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Relocation Country Guide: LUXEMBOURG

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Relocation Country Guide: LUXEMBOURG Relocation Country Guide: LUXEMBOURG January 2018 Relocation and International Assignment Trends and Practices The Grand Duchy of Luxembourg, is a small, landlocked country sandwiched between Belgium, France and Germany. Luxembourg is working hard to be among the top five alternative destinations for potential moves linked to Brexit. In the past year, the government has invested in new local English-speaking schools, increased transportation, and refurbished new areas as alternatives to the locations currently popular with expatriates. Often voted in surveys as one of the world’s most desirable places to live, Luxembourg enjoys an excellent standard of living. Input from Cartus Global Supply Chain and our Destination Services Providers on the ground in Luxembourg points to several key areas of importance to the expatriate community: looking for a rental property, finding a school, transportation, language, cultural issues and climate. These areas are all addressed, with best practice recommendations, to help HR/mobility managers as they consider policies for their assignees. February 2018 Relocation Country Guide: LUXEMBOURG RENTAL MARKET The rental market in Luxembourg is a landlord’s market. Furnished apartments are low in availability, as are three- four bedroom unfurnished apartments, while one-two bedroom apartments are easier to source. One-two bedroom houses, whether terraced, semi-detached or free standing, are typically limited, while those with at least three bedrooms have greater availability. All houses in gated compounds are in short supply. For many years, demand has outstripped supply, therefore, decisions need to be made very fast and no rent concessions can be negotiated. While the demand for property over the past 12 months has increased, as you would expect, vacancy rates have decreased. Over the same period, rental prices have increased by 11 percent. Rental Rates and Charges The cost of accommodation varies greatly by location. Below is an outline of the average rental rates, per month: Apartment Rental rates House Rental rates 1 Bedroom EUR 950 – 2,100 1 Bedroom Rare 2 Bedroom EUR 1,050 – 3,000 2 Bedroom EUR 1,050 – 2,500 3 Bedroom EUR 1,900 – 3,300 3 Bedroom EUR 1,050 – 3,700 4 Bedroom Rare 4 Bedroom EUR 1,050 – 4,200 Since the market is competitive, landlords are very selective. Landlords often receive several applicants for the same rental unit and it is ultimately the landlord’s decision who he/she accepts. The selection process is not always based on objective factors and they are not required to provide a reason for declining an assignee’s rental application. Family profile, income, behaviour, etc. are all factors that could be considered by a landlord. Payslips will be very often requested as proof of means. CARTUS | RELOCATION COUNTRY GUIDE | LUXEMBOURG | FEBRUARY 2018 PAGE 2 OF 12 February 2018 Relocation Country Guide: LUXEMBOURG Negotiating with Landlords/Real Estate Agents TOP TIPS FOR SUCCESS Due to the lack of supply of properties, rental prices are typically non-negotiable. Security deposits are no longer protected by • Assignees are advised to be ready law and a landlord can ask for any amount (this is now part of the to make quick decisions and to be lease negotiation). Leases in Luxembourg are rarely modified, as willing to make concessions, i.e. be landlords do not tend to be flexible about making changes to flexible in their search criteria and their proposed terms. International assignees may offer higher accept that properties may not tick rent payments to strengthen their applications, and items such as all their boxes. gardening, cleaning and extra items may be negotiated. • Housing allowances need to be realistic vis-à-vis rental market Leases conditions. • Companies should encourage The two most popular property leases are: assignees to maximise their housing • Apartments: one to two years allowances to find a property that • Houses: two to three years best fits their search criteria. Repainting clause: This is a standard clause. When the tenant leaves the property within three years, the property will have to be repainted entirely. The tenant usually pays for this work and the landlord commissions it, however the landlord will typically insist that this is the tenant’s responsibility. Searching for a Home Listings: Most rentals are listed by real estate agencies, who each manage their own portfolio of properties. Although there is no multiple listings service for Luxembourg, the website https://www.athome.lu gives a good indication of value for money (representing 60% of what is available on the market). Viewing time: Most agents will not show properties on weekends, so house hunting is typically during