"It is a real cultural asset to Luxembourg to have these people with us. Luxembourg would not be a developed economy that it is today if we did not have this contribution and this effort made by all immigrants," the grand duke said in an address to PACE.
He added that hard-working and 'dynamic' migrants had made a significant contribution to the country's development.
Europe is currently struggling with the largest migrant crisis since World War II, as hundreds of thousands of refugees flee conflict-torn Middle Eastern and North African countries, trying to enter wealthier EU states.
According to the European Commission, over 500,000 asylum seekers have entered the European Union this year alone.