Permanent residency

Dual citizenship in Luxembourg

If you have distant relatives in your direct ancestral line who were Luxembourgish nationals or could have claimed it by right, you might have the option of Luxembourg dual citizenship. In this article, we will take a look at the circumstances under which you can apply for Luxembourg nationality based on your family ties, the procedures involved, and other important details.

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While you may be eligible to apply for Luxembourg nationality, you may not always be able to hold it concurrently with your current nationality to attain dual citizenship. This depends on your original nationality, some allow for the accumulation of two or more nationalities, while others do not.

Optional citizenship in Luxembourg and its benefits

To further explore this topic, we will examine four essential points: understanding dual nationality, Luxembourg's stance on this matter, the benefits of dual nationality with Luxembourg, and the pathways to obtaining Luxembourgish citizenship.

What is dual nationality?

Does Luxembourg allow dual citizenship?

Benefits of Luxembourg dual citizenship

Luxembourgish nationality is highly sought after due to its significant advantages, such as the right to live and work in a country that offers a high standard of living and the freedom of movement within the European Union. Although these benefits can be attained with a residence permit, it's crucial to understand that nationality extends beyond mere residency and offers additional advantages.

Right to vote and participate in elections

Luxembourg citizens can participate in national, local, and European elections, unlike permanent residents who lack voting rights or eligibility for candidacy.

Protection against deportation

Citizenship provides a stronger safeguard against deportation compared to permanent residency, which may still be subject to deportation under certain circumstances.

Passport and access to social benefits

Luxembourg citizenship grants access to a broader array of social benefits, including eligibility for specific government positions and the acquisition of a Luxembourg passport facilitating visa-free travel to numerous countries. Conversely, permanent residents do not possess a Luxembourg passport and have restricted access to social benefits.

Sense of identity and belonging

Citizenship fosters a deeper sense of identity and belonging to the country, a sentiment that may hold significant personal importance, while permanent residency primarily signifies a legal status.

Passport

Benefits

Citizenship

Want to know more about the advantages of Luxembourg citizenship?

Read our article

How can you get a nationality in general?

There are various avenues to acquire Luxembourgish nationality, categorised into two main groups: automatic entitlement and voluntary acquisition.

By operation of law

By voluntary acquisition

In this article, we will focus on cases where Luxembourgish nationality can be obtained without undergoing a naturalisation process or meeting residency requirements. We'll explore the first avenue of automatic entitlement and one case of voluntary acquisition through the option declaration procedure.

Legal sources

For more information on the subject of dual nationality and how to acquire it, you can consult the law of October 23, 2008, on Legilux, the official journal of the Grand Duchy of Luxembourg, and by checking the page dedicated to this subject Guichet.lu.

Obtaining dual citizenship in Luxembourg — procedures in 2024

As we explored in the previous section, there are numerous possibilities for acquiring Luxembourgish citizenship. Here, we will focus on two access routes:

The first is acquisition through automatic entitlement, often referred to as Luxembourg dual citizenship by Article 7, as this article allows for Luxembourgish nationality based on family ties in the ascending line.
The second avenue we'll address is the first case among the 10 possible cases for obtaining Luxembourgish citizenship by option.

Citizenship

Luxembourg passport

Procedures

Find out more ways to obtain Luxembourg nationality

Conditions

Documents

Procedure

Luxembourgish citizenship by option

As mentioned in the preceding section, it's possible to obtain citizenship by option in 10 different cases. Here, we'll focus on the first case: having a parent or grandparent from Luxembourg.

Conditions

Documents

Procedure

Cost

Taxation of dual citizens in Luxembourg

When someone acquires Luxembourgish nationality as part of dual citizenship, there are several aspects of taxation to consider.

Tax residency

Acquiring Luxembourgish nationality may have implications for tax residence. You may be considered a tax resident in Luxembourg and subject to worldwide income taxes, depending on your specific situation, such as the amount of time spent in Luxembourg and the location of your income sources.

Income taxes

Luxembourg operates a complicated tax system that includes income taxes for both individuals and businesses. Luxembourg citizens are subject to income taxes in Luxembourg on their worldwide income, but there may be double taxation agreements with other countries to avoid double taxation.

Wealth and succession taxes

Luxembourg also levies wealth and succession taxes, which may apply to Luxembourgish citizens regardless of where their assets are located. It's important to understand how these laws can affect estate and succession planning.

International agreements

It's crucial to consider international double taxation agreements that Luxembourg may have with other countries. These agreements can affect how income and assets are taxed in both countries and may provide some protection against double taxation.

Obtaining Luxembourgish nationality has both positive and negative fiscal implications

Luxembourg operates on a progressive tax system, meaning individuals with higher incomes are subject to higher tax rates. This can be advantageous for dual citizens with moderate incomes, as they may benefit from lower tax rates compared to countries with flat tax systems.

Luxembourg has signed tax treaties with numerous countries to prevent double taxation and provide relief for dual citizens. These treaties typically outline rules for allocating taxation rights between the two countries, ensuring that individuals are not taxed twice on the same income.

Dual citizens may be eligible for various tax credits and deductions in Luxembourg, reducing their overall tax liability.

Luxembourg is known for its favorable wealth management options, including private banking services and investment funds. Dual citizens may benefit from these opportunities to optimize their financial assets and minimize tax burdens.

Dual citizens may be subject to taxes in two countries, resulting in a heavier tax burden.

Tax laws and international agreements can be complex to understand and comply with. Properly declaring taxes and meeting information requirements may require professional assistance, incurring additional expenses.

Dual nationality can introduce additional complications in estate and succession planning, especially if you have assets in multiple countries, which may require specialized advice and increase the complexity of your financial situation.

Tax laws may change over time in Luxembourg and other countries where you hold citizenship, affecting your tax situation and requiring adjustments to your financial planning.

Given the complexity of tax laws and international agreements, it's advisable to seek professional advice from an accountant or tax advisor experienced in international taxation and Luxembourgish tax laws to ensure compliance and optimize your personal tax situation.