Luxembourg’s residence-by-investment program offers an avenue for non-European nationals seeking to secure residency in one of the continent’s most stable and centrally located countries.

Positioned at the heart of Europe, the Grand Duchy of Luxembourg is a linchpin in the EU’s economic framework and boasts a high standard of living, making it an attractive destination for investors.

The program, inaugurated in 2017, is designed for affluent individuals aiming to invest in the Luxembourgish economy, thereby gaining the right to reside, and potentially, over time, establish citizenship within this prosperous nation.

Overview of the Luxembourg residence-by-investment program

The Luxembourg Residence by Investment Program, often referred to as the Golden Visa, enables third-country nationals to obtain residency by making substantial financial investments in the country.

This program is designed to attract foreign investment and bolster the country’s economy. Investors may select from several investment streams, with the minimum investment threshold typically set at EUR 500,000. Upon making the necessary investment, investors and their families are granted a residence permit, which can eventually lead to permanent residency and citizenship.

Different investment routes include:

• Investing in an existing Luxembourg company: A minimum of EUR 500,000 while maintaining employment levels for a stipulated period.
• Starting a new Luxembourg company: The same amount with an obligation to the national workforce.
• Management and investment structures: With a higher threshold, usually upwards of EUR 3 million.
• Deposits in financial institutions: Reserved for high-tier investments typically starting at EUR 20 million.

These options provide a gateway to potentially securing a Luxembourg passport, which ranks among the most powerful for global mobility.

Eligibility criteria for investors

The Luxembourg residence-by-investment program involves specific criteria that potential investors must satisfy to qualify. The program remains exclusive to non-EU investors, with a focus on offering a safe, business-friendly gateway for those seeking to enhance their global standing.

Key eligibility criteria include:

• Investment capacity: Investors must demonstrate the capability to make and maintain the investment for the required timeframe.
• Clean background: A clear criminal record and a reputable background are mandatory for the safety and integrity of the Luxembourg community.
• Commitment to Luxembourg: Investors are usually expected to show a degree of commitment to the nation, either through maintaining employment in their investment enterprise or contributing to economic activity.
• Payment of fees: Application and processing fees are part of the requisites, varying based on the investment route and complexity of the application.

The absence of wealth tax in Luxembourg makes it a particularly attractive option, encouraging those from developing nations or unstable economies to consider it for its relative safety and the high quality of life it offers. Non-EU citizens looking for a stable and economically sound European base find this a compelling program despite the lack of a low investment threshold option frequently found in other countries.

Investment paths and options

Luxembourg’s Residence by Investment program offers distinct pathways for investors seeking residency, each with substantial financial thresholds. These options not only pave the way for potential permanent residence but also contribute to the country’s economic fabric.

Direct investment in real estate or business

Investors looking to obtain residence in Luxembourg have the option of making direct investments into the nation’s economy, which can be in the form of investment in real estate or putting capital into a business. To qualify:

• Investing in an existing business: An investment of a minimum of EUR 500,000 is required in an existing Luxembourg company engaging in commercial, industrial, or craft activities. The investor must maintain the employment level for five years.
• Starting a New Company: Similarly, an investor can infuse EUR 500,000 or more into a new Luxembourg company. It is essential to demonstrate that the business adds value to Luxembourg’s economy.

These investments must be complemented by securing permanent accommodation in Luxembourg and ensuring the investor has appropriate health insurance coverage.

Financial investment opportunities

For those more inclined towards financial investments, Luxembourg’s program offers opportunities that involve significant capital placement in various financial entities:

• Management and investment structure: An investment of at least EUR 3 million in a management and investment structure already existing or yet to be created. These structures often participate in private equity, venture capital funds and family wealth management.
• Financial institution deposit: A more substantial investment of EUR 20 million can be made in the form of a deposit to a financial institution in Luxembourg, demonstrating the investor’s financial resources and commitment.

Foreign investors are attracted to Luxembourg for its stable and high living standards, as well as its reputation as a hub for indirect investment via investment funds. The variety of investment options reflects the country’s flexibility and openness to various types of investments, whether in direct assets like housing or in the broader financial ecosystem.

Application and acquisition process

The application and acquisition process for the Luxembourg Residence by Investment program is structured to ensure a smooth transition for investors seeking residency. It encompasses a comprehensive application submission followed by rigorous due diligence checks.

