit for ‘investors’ is valid for a maximum of 3 years and is renewable provided the conditions for renewal are still met.
Review of the Application
After 12 months at the latest of the issuance of the temporary authorisation to stay for investors, the minister who validated the investment project will verify if the conditions regarding the investment project are still met.
If they are not, the minister can grant a deadline (maximum 12 months) to correct the situation. If the situation has not changed after the deadline has passed, the minister concerned can address the minister responsible for immigration matters and suggest that the residence permit be withdrawn.