Got an eye on moving to Luxembourg? In this article, we’re running through work visas and citizenship, the complicated world of tax, and some pros and cons to think about before making the move.

Luxembourg is small but mighty. It’s brimming with multiculturalism, scenic landscape, more Michelin-starred restaurants than you could shake a stick at, and a strong economy that’s perfectly paired with a casual lifestyle.

If you’re interested in learning more about moving to Luxembourg, you’ve come to the right place. Read our guide and discover some of the crucial bits to know.

Getting a work visa in Luxembourg

If you’re moving to Luxembourg for work, the chances are you’ll need to sort out a visa. Luxembourg is a founding member of the European Union. This means nationals from countries inside and outside the EU will be treated differently.

EU nationals don’t need to apply for a visa. You must, however, secure a registration certificate after living in Luxembourg for longer than three months. You can do this by visiting the local authority offices in your area.

If you’re a UK citizen, you can stay in Luxembourg for up to three months without a visa. If you’re interested in working, you have a little more to do.

Before you enter the country, you should apply for a temporary authorisation to stay. You can do this through the Ministry of Foreign and European Affairs. It’s important to note that you’ll need a job offer before you can start your application.

Once you’ve arrived, make a declaration of your arrival and submit your official residence permit application. This permit will allow you to both live and work in Luxembourg.

Luxembourg citizenship

If you’ve fallen in love with living in Luxembourg, you might want to become an official citizen. Citizenship can be acquired in a couple of ways. Firstly, through family ties. Secondly, by living in Luxembourg for a long time (also known as citizenship by naturalisation).

To gain citizenship by naturalisation you must have lived, uninterruptedly, in Luxembourg for at least seven years before your application. You can apply to become a long-term resident from the Ministry of Foreign Affairs after this time.

However, there’s a little more to it than just living in the country for a while. To become an official Luxembourger (another name for Luxembourg nationals, not something you eat) you will need to:

• Be 18 years old or older
• Pass a speaking test in Luxembourgish
• Participate in three civic instruction classes (for learning about Luxembourg culture)
• Meet integrity requirements (possess a lawful, accurate record of being a long-term resident)

Once you’re able to meet all the requirements, you can crack on with your application.

Luxembourg tax

Luxembourg has a notoriously tricky tax system. It comprises three tax classes and 23 tax brackets starting at 0% and climbing to 42%.

Most taxes are levied at federal level in Luxembourg. These are taxes such as value-added tax (VAT), income and company tax, inheritance tax and estate tax.

There are some exceptions to taxes set at national level. Local taxes also play their part. Property tax and business tax in Luxembourg may differ depending on where you live.

VAT in Luxembourg

VAT or Taxe sur la Valeur Ajoutée (TVA) is an EU tax that businesses must pay. This is translated into increased prices for customers. Any business with an annual turnover of more than €35,000 is legally required to pay TVA. This also applies to self-employed traders.

TVA is separated into four rates. Currently, these are:

• Super-reduced rate: 3% (for food products, pharmaceuticals, restaurants, etc.)
• Reduced rate: 8% (cleaning services, repairs, heating, etc.)
• Intermediate rate: 14% (clothing for adults, wine, etc.)
• Standard rate: 17% (other alcohol, beer, adult shoes, etc.)

Luxembourg income tax

Foreigners in Luxembourg are generally liable to pay income tax. The amount you pay is dependable on a few factors. Your marital status comes into play as does your taxable income.

Taxable income includes income received from employment, self-employment and pensions. It also considers earnings from investments, rented property and capital gains as taxable.

Employees in Luxembourg fall into one of three tax categories for deciding tax-free allowance. There are then 23 income tax bands with 0% being the lowest and 42% – on annual earnings above €200,000 – being the highest.

Living in Luxembourg pros and cons

Luxembourg is a fascinating nation with plenty to think about before making the move. If you’re weighing up moving to Luxembourg, here are a couple of pros and cons to consider.

Pros

Free public transport

Unlike anywhere else in the world, public transport in Luxembourg won’t cost you a penny. The decision in March 2020 made access to all busses, trains and trams available to the public across the country completely free.

To top it off, the service is efficient, reliable and generally a pleasant experience. We would say you definitely get the most for your money but that doesn’t really work here.

Accessible healthcare

Luxembourg has a fantastic healthcare system. And what’s more, it’s available for free to all residents. They’re not short on medical and emergency facilities, and residents can choose their own doctor.

Cons

Renting is tough

Living in Luxembourg isn’t cheap. And you’re unlikely to find many nations in Europe with a more difficult renting experience. Luxembourg is a small country and competition makes finding rental accommodation a headache. You’ll also struggle to find a place if you haven’t completed the probationary period on your job yet. The amount you earn is also a factor.

High demand means a high price. According to Numbeo, renting in Luxembourg is 47.41% more expensive than in the UK.

Language medley

Luxembourg has three official languages. If you don’t already know any Luxembourgish, German or French, this means you have some learning to do.

Although English is widely spoken, French dominates trade, hotels and restaurants, Luxembourgish is the language of TV and radio, and German is the most popular for the press. It can be a pain but also an interesting cultural experience.

Send money to Luxembourg

Moving to Luxembourg means shifting your money. Whether you’re looking to buy property in Luxembourg, send money to family, move your pension or transfer funds to a Luxembourgish bank account, we can help.

We offer market-leading exchange rates to ensure you get the most for your money. And our dedicated Currency Specialists can talk you through strategies to manage the risks of market fluctuations.

To have a chat with a Privalgo Currency Specialist, click the button below.

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