A Blue Carpet for start-ups

“It is time for Europe to become a startup powerhouse. Our competitiveness and ultimately prosperity depend on it.”

These are the opening words of “The EU Startup and Scaleup Strategy”[1] announced by the European Commission on May 28. It is a message that neither Lex Delles and Gilles Roth, who presented a joint action plan for the development of start-ups, scale-ups and the broader ecosystem[2] in March, nor Franz Fayot, who stated in the foreword to the “From Seed to Scale”[3] report that “our economic fabric will be further strengthened by the dynamism of start‐ups and scale‐ups, which contribute to our objectives of sustainable economic development and trust.”, would deny.

To achieve this ambitious goal, the European Commission plans to roll out a Blue Carpet Initiative, for start-up talent, especially founders, following the introduction of the Blue Card for highly skilled non-European workers. Anticipating this initiative could strengthen Luxembourg’s competitive (and attractive) position as a start-up nation, at a time when attracting and retaining talent remains a crucial (and difficult) challenge for the country’s start-ups[4]. Where do things currently stand, and what did the plan announced three months ago actually contain? What more can be done for the Grand Duchy to roll out its own Blue Carpet for entrepreneurs?

First of all, one of the flagship measures of the Blue Carpet Initiative addresses a major gap in the Luxembourg ecosystem: the absence of a specific visa program for start-up founders, which exists in other EU member states such as Estonia and France [5]. This gap creates uncertainty for start-up founders coming from third countries, who are often treated like conventional self-employed workers[6]. The EU Visa Strategy, which will primarily target start-up founders but also highly skilled students, researchers, entrepreneurs, and skilled workers from third countries, is intended to encourage Luxembourg to establish such a visa at the national level.

The start-up visa would be one of the key assets of the Talent Desk planned in the Government’s action plan, which is expected to become the primary point of contact for advising and guiding foreign talent wishing to join a start-up or scale-up based in Luxembourg. This would be usefully complemented by close cooperation with the Multipurpose Legal Gateway Offices, a pilot project of the European Commission intended to serve as a one-stop shop for professionals in the ICT sector within key partner third countries.

The introduction of a favorable tax regime concerning stock option plans granted to start-up employees is one of the pillars of the Government’s recent announcements. Stock options are also central to the Blue Carpet Initiative, which involves the development of European benchmarks and potential directives to guide the future Luxembourg framework.

Finally, the most intriguing part of the Blue Carpet Initiative for Luxembourg is the aim to eliminate tax barriers for cross-border remote employees working for start-ups and scale-ups. This could represent a revolution, both for teleworking cross-border commuters and for employees residing in more distant regions of the EU. The importance of this issue for Luxembourg’s start-up ecosystem should encourage the country to be at the forefront of implementing such a scheme.

These actions are only part of the policies needed to improve the attraction of start-up founders and talent within the European Union and Luxembourg. They form part of a broader effort to foster the emergence of start-up founders, a key aspect of which is transforming talented engineers and researchers into successful entrepreneurs. The action plan announced by the Government last March thus appears more as a first step that will need to be updated quickly. After all, the agility and responsiveness required of start-up founders must also apply to policy makers.

[1]https://research-and-innovation.ec.europa.eu/strategy/strategy-research-and-innovation/jobs-and-economy/eu-startup-and-scaleup-strategy_en

[2] Lex Delles and Gilles Roth presented a shared 10-point action plan to support the growth of start-ups, scale-ups, and the ecosystem.

[3] “From Seed to Scale” – Roadmap for development of the start-up ecosystem in Luxembourg, Ministry of Economy, June 2023.

[4] Luxembourg Startup Ecosystem Assessment and Benchmarking, Startup Genome, Luxembourg Ministry of Economy, 2022.

[5] This gap is furthermore highlighted in the most recent European Commission report on Luxembourg. 2025 Country Report – Luxembourg, Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Luxembourg, European Commission.

[6]Once again Luxembourg Startup Ecosystem Assessment and Benchmarking, Startup Genome, Luxembourg Ministry of Economy, 2022.