Labour Migration in times of labour shortages in Luxembourg (January 2021 to June 2024)

This EMN study examines how Luxembourg addresses labour shortages with a specific focus on labour migration, offering insights into developments, challenges, and good practices. Luxembourg has chosen to approach the issue of labour and skill shortages in several ways, one of them being labour migration. It has recently amended several laws, which facilitate the hiring of third-country nationals, for example by means of an annually updated list of professions that are in high demand and in very short supply. In addition, the Luxembourgish Government has initiated several initiatives and measures to tackle labour and skill shortages, such as the very recently established the High Committee for the Attraction, Retention and Development of Talent, which is chaired by the Minister for Economic Affairs. Luxembourg continuously updates its impatriate tax regime (latest version entered into force on 1 January 2025), it has signed an agreement on management of migration flows and solidary development with Cabo Verde (2015) and offers five legal entry pathways allow foreign workers to come to and work in Luxembourg. The Luxembourgish Government has also implemented polices and other measures to positively impact the retention of foreign talent, for example the validity of the residence permit for personal reasons for the search of an employment or the creation of a business from 9 to 12 months has been extended and the number of public international schools is continuously increasing.
However, (the retention of) foreign talent in Luxembourg faces also challenges. Foreign workers might have trouble with finding affordable housing, struggling with the high demand for public international schools, or with language issues in the trilingual country.