How to establish yourself in Luxembourg as a start-up entrepreneur
I have a start-up. It is an IT project involving artificial intelligence for the HR sector.
I have a start-up. It is an IT project involving artificial intelligence for the HR sector. It will modernise the industry, analyse data and help make more informed decisions.
To understand that he needs Luxembourg
Even before February 2022, my team and I decided to move it to Europe, to France. Here, I spent several months going door to door, pitching the project. At one of the large organisations, I presented our AI to a rather prominent gentleman, whose name I will not mention. At the end, he told me that he did not speak English! My French wasn't very good at the time, so it was difficult to promote the project.
Well, the last straw was a conference we attended. There, the guys on stage were seriously telling everyone that they were selling magic lamps that help you sleep better.
My team and I exchanged glances and realised that we could probably try our luck with artificial intelligence in another region, or perhaps even another country. What were the options? Only Luxembourg, so I headed there to register as a start-up.
Deal with documents and legalisation
It should be clarified that there is no such thing as a "start-up visa". It is a work visa for self-employed persons from third countries. Essentially, it gives you the right to come and obtain a residence permit without a mandatory contract with an employer in the Grand Duchy.
The main difference from most legalisation methods is that here you apply for both a residence permit and a business permit at the same time. Since you are so smart and want to do your own thing, please provide justification and obtain permission. It's logical.
The process itself is quite quick, but it took me about five months because I had to return to Russia to get some documents.
The following are required for a residence permit:
- Questionnaire
- Certified copy of passport.
- Certificate of no criminal record.
- Curriculum Vitae
- Financial and business plan.
- Sufficient funds in the account to conduct business.
- Business licence.
- A notarised certificate stating that the applicant is not bankrupt.
- Bank statement for the transfer of €24 to CCP Luxembourg IBAN LU 47-1111 008792 620000 - CCPLLULL with the note: "First name Last name autorisation de commerce".
- Documents confirming that the applicant possesses the required qualifications and fulfils the conditions necessary for access to the profession.
To obtain a business licence, you need:
- Questionnaire
- The Droit de Chancellerie tax stamp, worth €24, can be obtained from the Administration de l'enregistrement, des domaines et de la TVA (Registration, Property and VAT Office). This amount can also be paid by bank transfer to the following IBAN account: LU76 0019 5955 4404 7000 (BCEELULL) of the same authority with the following message: "autorisation d'établissement" (attach a copy of the payment).
- A copy of your identity card or residence permit (both sides).
- Lease agreement or confirmation of company establishment.
- A certificate of no criminal record issued no more than six months ago by the country (countries) in which the person has resided for the last 10 years.
- A notarised certificate stating that the applicant is not bankrupt. The certificate must not be older than 6 months.
You probably have some questions. For example, how is it that in order to obtain a residence permit, you need a business licence, and in order to obtain a business licence, you need a residence permit? The point is that these processes are lengthy, and you will most likely not have all the necessary documents.
To speed things up and simplify the process as much as possible, I would advise notifying both ministries that you have started the processes in parallel. That way, they will begin exchanging the necessary data between themselves, and you will simply need to send them some additional information.
Another interesting thing is the certificate of non-bankruptcy. By and large, it is simply a notarised promise that you have never gone through this procedure. Luxembourg is strict about this because if you have gone bankrupt once, you cannot become an entrepreneur again. This has caused a lot of controversy, and it seems that they are going to review this law. But for now, the rules are still in force.
Not only bankruptcy in the Grand Duchy is taken into account, but also in any country where you have ever lived.
The next tricky point is the amount of money required in a single account. You need around €20,000, which is £1,300,000. To be honest, I was a full-fledged millionaire for only 10 minutes, having deposited all the money I had into a single bank. We went to the branch with one of our family friends: he added funds so that in case of problems with the exchange rate, the amount would still be higher than necessary. I was given a statement from the account, after which I put all the money back into my accounts, and the nice round sum with zeros was gone.
This reference proved sufficient. Even the fact that it was in roubles at the Russian Raiffeisen Bank did not stop them. They looked at it, said, "Yes, it's there," and sent the documents on. The commission reviewed my documents and issued a temporary residence permit.
I went with him to apply for a D visa. There was a funny moment here too: I had to register myself as my employer.
To be a little crazy
When I first moved to Luxembourg, I had absolutely no contacts. Just one number for someone from LuxInnovations whom I had met while still in France.
I arrived at LuxInnovations and felt like a real start-up entrepreneur! They gave me a huge meeting room, brought me coffee, and two people came to listen to my pitch, approve it, and evaluate the idea. Before that, people mostly communicated with me via video chat and didn't really want to use English, but at Belval, I felt the difference.
However, the problem was that I was not part of the local ecosystem, i.e. I did not belong to any incubator or accelerator. Essentially, this is an ecosystem for growing a business, which trains you and guides you in the early stages. By the way, you wrote about one of them in an interview with Alexey Pospekhov.
"Okay," I said. "Give me three names of incubators where you would like to see us." They named Technoport, Luxembourg City Incubator and Le Village by CA, almost twirling their fingers at their temples, explaining that the whole process takes about four months. Of course, I scheduled a meeting in two weeks.
The thing is, I knew that the big annual ICT Spring start-up conference was about to take place. There, at a networking session, I personally met the managers of Luxembourg City Incubator. I told them about my idea, exchanged contact details, clinked glasses, and a week later I was pitching my project at their office. They gave me a unique opportunity. There were 500 startups competing for the right to present, four were selected, and mine was the fifth to sneak in without going through any of the competitions.
The director of the incubator supported us in obtaining business permits and residence permits. Without personal networking, everything is very long and complicated. When you know six out of ten chairmen of a conditional commission, and they know you, it's a completely different story.
Imagine the faces of those people at LuxInnovations when I came to them two weeks later with the incubator on my shoulders.
This entire ecosystem, by the way, is very impressive. They do not compete with each other for projects or privileges. Quite the opposite, in fact.
If you come to an incubator that does not specialise in your field, for example, you have a social project, but you go to the techies, they will direct you to the right place and even briefly tell their colleagues what you are offering to save time. This is incredibly gratifying.
Well, based on my observations, I would say that in Luxembourg, you need to be a little crazy. If you follow all the rules, arrive on time and only talk to people you have been personally introduced to, you won't get very far.
Conversely, if you constantly seek new connections, bypass certain attitudes (within reason), and surprise people, in a word, you can achieve a lot. And most importantly, you can achieve it faster!