Second Citizenship
August 15, 2023
Reading Time: 7 min

Luxembourg Golden Visa: residence permit in safe and stable country

Securing Luxembourg residency is straightforward, with investment options ranging from €500,000 to €20 million.

You can delve into the rewarding funds market or boost economic activities by investing in businesses under investor-friendly legislation to obtain salient benefits.

Elena Ruda
Elena Ruda

Chief Development Officer in Immigrant Invest, lawyer

Luxembourg residency by investment guide 2023

Luxembourg Golden Visa: residence permit in safe and stable country

Luxembourg Golden Visa: program overview

Golden Visas" programs provide residence or citizenship permits with reduced physical presence requirements in exchange for investments within months. Italy, Spain, Greece, and Cyprus are among the popular nations to rise in Europe. Luxembourg Residence for Investors from Third Countries is the youngest migration program, opened in 2017.

The Luxembourg Residence by Investment Program is ideal for high-net-worth individuals who wish to enjoy the benefits of residing in one of Europe’s wealthiest countries.

The investment program embodies investor-friendly legislation catering to individuals with substantial financial resources.

Luxembourg residence permit by investment allows investors and their families to receive temporary authorisation, enabling them access within Luxembourg and across the European Union and Schengen Area.

The Luxembourg Golden Visa Program provides two financial routes:

  1. €500,000 of funds under the Residence by Investment option.

  2. €27,000 of annual regular income, under Residence by private reasons option.

Wealthy people can enrol in this investment program and become residents of Luxembourg in around six months, with a choice to become citizens after five years.

8 advantages of becoming a resident of Luxembourg

Becoming a resident of the Grand Duchy of Luxembourg can be equated to winning big. This wealthy European nation offers residents an array of benefits, from high living standards to seamless access across Europe’s Schengen Area.

1. Visa-free access. A residence permit in Luxembourg opens up doors beyond its borders — specifically 27 other countries within the Schengen Area. Imagine being able to traverse these nations without border checks every time you cross into another country.

It isn’t just about short jaunts either; as a resident, you can stay up to three months outside your home base for a half-year period. For frequent travellers or those with businesses spread across multiple locations, this visa-free privilege is nothing less than revolutionary.

2. High living standards. Luxembourg isn’t just rich on paper — it delivers when it comes down to quality life experiences too. With one foot firmly planted among Europe’s wealthiest countries and another striding towards providing excellent public services such as healthcare and education, this tiny nation packs quite a punch.

The cultural scene here reflects through its diverse population that speaks French and German along with their native language Luxembourgish offering new residents an enriching social environment.

3. Networking and employment. You can legally work and be employed in Luxembourg with a residence permit. The country has a strong and diverse economy, focusing on finance, technology, and other industries, providing various job opportunities.

Being a resident in Luxembourg can provide you with networking opportunities within the country’s diverse and international business community, potentially leading to valuable professional connections and career growth.

4. Access to social services. As a resident, you may be entitled to certain social services, such as healthcare, education, and social security benefits, depending on your specific situation and the residence permit.

5. Tax benefits. Luxembourg has a favourable tax regime for particular residents, such as highly-skilled workers and expatriates. The country offers a variety of tax incentives and deductions that can make it attractive for individuals with specific skills and qualifications.

6. Family reunification. If you hold a residence permit in Luxembourg, you may be able to sponsor family members for residence permits, allowing you to reunite with your loved ones.

7. Education opportunities. Luxembourg has a well-regarded education system, and as a resident, you may have access to educational opportunities for yourself and your family members.

8. Permanent residency and citizenship. Over time, residence permits can lead to permanent residency and potentially citizenship, granting you long-term rights and a sense of belonging.

Luxemburg Golden Visa

Luxembourg is the only state to provide free public transportation for everyone. People can use trams, trains and buses without any payment

Investment options for Luxembourg residency

Securing a Luxembourg residence permit might seem complex, but it’s pretty straightforward once you understand the available investment options. The investor visa program in this EU nation offers opportunities ranging from $500,000 to an impressive $20 million.

