Migratory pathways for start-ups and innovative entrepreneurs in the EU

The main objective of this study of the European Migration Network is to provide objective and reliable information about migratory pathways for start-ups and innovative entrepreneurs to Luxembourg.

Fostering start-ups and innovative enterprises is a national policy priority for Luxembourg as providing support to entrepreneurship and start-ups has been on the Luxembourgish governments’ agenda since 2013. It has been a part of a more general diversification policy of existing economic structures in order to increase economic growth of the country and reduce dependence on the financial sector, which remains the dominant economic pillar. The current Governmental programme 2018–2023 encourages support to start-ups, the acceleration of the development of the start-up ecosystem in Luxembourg as well as the promotion of Luxembourg as a ‘start-up nation’ both at national and international level.

What should be pointed out is that this policy is not specifically targeted at third-country start-ups and innovative entrepreneurs, but aims to attract international investment, (innovative) enterprises and researchers in general. Thus, the mainstream immigration policy established by the amended Law of 29 August 2008 on free movement of persons (hereafter referred to as ‘Immigration Law’) for ‘self-employed worker’ or ‘investor’ residence permits is applied. The conditions that need to be fulfilled in order to be issued either a ‘self-employed worker’ or ‘investor’ residence permit as well as the conditions for the renewal of the residence permits are explained in detail in Section 3.3 and in Section 5, respectively. Several of the stakeholders involved in the context of this study reported that the existing regulations are sufficient and there is no need to introduce new ones or ones that would specifically target third-country nationals.

Several initiatives have implemented in order to support the development of innovation in Luxembourg. Luxinnovation, the National Agency for the promotion of Research, Development and Innovation, was established already in 1985 and currently is reinforcing Government’s economic development objectives by providing support to companies and researchers in order to foster innovation.

One of these initiatives, launched by the Ministry of the Economy in 2015 and implemented by Luxinnovation, is the Fit4Start acceleration programme which is particularly aimed at innovative ICT start-ups and recently also at start-ups from the health technologies. This programme provides coaching, business development support and funding to innovative projects or young innovative start-ups from around the world. Another important policy in the context of this study is the amended Law of 17 May 2017 on the Promotion of Research, Development and Innovation which provides a national funding scheme for Young Innovative Enterprises. Under this scheme, unlisted small enterprises that are registered for a maximum of five years can apply for State aid at the Ministry of the Economy’s Research and Innovation Directorate. Furthermore, Luxinnovation also animates the Luxembourg Cluster Initiative established by the Government in 2002. The objective of this initiative is to encourage communication and exchange of knowledge between cluster members (involving both the public and private sector) as well as to encourage use of new technologies and identification of possible business opportunities.

This study further presents a table of rights and incentive measures in place to attract start-up founders and particularly highlights the access to special funding and investments, the co-working spaces as well as the access to incubation/accelerator support programmes, among others.

In addition to the elements presented above, this study also elaborates on the following questions: What is the process and what are the requirements for starting up a business in Luxembourg? What are the main sectors and industries in which Luxembourg aims to attract start-ups? What is the role of local and regional authorities in creating and supporting entrepreneurial ecosystems? What role can actors such as local authorities, the private sector or higher education institutions play in attracting start-ups? Are there factors/conditions in place that incentivise start-ups and innovative entrepreneurs to use specific immigration routes?

Lastly, with the use of fictional scenarios, four case studies aim to provide an understanding of the possible admission options of different types of start-ups and innovative entrepreneurs.