The Golden visa scheme has generated very low or no interest among wealthy investors.  The Minister of Luxembourg has officially announced the application numbers of golden visa scheme in an interview to REPORTER.

The Ministry of Economy made it clear that it had received a total of three inquiries. The six visas issued concern a single investment project. Another is still pending and eventually an application was rejected. The Ministry of Finance received “just under a dozen” proposals, but declined all.

“The Six visas issued is very little compared to Malta, Cyprus or Portugal”, said the President of Luxembourg Association of Family Offices

Golden visa

Luxembourg requires a minimum EUR 500,000 to receive golden visa residence permit.

• Existing Luxembourg Company: At least EUR 500,000 in an existing company with its registered office in Luxembourg an commit to keep for a duration of at least 5 years
• New Businesses: At least EUR 500,000 in a new business, 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. The recruitment of staff must be in collaboration with the Agence pour le développement de l’emploi – ADEM
• Investment funds: 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 finances.
• Bank Deposit: 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.

In response to a parliamentary question, the ministers  Asselborn, Schneider and Gramegna explained the details of the golden investor visa scheme in Luxembourg being rigorous checks for money laundering and sanctions (below).

Luxembourg can only support the Commission’s efforts to develop a common set of security controls for investor-related programs.

The amended law of 29 August 2008 on the free movement of persons and immigration places the investor on an equal footing with other categories of third-country nationals as regards security checks. Thus, a systematic check of the Schengen Information System (SIS) is carried out for each third-country national applying for a residence permit as an investor before entering the territory. Similarly, an extract of the criminal record from the country of origin or country of last residence must be attached to the application. Articles 38 to 41 of the aforementioned law also apply to investors, in particular with regard to the minimum period of residence per year in Luxembourg.

No later than 12 months after the issuance of a residence permit, as an investor, the ministry that initially informed the application (the Ministry of the Economy or the Ministry of Finance respectively) checks the conditions is subject to the residence permit in question. As part of this control the applicant must again provide convincing documentation of his investment. If a complete file is not sent, the Ministry may issue an unfavorable opinion which will result in the withdrawal of the residence permit by the Directorate of Immigration of the Ministry of Foreign and European Affairs.

The purpose of the introduction of the investor residence permit is to attract new quality investors wishing to invest in the recovery or creation of companies or manage their assets from Luxembourg. As the objective of this new residence permit is to have a complementary tool to encourage entrepreneurship and develop the financial center in Luxembourg, the procedures set up for the processing of applications necessarily include an audit. the quality and substance required by the legislator, as well as due diligence in the fight against money laundering and the financing of terrorism.

The Ministry of the Economy, as responsible for applications related to entrepreneurship, proceeds with the analysis of the relevance of the economic component of the applicant and verifies that the project falls within the defined scope of eligible sectors following the Grand-Ducal Regulation of 5 December 2017. This analysis is based on an investment plan provided by the applicant. The origin of the funds is controlled by the bank of the place granting the opening of the bank account

The Ministry of Finance, as responsible for the processing of applications for investments in an investment structure or in the form of a deposit with a financial institution, collaborates, depending on the type of investment, with the competent authorities, including the Financial Sector Supervisory Commission.

The Ministry also requires proof of origin of funds, statement of beneficial owners and full documentation of the project for investments within its scope. For investments in an investment structure, the applicant must provide a business plan describing the activities of the structure, governance and internal control mechanisms, financial, equipment and human resource requirements. The structure must also employ at least two full-time employees, who are not the beneficial owners.

In the case of investments in the form of a deposit with a financial institution, the applicant must undertake to maintain his investment in a bank account with a financial institution domiciled and duly authorized in Luxembourg, for a period of at least 5 years old.

Finally, the Ministry of Finance, as the national authority responsible for the implementation of financial sanctions, controls all natural and legal persons involved in an investment, at the level of the United Nations sanction lists and European Union, as well as at the World Check databank.

It should also be noted that pursuant to Article 53bis (6) of the amended law of 29 August 2008 on the free movement of persons and immigration, transactions carried out under the residence permit for investors are subject to national legislation. in force on the fight against money laundering and the financing of terrorism.

To date, the Ministry of Finance has issued, as part of an application for an investor residence permit, no favorable opinion on an investment project within its field of competence. The Ministry of the Economy has favorably notified the requests on the basis of article 53bis, paragraph (1), points 1 and 2 of the aforementioned law concerning 6 investors for whom the residence permits have been issued by the Directorate of the Immigration from the Ministry of Foreign and European Affairs.

These statistics show the rigor with which this law is applied in Luxembourg