In return, you get a secure place among other foreign nationals who have made similar contributions stimulating both individual companies' overall national prosperity.

1. Residence by investment include several financial options for obtaining residency in Luxembourg, among them:

  1. €500,000 in an existing company with its registered office in Luxembourg, which needs to be held for five years.

  2. €500,000 in a new business, with a registered office in Luxembourg. The company must hire five full-time employees within three years of being incorporated. The National Employment Agency needs to assist in the hiring process.

  3. €3 million capital contribution in a management and investment structure, such as family wealth management funds, private equity, or venture capital funds.

  4. €20 million in the form of a deposit with a financial institution established in Luxembourg, which needs to be held for five years.

2. Residence by private reasons is suitable for those who are not going to work in Luxembourg and requires 2 main conditions:

  1. Proof of a regular flow of income of at least €27,000 per year.

  2. Permanent accommodation in Luxembourg, which can be rented or purchased.

The main applicant may include their spouse and dependent children under 21 in the residency application.

How to obtain a residence permit in Europe?

Practical Guide

How to obtain a residence permit in Europe?

Luxembourg taxation system

Luxembourg is often considered favourable for businesses and high-income individuals. Here are some key points about the tax system in Luxembourg. Luxembourg has an extensive network of double-tax treaties with numerous countries to avoid double taxation and promote international trade and investment.

Personal income tax. Luxembourg employs a progressive tax rate for individuals, which can go up to 42% for the highest income earners of more than €200,000. However, the effective tax rate can be influenced by various factors, including deductions, exemptions, and family status.

Corporate tax. The standard corporate income tax rate in Luxembourg is 24,94%. However, various provisions and exemptions can significantly reduce the effective tax rate for certain types of companies, particularly those engaged in intellectual property or finance.

Value-added tax (VAT). Luxembourg has a standard VAT rate of 17%, with reduced rates of 8% and 3% for specific goods and services.

Wealth tax. Luxembourg does not have a general wealth tax, but a subscription tax applies to certain financial and insurance companies.

Real estate tax. The sale or transfer of immovable property in Luxembourg is subject to a proportional registration duty of 7%.

Rental agreements are not subject to registration obligations except long-term leasing agreements. If the rental agreement is voluntarily written, registration duty at 0,6% will remain due.

Municipalities levy an annual real estate tax, the basis of which is the unitary value of the real estate. The introductory rate varies from 0,7% to 1% of the unitary value, according to the category of property, and is multiplied by a coefficient, which contrasts with communes and different types of property.

Documents to apply for Luxembourg residency

Required documents for residency application:

  1. Application form with a photo.

  2. Proof of accommodation.

  3. Financial self-sufficiency documents.

  4. Birth certificate.

  5. International passport.

  6. Documents that prove investor income is legal, for example, an employment contract.

  7. Certificates of no criminal records.

  8. Health insurance policy.

  9. Documentation of payment of state taxes and fees.

  10. Documents confirming the fulfilment of the investment conditions stipulated in the application.

Application process for Luxembourg residence permit

Here’s what you should know about the application process to get a Luxembourg residency permit.

1

1 day

Finding an authorised agency

Contact a reputable local agency specialising in assisting with Luxembourg residency applications.

2

1 week

Due Diligence and submitting documents

The applications can be submitted once the preliminary due diligence checks are finished. An investment application is sent to the Ministry of Finance or the Ministry of Economy under the residence by investment option.

3

1 month

Application approval

If granted, the application is examined by the Ministry of Foreign Affairs for final approval. After approval, the applicant’s present country of residency is contacted to obtain a visa type D. Application to reside for private reasons must be made to the Ministry of Foreign Affairs.

4

1 month

Getting a visa

If accepted, the applicant’s present country of residence requests a visa category D, which is then picked up at the nearest consulate or embassy.

5

3 months

Travels to Luxembourg

The investor completes a medical examination within 90 days of gaining authorization, applies for a residence visa, and registers with their commune of residence three days after arriving.

