Company formation in Luxembourg includes some standard actions such as drafting the articles of association, specimen signature, passport copies and other special forms. When setting up a company in Luxembourg, it is mandatory to deal with public notary procedures and translation of documents. It is mandatory in some cases to have a registered office for company formation in Luxembourg, which our attorneys from Luxembourg can assist you with. Nevertheless, opening a bank account in Luxembourg and hiring a local accountant are recommended for all new companies setup in Luxembourg.
TYPES OF LUXEMBOURG ENTITIES
• The Private Limited Liability Company is popular form of business for small and medium investments and in which the liability of each member is limited to the contribution of each member. The maximum number of members is 40. A minimum share capital of 12,500 EUR must be provided and must be fully paid at the incorporation. It is also possible to make a contribution in assets to the share capital.
The capital is divided into shares which cannot be publicly traded. In order to sell their shares, the partners must notify the other members.
The major decisions are taken by the general meeting of the shareholders which will also appoint a director to deal with the daily decisions and company representation.
• A form of business designed for major investments is the Public Limited Liability Company which requires a minimum share capital of 31,000 EUR from which at least 7,500 euros must be paid at incorporation and the rest in a time which should not exceed five years.
The governing body of the public limited liability company is the Supervisory Board while the executive is constituted by the Management Board.
• The General Partnership is a form of business formed by equal partners united under the same name (usually the name of the general partners) and in which the liability of the members is unlimited. No minimum share capital is required for this business but in case of liquidation the personal assets of the members are not protected.
• A Limited Partnership is another form of entity where no minimum share capital is requested but as a major difference is that the partners can be general(with unlimited liabilities and power of management) and silent partners(with limited liabilities by their contribution to the capital and no managerial powers).
COMPANY INCORPORATION LUXEMBOURG
In the beginning, the investors must open a bank account and deposit the minimum share capital in it, operation which usually takes around one day. After receiving the certificate of deposit, the investor must check the name of the newly formed entity in the “Registre de commerce et des sociétés du Luxembourg”, authority which will issue a certificate of availability if available.
The company’s articles of association, drafted in Lëtzebuergesch, French or German or accompanied by a translation in this language must be signed by the shareholders and by a public notary. In the same time, the notary will make an initial payment for registration fees at the Registry and at the Commercial Register. The Articles of Association are published in the Official Gazette, within 2 months from registration.
The Commercial Register is providing an official registration number after receiving all the notarized documents. This number will be at the base for all the company’s identification numbers.
The Notary will issue a certificate attesting the fact that the new company is registered which is used in order to release the authorized capital.
Company formation in Luxembourg is completed after registration. When beginning the business activity, a company may need employees. Workforce in Luxembourg is well-trained and employers can find the best personnel through specialized websites and recruitment agencies. An employee in Luxembourg earns approximately 3,000 EUR per month as the average salary.
ECONOMY OVERVIEW IN LUXEMBOURG
Luxembourg is the most popular country for foreign companies in Europe. Economy in Luxembourg is characterized by stability. Many foreign companies come to set up in Luxembourg, due to the strong incentives and the security of this country. Actually, there are over 9,000 companies with foreign capital in Luxembourg.
The main foreign investors in Luxembourg are from the European Union, especially from Germany. Foreign companies also create a great number of jobs, mostly in the field of banking and insurance. The other main industries that Luxembourg focuses on are steel and chemicals. The government in Luxembourg established the Board of Economic Development in order to provide help for foreign investors who want to come and set up a company in Luxembourg.