Comprehensive application process

Investors initiating the Luxembourg Residence by Investment journey must submit a range of required documents to the Immigration Directorate. The application process generally includes:

• A valid passport or other travel documents.
• Proof of investment (€500,000 in a new or existing company, €3 million in a management and investment structure, or €20 million as a deposit to a financial institution).
• A clean criminal record from the country of origin and any other country where the applicant resided for more than one year in the past decade.
• Documentation verifying the availability of appropriate accommodation in Luxembourg.
• Evidence of health insurance coverage.

Non-EU citizens must apply for a D visa to enter Luxembourg for a period longer than three months. Upon arrival, the investor needs to undergo a medical examination, which includes a medical check, typically including tests for tuberculosis and a certificate from a Luxembourgish doctor.

The investor then registers with the commune of residence and submits the application along with the necessary documentation. The processing time for the initial application can take several months.

Due Diligence and compliance checks

Luxembourg authorities conduct intensive due diligence and compliance checks to maintain the integrity of the program. These checks are critical to confirm that the investment stems from lawful sources and the applicant poses no security or reputational risks.

Checks include:

• Verification of the investment and the financial health of the business or financial institution involved.
• A thorough analysis of the applicant’s background to ascertain a clean criminal record.
• Confirmation of the legitimate origin of funds, often with the assistance of legal and financial experts.

Upon approval, the applicant and their immediate family, including the spouse, child or parent, if applicable, receive a residence permit granting them the right to live in Luxembourg and enjoy visa-free access to the Schengen Area. The permit is renewable as long as the investment is maintained and the applicant’s personal situation remains unchanged.

Family members must demonstrate knowledge of at least one of the three administrative languages (Luxembourgish, German, or French) when applying for citizenship after five years, although this requirement does not apply to the initial residence permit.

To maintain the permit, residents must not live outside Luxembourg for more than six consecutive months or a total of ten months within five years. All processes and procedures associated with acquiring residency by investment in Luxembourg should be approached with due regard for the legal stipulations and the necessary financial obligations.

Benefits and considerations

When assessing the Luxembourg residence-by-investment program, potential investors must weigh the immediate and long-term perks against the prerequisites and conditions for maintaining their investment status.

Life in Luxembourg post-investment

Luxembourg’s residence-by-investment program offers a multitude of benefits that cater to high-net-worth individuals seeking a high quality of life and political stability. Investors and their families can relish visa-free access to the European Union and the Schengen Area. They reap the rewards of a stable socio-economic environment, investor-friendly legislation, and no wealth tax on the capital gains derived from qualifying investments. Upon obtaining a residence permit, investors, their spouses, and children under 18 can also settle in the country, enjoying access to high-quality healthcare and education systems.

Investors should consider Luxembourg real estate as a solid investment option. The country’s real estate market is well-regulated, and purchasing property can serve as a qualifying investment for the visa program. In addition, by investing in a Luxembourg company, investors contribute to the local economy, which is synergistic with the Ministry of Economy’s goal to attract foreign investment.

Maintaining Residency and Path to Citizenship

To maintain residency, investors must fulfill certain conditions set forth by the Luxembourg government. This includes a mandatory integration course and having adequate health insurance. They should also ensure that the invested capital remains active within the stipulated sectors mentioned by the Ministry of Finance.

After five years of continuous residency, individuals may apply for permanent residency. Furthermore, the path to acquiring a Luxembourg passport is available after an additional five years, which grants the right to live, work, and study in any EU country. The Ministry of Foreign Affairs outlines various fees associated with the citizenship application.

Investors should also note that while the program’s low investment threshold is attractive, they must demonstrate their commitment to living in Luxembourg and must not be permanently absentee investors. Requirements include only financial contributions matched with a physical presence and integration into Luxembourg’s social fabric.

Why work with Knightsbridge Group?

Luxembourg offers a swift, uncomplicated, and cost-effective route to enjoying the perks of residency in Europe and the EU. By securing your residency permit through Knightsbridge, you and your loved ones will immediately gain access to visa-free travel across the EU, top-tier health and education services, an attractive cost of living, and enhanced opportunities for international trade.

Leveraging such benefits is best done with the guidance of industry experts. Knightsbridge Group has a deep understanding of the nuances of residency- and citizenship-by-investment programs, and we dedicate ourselves to simplifying the process for our clients.

Our team, rich in immigration service experience and specialised in securing second citizenship via smart investments, stands as your perfect partner in achieving global mobility and freedom for your family.

Reach out to our team now to begin your journey towards residency.