After completing these steps, applicants will be issued a temporary residence permit.

Subject to renewal, the residence permits are initially valid for either three years for residence by investment or one year for residence by private reasons. Investors need to prove they’ve been in the country for a significant amount to renew their residence status.

Luxembourg residence permit validity and renewal

The pathway to Luxembourg residence by investment offers foreign investors an efficient route into one of Europe’s wealthiest countries. The timeline from application submission to approval usually spans about six months.

Upon the green light, successful applicants receive temporary permission with a validity period of 5 years. It transforms into a valid Luxembourgish residents permit once you set foot on its soil under the investor visa program. Those who choose investments are initially granted three years of residency, while private reasons permits come with one-year validity.

Renewal process. Keeping your Luxembourg residence permit alive beyond its initial period of 5 years requires consistent living within the country’s borders and meeting certain stipulations established by European affairs authorities. Failure to adhere could lead to non-renewal or even revocation of your status.

In most cases, renewing involves showcasing continued compliance with conditions tied to your investment, whether direct, like investing in real estate flexible options or indirect, such as pouring funds into local businesses during your stay here — evidence will be needed at renewal time.

Luxembourg Golden Visa Program disadvantages

Compared to other investment programs in Europe, real estate acquisition is unrelated to obtaining a residence permit in Luxembourg. At the same time, most investors prefer to invest in real estate and use objects for personal residence or renting out.

Real estate investment options allow investors to get additional income and even return investment after 5—7 years.

Many EU and Schengen Area states offer Golden Visa programs to obtain temporary or permanent residence permits through real estate purchases.

Other European states with a residency by real estate investment

Investment program

Costs

Term of obtaining

€150,000+
If renting real estate in the south of Malta and on the island of Gozo

4—6 months

€500,000+

2—3 months

€250,000+

2—6 months

€300,000+

3+ months

Steps towards permanent residence and citizenship

The pathway to permanent residence or Luxembourgish citizenship is a five-year journey of continuous residence in this affluent EU nation. This opportunity benefits the investor and their family, offering them an elevated lifestyle and access to numerous opportunities.

With a Luxembourg passport, you can travel to 176 countries without a visa or visa upon arrival.

Permanent residence eligibility. To be eligible for permanent residency in Luxembourg, one must have resided legally within its borders for a minimum of five years and provide evidence of stable financial resources along with an appropriate residence to meet general health and safety standards.

During this period, valid residence permits must be maintained without any significant gaps disrupting legal status within Luxembourg.

Luxembourgish citizenship requirements. Becoming a citizen involves more than just residing in the country; it requires integration into society and demonstrating language proficiency. You’ll need sufficient written and spoken knowledge of Luxembourg’s official language, Luxembourgish. It can be proven through standardised tests which assess linguistic abilities effectively.

Apart from mastering local dialects, prospective citizens should pass an examination on constitutional principles based on a completion certificate from the 'Living together in Grand Duchy' course offered by National Institute for Languages.

Key takeaways

  1. The Luxembourg Golden Visa Program isn’t only about obtaining residency in one of Europe’s wealthiest countries and providing entry to the whole EU and Schengen Area.

  2. The range of investment options offers flexibility for different financial capabilities with a minimum investment amount of €500,000 or an annual income of €27,000.

  3. A unique pathway exists for those seeking residency without engaging in work activities on Luxembourgish soil — through private reasons.

  4. While initial permits last up to three years, with continuous residence and meeting certain conditions, permanent residence or citizenship is within reach after five years.

  5. Securing permanent residence or citizenship in Luxembourg involves a five‑year residency, stable finances, suitable housing and language proficiency. It’s not just about living there; it’s about integrating into society and mastering the local dialects.

Immigrant Invest is a licensed agent for citizenship and residence by investment programs in the EU, the Caribbean, Asia, and the Middle East. Take advantage of our global 15-year expertise — schedule a meeting with our investment programs experts.

Frequently Asked Questions