Luxembourg's Employee Lifecycle: Separating Rumours From Facts For Post-Brexit Workers

"Now, this is not the end. This is not even the beginning of the end. But it is, perhaps, the end of the beginning!"

These Churchillian words may, depending on your political wind, chime with today's UK: if Brexit marked the first battle won towards a brand new Britain, then it was certainly a major leap—but, with tough negotiations set to begin with Europe shortly, it's far from the end. One obstacle that remains is business. London had become the beating heart of the EU, serving as a financial hub for investors, but now, one year after the Brexit vote, UK businesses are looking to relocate to the EU in order to preserve their access to the so-called single market. Amongst several candidates, Luxembourg has emerged on many shortlists as a new home, with many competitive advantages in the financial and political arenas.

One key question for businesses considering relocating to Luxembourg is people, as people constitute a key competitive differentiator. In this article, we will dive into recruitment issues and the main lifecycle of an employee working in Luxembourg, following a Q&A format. In the following weeks, look for more articles here on the KPMG Blog as we explore various people-related obstacles and opportunities for businesses journeying toward Luxembourg. We hope you'll see that the opportunities far outweigh the obstacles—after all, Luxembourg's motto is "Let's make it happen!"

Who is allowed to work in Luxembourg without a permit?

Non-EU citizens need a work permit to work in Luxembourg, whereas EU citizens enjoy freedom of movement within the bloc and therefore require no such permit.

As long as the UK is part of the EU, UK citizens are free to live and work in Luxembourg. After the UK exits the EU, however, that could change. We won't know the exact outlook before the upcoming negotiations, but currently there is talk about a "hard Brexit" and a "soft Brexit."

Hard Brexit: the UK gives up its full access to the EU single market and to the customs union. Citizens from the UK would be treated as any other third-country national needing a visa and work permit to live and work in Luxembourg. Soft Brexit: the relationship between the UK and the EU would remain close to the existing arrangements, along the lines of what exists with the EEA and with Switzerland. There are various shapes this could take. A soft Brexit would have the UK committing to the four freedoms of the EU, meaning that UK citizens could still work and live in...