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Luxembourg Tax Alert 2016-28

Luxembourg Tax Alert 2016-28



Xavier Martinez

Partner, Global Mobility and People Services

KPMG in Luxembourg


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Luxembourg announces a new residence permit for third-country high-net-worth individual investors

The transposition of Directives 2014/36/EU and 2014/66/EU1 offers interesting opportunities for the Luxembourg government to position Luxembourg as an entryway for entrepreneurs and investors into Europe.

Prior to summer 2016, the government introduced a dedicated draft law (draft law n°6992). This draft law foresees, amongst the five types of residence permits to be implemented in the Luxembourg law, a kind of exclusive residence permit dedicated to third-country HNW investors.

With this new “European visa” for wealthy investors, the government demonstrates a clear line of attraction for entrepreneurs as well as a vision of diversifying the Luxembourg economy. It appears that it fully expects the development of alternative/complementary solutions that are able to remodel the current shape of Luxembourg’s financial center.

As such, the targeted investors will have four possible options available for their work permit:

  1. invest at least EUR 500,000 in an existing company that has its headquarters in Luxembourg, and which performs commercial, artisanal, or industrial activities; the investor should also commit to maintaining the same level of investment and employment for at least five years
  2. invest at least EUR 500,000 in a new company based in Luxembourg that performs commercial, artisanal, or industrial activities, and commit to hiring at least five employees (in collaboration with ADEM) within a three year period following the creation of the new company
  3. invest at least EUR 3,000,000 in an investment and management vehicle based in Luxembourg and maintain an appropriate substance
  4. invest at least EUR 20,000,000, in the form of a deposit with a financial institution established in Luxembourg, and commit to maintaining this investment for at least five years.

The residence permit would be granted for an initial period of three years, and would be subject to further extension.

This new exclusive premium-based permit could promote Luxembourg as a destination of choice for international HNW investors looking for a high-end relocation destination with top business opportunities.

The local business community is expecting the draft law to become a final bill soon, though there is some uncertainty as to whether and how the Luxembourg State Council’s recently stated reservations will be addressed in the bill.


1Directives which restructure the immigration environment and provide new conditions of entry/residence for seasonal third-country nationals.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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