Immigration: Luxembourg is playing the attractiveness card
The law of 8 March 2017 transposing the directive 2014/66/UE related to the conditions of entry and stay of third-country nationals (the “Immigration Law”) was published on 20 March 2017 and entered into force on 24 March 2017.
The law modifies the law of 29 August 2008 on the free mobility of persons and on immigration and introduces new categories of residence permits:
1. Residence permit for seasonal workers:
The sectors of activities for seasonal work are strictly defined by the Grand-Ducal regulation dated on 11 July 1989; in particular are considered eligible activities such as tourist guidance, holidays animation, etc.
Such permits can be delivered for a maximum period of five months over a twelve months period.
The applicant will have to submit (i) a copy of his employment agreement concluded with an entity established on the Luxembourg territory, (ii) the proof that he will have an adequate and suitable accommodation and finally (iii) an evidence as regards his affiliation with the health insurance.
2. Residence permit for investors:
The new legislation is aiming at attracting further investments in Luxembourg by facilitating the entry and stay of investors. Nevertheless, the legislator requires the compliance with certain conditions in order to give a certain substance to such investments.
The following investors will be eligible:
i. Investors investing at least EUR 500.000.- in an existing commercial, industrial or craft oriented company having its registered office in the Grand-Duchy of Luxembourg, and committing themselves to maintain their investment and the workforce in place within at least five years;
ii. Investors investing at least EUR 500.000.- in a commercial, industrial or craft oriented company to be incorporated in the Grand-Duchy of Luxembourg, and committing themselves to create at least 5 employments within the 3 years of the incorporation of the company;
iii. Investors investing at least EUR 3.000.000.- in an investment and management structure existing or to be incorporated in the Grand-Duchy of Luxembourg and committing themselves to maintain a certain substance in Luxembourg and to employ at least two persons; and
iv. Investors deposing at least EUR 20.000.000.- within a Luxembourg financial institution and committing themselves to maintain their investment for at least five years.
To be noted that investments made, directly or indirectly, in real estate are non-eligible. Furthermore investments mentioned under items (i) to (iii) shall consist of at least 75% of own funds and the maximum remaining 25% can be raised through loans having a maximal duration of 3 years whereas investments mentioned under item 4 shall consist of 100% of own funds.
The permits will have a limited duration of three years and it is important to stress out that 12 months after the issuance of such permit, the Luxembourg Ministry of Foreign and Europeans Affairs will check if all the prerequisites are still given and if it is not the case, it will require the applicant to regularize his/her situation.
3. Residence permit for employees in case of temporary intra-company transfers (ICT):
The essence of the Immigration Law is to facilitate the mobility of employees within a group company which has entities dispersed not only within the EU, but also in third-countries. Thus, are regulated by the Immigration Law:
- The entry and residence of third-country nationals into the territory of a Member State within the context of an ICT; and
- The mobility within the EU of third-country nationals who have obtained an ICT permit.
3.1. Conditions in relation to the issuance of an ICT permit in Luxembourg:
The host entity is ought to file an application and :
- prove that the sending company established in the third country belongs to its group;
- evidence the employment of the transferred employee during an uninterrupted period of 3 up to 12 months immediately preceding the date of the transfer for managers and specialists, such duration requirement will be of at least 3 up to 6 uninterrupted months for trainees;
- provide the employment agreement or mission letter detailing the duration of the transfer, remuneration, etc;
- evidence the professional qualification and expertise of the transferred employee; and
- provide a proof regarding the affiliation of the transferred employee with the health insurance.
The ICT issued for experts and senior executives will have a maximum duration of 3 years whereas the ICT issued for trainees will only have a duration of one year.
3.2. Mobility throughout the EU
Third country nationals having obtained an ICT permit in a Member State can be authorized to work in an entity of the group located in the Grand-Duchy under the fulfillment of some specific conditions. The Luxembourg hosting company shall notify the contemplated transfer to the Ministry of Foreign and Europeans Affairs by (i) mentioning the link between the sending company and the receiving entity, (ii) providing a copy of the employment agreement or of the mission letter and (iii) providing the proof that the concerned employee is subject to an ICT transfer. The stay in the Grand-Duchy is in principle limited to a maximum period of 90 days (on a period of 180 days). Nevertheless a long stay permit can be delivered and additional information is required to be communicated to the Ministry of Foreign and Europeans Affairs.
4. Residence permit for business continuity plans
In case of a serious incident in an entity having its registered office in a third country, employees can temporarily be transferred to a Luxembourg entity being part of the group, under the condition that the sending entity has been registered in Luxembourg. To be registered, the sending entity will in particular need to provide a description of its activities and of the group’s activities, to evidence the capitalistic links with the Luxembourg company, to detail the business continuity plans and list the identity and functions of the employees who will be transferred in case of an incident. The registration will be valid for a duration of one year.
Once a serious incidents occurs in the third country entity, it will have to notify to the Ministry of Foreign and Europeans Affairs in Luxembourg about it and provide the list of the employees being transferred as well as a description of their tasks in Luxembourg.
Should the prerequisites be fulfilled, then the employees will be granted a residence permit of a duration of one year with a one year renewal option.
Posting of employees: Introduction of new formalities and intensification of controls
The law of 14 March 2017 concerning the transposition of the directive 2014/67/UE (relating to the implementation of the Directive n°96/71/CE) for the posting of workers was published on 20 March 2017 and entered into force on 24 March 2017 (the “Posting Law”).
The Posting Law aims to prevent any fraud and to prevent aggressive social dumping within the EU.
The main goals of the law are therefore notably :
- to give a legal framework to the electronic platform launched by the Labour Inspection (“Inspection du Travail et des Mines - ITM”) which is used to issue the called “badge social”, delivered to each employee posted in Luxembourg and containing his identification data. The ITM will through this platform also collect relevant documents as the employment agreement, salary pay slip, a copy of the residence permit, a copy of the pre-hiring medical examination. This collection of documents will thus reinforce the power of control of the Labour Inspection;
- to oblige the Luxembourg company to check that all his co-contractor (and subcontractor if any) with posted employees in Luxembourg complies with all legal requirements. In such aim, they will not only have an information and verification obligation but will also have an injunction power in order to request the termination of any infringement and an obligation to report any contravention to the Labour Inspection;
- to reinforce collaboration between the Labour Inspection and the other administrations in Luxembourg (as for example Immigration Minister, Luxembourg Police and Accident Insurance Association (AAA), etc.) for more efficiently;
- to introduce administrative sanctions which can be pronounced in case of non-respect of the legal obligations related to a posting of employees (i.e. : between EUR 1.000 and 5.000 per posted worker and between EUR 2.000 and 10.000 in case of repeated offence);
- to authorize the Labour Inspection to order emergency measures to stop any violation of specific rules relative to safety and health at work. The Director of the Labour Inspection can notably stop the work of the posted workers if specific legal obligations are not respected; and
- to introduce a right for the posted worker to launch a claim before the Luxembourg Courts concerning his posting conditions even after he left the Grand-Duchy.
In collaboration with Rupsee Sati Trainee - rupsee.sati@luther-lawfirm.com
