Immigration: new restrictions on residence permits for personal reasons

The Act of April 21, 2023 amending the amended Act of August 29, 2008 on the free movement of persons and immigration was published on May 8, 2023 in the Mémorial A 228 (hereinafter the “Act”).

Among other things, the Law structures the various categories of removal measures, with a view to better management of the phenomenon of illegal residence of third-country nationals on Luxembourg territory, and modifies the system of detention of such nationals.

The law also sets out a significantly more restrictive framework for granting residence permits for private reasons, as summarized below.

1. Need to have a link with Luxembourg, the European Union or the Schengen area

• Need to have a link with Luxembourg, the European Union or the Schengen area
• Previously, proof of sufficient resources[1] and of not posing a threat to public order, health or safety was sufficient to obtain a residence permit for private reasons, but this is no longer sufficient.

From 12 May 2023, an applicant for a residence permit for personal reasons must prove that they have a link with Luxembourg or with an EU or Schengen Area country. This may be because they are already living in Luxembourg as a result of family reunification, because they have strong and lasting personal or family ties with the person(s) they wish to join in Luxembourg (except polygamie), or because of the source of their financial resources.

2. Source of financial resources

An applicant for a residence permit for personal reasons must be able to support themselves using “their own resources”. The Law now expressly states that these resources may only derive from:

• a professional activity carried out in another EU or Schengen Area member state; or
• a retirement, disability or survivors’ pension paid by a Luxembourg social security institution or equivalent in another EU or Schengen Area member state.

It will now be harder for third-country nationals with no links to Luxembourg or the EU (in the broadest sense) to obtain a residence permit for personal reasons, despite having proof of sufficient resources. If an applicant does not meet the new criteria laid down by the Law, they may have to apply for a different type of residence permit.

For third-country nationals with sufficient resources, the residence permit for investors will be a preferred alternative to the residence permit for personal reasons, provided they meet the conditions for obtaining the investors’ residence permit.

3. The investment visa program:

The investment visa program provides for the following 4 options for Investors from non-EU countries to receive a residence permit:

• A minimum of EUR 500,000 into an existing Luxembourg company (with commercial, industrial, or craft activities) and commit to maintain the existing employment for five years
• A minimum of EUR 500,000 into a new Luxembourg company (with commercial, industrial, or craft activities) and commit to create at least five employments in the following three years
• A minimum of EUR 3 million into an existing or new investment or management structure, with a registered office in Luxembourg, which must have appropriate substance
• A minimum of EUR 20 million by deposit into a financial institution established in Luxembourg, which must be maintained for at least five years