weekdays until 17:00. CARTUS | RELOCATION COUNTRY GUIDE | LUXEMBOURG | FEBRUARY 2018 PAGE 3 OF 12 February 2018 Relocation Country Guide: LUXEMBOURG Required documents: Rental application requirements vary by landlord and agency, so the assignee should be prepared TOP TIPS FOR SUCCESS to provide: copy of passport, employment contract, payslips, • Due to limited availability, as soon bank account information, and family profile (number of adults, as the move to Luxembourg is children, and pets). confirmed, relocating families should make school search their number Pets and smokers: Many landlords will not accept smokers or one priority. prospective tenants with pets due to “Code of behaviour in the residence” which is accepted by all landlords, residents and the managing company, so ask prior to viewing if applicable. The table below shows the popular expatriate neighbourhoods: Name of Typical Typical Property Neighbourhood Location Residents Property Types Availability Budget Limpersberg Close to Luxembourg City Couples/Singles Apartments Low High end Belair Close to Luxembourg City Families/Couples Apartments/houses Low High end Kirchberg Close to Luxembourg City Couples/singles Apartments Low High end Bertrange Close to Luxembourg City Families Houses Moderate Moderate Luxembourg Station area In Luxembourg City All Apartments Moderate Moderate CARTUS | RELOCATION COUNTRY GUIDE | LUXEMBOURG | FEBRUARY 2018 PAGE 4 OF 12 February 2018 Relocation Country Guide: LUXEMBOURG SCHOOLING In the Grand Duchy, school attendance is compulsory between the ages of four and 16 years. International/English- speaking schools are very popular and availability might be an issue, especially for children with special needs or learning disorders. Local schools will teach in either German, French or Luxembourgish (a German-Moselle-Frankish dialect). Popular international schools include: • The European School — http://www.euroschool.lu • International School of Luxembourg — http://www.islux.lu • St. George’s International School — http://www.st-georges.lu • Lycée Michel Lucius — http://www.lml.lu • Over the Rainbow School — http://overtherainbow.lu/ • l’École Internationale de Differdange (state School) — http://portal.education.lu/eid • Lycée International School Michel Luciucs (state school) — http://www.lml.lu/ CARTUS | RELOCATION COUNTRY GUIDE | LUXEMBOURG | FEBRUARY 2018 PAGE 5 OF 12 February 2018 Relocation Country Guide: LUXEMBOURG TRANSPORTATION TOP TIPS FOR SUCCESS Luxembourg has an excellent transport infrastructure and benefits • If a relocating family selects a from its central position in northern Continental Europe. The remote area, a second car would capital boasts a good transportation network, though remote be extremely useful, particularly for areas are not so well served by school runs. public transport. • Assignees can buy combi tickets for either train or bus, and bus services Public Transportation are reduced at weekends. Public transport in Luxembourg is cheap and efficient, with buses • As many of the transportation and trains linking major towns and destinations sites are only in French or German, in Germany, France and Belgium. Most Luxembourgers, however, learning some key phrases is strongly prefer to drive. Within Luxembourg City, where recommended although there is most business is likely to take place, buses and taxis are available, an English-language interface for with various passes and discount schemes on offer for buses. timetables. Driving Nowhere in Luxembourg is more than an hour’s drive from the capital. Nevertheless, commuter traffic can be heavy, making this driving across the country in the rush hour unrealistic. CARTUS | RELOCATION COUNTRY GUIDE | LUXEMBOURG | FEBRUARY 2018 PAGE 6 OF 12 February 2018 Relocation Country Guide: LUXEMBOURG VISA AND IMMIGRATION EU/EEA and Swiss Citizens EU/EEA and Swiss citizens do not need a work permit or visa to work in Luxembourg. If they intend to stay for more than 90 days, they must declare their arrival at the Municipal Office (Commune) in their place of residence within eight days. Non-EU Citizens An employer in Luxembourg may not employ a non-EU citizen until they have advertised the position at the Luxembourg employment office. Non-EU citizens who have been offered a job must apply for a temporary residence certificate at the Ministry of Foreign Affairs before arrival in Luxembourg and will have to register once they arrive in the country. Processing time can take up to three months. Certain nationalities will also require a visa. Non-EU citizens may not be in the country while their immigration is granted. Non-EU citizens need to go through a medical check. In 2017, the Luxembourg government passed a law to streamline the immigration process for EU Blue Card holders and Intra-Company Transfer (ICT) permits. Challenges:
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