A foreign investor who comes to Luxembourg and intends to set up a company must be aware of the possibilities he has. One of the most important things to know is the best suited type of company that fits the interests of the entrepreneur.
The most popular type chosen by foreign investors who want to set up company in Luxembourg is the limited liability company. No more than 40 shareholders can establish a SARL in Luxembourg if they provide a minimum share capital of 12,400 EUR. Founders are only liable to the extent of their contributions.
At least two members can form a joint stock company in Luxembourg if the business is rather large. It is necessary to provide an initial capital of at least 31,000 EUR. This capital is divided into shares. Shareholders have no restrictions regarding their residency. Besides, their liability is limited to the extent of their initial contribution to the company formation in Luxembourg. The joint stock company is regulated in everything that involves structure, organization and decision making by the Company Law in Luxembourg.
A partnership is usually formed by at least two partners who join into business activity. The same happens in order to form a general partnership in Luxembourg. General partnerships in Luxembourg are known as either SocieteCivile or Societe en Nom Collectif. The difference between the two types is the size of the business. The first one refers to professional partnerships, while the second one is dedicated to small legal entities. Partners are fully liable for the company’s obligations and at the same time they have the right to manage all matters concerning the company.
Just like a general partnership, a limited partnership in Luxembourg is created by two partners on the basis of a signed agreement. One partner has to be fully liable for the company’s obligations and one must have limited liability to the extent of the initial contribution. However, more partners can also set up a limited partnership in Luxembourg.