Articles
Set up Company in Luxembourg
Updated on Wednesday 08th May 2024 Company formation in Luxembourg is a straightforward process both for national and foreign investors with the help of our specialists. The procedure is simple and quick once you have all the required documents.
| Quick Facts | |
|---|---|
| Types of companies | Société anonyme Limited liability company Company ''en nom collectif'' Limited partnership Company limited by shares Cooperative society Cooperative society functioning as an SA |
| Minimum share capital for LTD Company | EUR 12,000 |
| Minimum number of shareholders for Limited Company | 1 |
| Time frame for the incorporation (approx.) | 3 weeks |
| Corporate tax rate | 17% |
| Dividend tax rate | 15% |
| VAT rate | 17%, a reduced rate of 8% also applies to certain goods |
| Number of double taxation treaties (approx.) | 82 |
| Do you supply a registered address? | Yes |
| Local director required | No |
| Annual meeting required | Yes |
| Redomiciliation permitted | Yes |
| Electronic signature | Yes |
| Is accounting/annual return required? | Yes |
| Foreign-ownership allowed | Yes |
| Any tax exemptions available? | 50% tax exemption for dividend incomes received from EU subsidiary |
| Tax incentives | Investment tax credits |
| Legal assistance | Hiring a counsel familiar with the Luxembourg laws is advisable. Our company formation agents can help you set up a company in Luxembourg. |
| Minimum share capital | Varies by company type: - EUR1 for simplified limited liability company (SARL-S); - EUR12,000 for private limited liability company (SARL); - EUR30,000 for partnership limited by shares (SCA); - EUR30,000 for public limited liability company (SA); - None for limited partnerships (SCS). |
| Registered office | Companies are required to have a physical office address in Luxembourg for legal purposes. |
| Shareholders | Requirements for number, residency, and nationality vary by company type. For instance, at least one shareholder is required for public limited liability company (SA) in Luxembourg. |
| Business permit | Businesses set up in Luxembourg are required to obtain governmental permits, including those for commercial, skilled craft, and industrial activities. |
| Corporate governance | Companies must adhere to governance regulations and reporting standards. |
| Banking requirements | Opening a bank account is part of the company setup process in Luxembourg. |
| Notary public involvement | Often required for drafting and notarizing company documents. |
| Employment regulations | Companies must comply with labor laws regarding hiring and employment. |
| Intellectual property protection | Protection is available through registration and legal agreements. |
| Annual reporting | Companies must file annual financial statements and reports. |
| Language of documentation | Official documents are typically in French, German, or Luxembourgish. |
| Anti-money laundering compliance | Companies must comply with AML regulations and due diligence procedures. |
| Residency requirements for directors | It is not necessary to have Luxembourg nationality to be appointed as a director, but for tax and substance considerations, it's often recommended to appoint a director who is a resident of Luxembourg. |
| Other services | We also provide services related to: - bank account opening; - acquisition of shelf companies; - accounting etc. |
Requirements for opening a company in Luxembourg
Any company incorporated in Luxembourg needs to have certain documents that will attest the registration of the legal entity in the Grand Duchy. The articles of association need to be drafted and the founding members must provide specimen signatures, passport copies, and other documents. Once these documents are drafted, they will need to be translated by a certified translator and then submitted to a public notary for authentication. The articles of association are later published in the Luxembourg Official Gazette.
The investors will also have to open a bank account in Luxembourg where the minimum share capital will be deposited. The name of the new company also has to be verified in order to comply with the requirements of the country. This verification can be made at the Trade Register and our experts can help you throughout these incipient phases. A Luxembourg company will also need an office from where it can perform its business activities. If you are a foreign investor in the country, our partner lawyers in Luxembourg can help you purchase a virtual office at a prestigious business address and help you with the company formation in Luxembourg process.
What types of companies are available in Luxembourg?
There are several types of companies that can be registered in Luxembourg and the most suitable type depends on the investor’s business purposes. While some types of companies are more suited for small and medium-sized businesses, others will favor large businesses or be suitable for those corporations that want to expand their activities in the Grand Duchy.
The following types of companies are for those interested in Luxembourg company formation:
- • the public limited liability company (S.A.);
- • the private limited liability company (S.á.r.l.);
- • the general partnership (S.e.N.C.);
- • the limited partnership (S.e.C.S.);
- • the partnership limited by shares (S.e.C.A.);
- • the co-operative company (S.C.)
The private limited liability company and the public limited liability company are two of the most popular business forms in Luxembourg. They require a specific minimum share capital and there are requirements regarding the managing and supervisory bodies of a public limited liability company.
A branch in Luxembourg is a good business option for a foreign company that wants to establish its presence on the market. The newly incorporated company will not be a legal entity in Luxembourg, instead, it will depend completely on the mother-company abroad.
Subsidiaries in Luxembourg are other type of companies preferred by foreign legal entities. Unlike the branch, these companies have legal personality and the foreign company is not liable for their actions. If you are interested in setting up a company in Luxembourg, our experts can help you from the earliest stages of company formation.
Together with our team of experts, you will be able to open a company in Luxembourg as quickly as possible and commence your business activities. We can also help you with other professional services like accounting services in Luxembourg.
How can I set up a SARL company in Luxembourg?
Foreign investors who want to open a limited liability company or SARL (société á responsabilité limitée) in Luxembourg, as it is known, need to provide the minimum share capital of EUR 12,000 in a bank account in the Grand Duchy. Also, they need to consider the following requirements for Luxembourg company formation:
- • the shares or a SARL in Luxembourg are not transferable without an agreement in this sense;
- • a SARL in Luxembourg can be set up by at least two shareholders and no more than 40;
- • the company needs to be registered for tax purposes in Luxembourg;
- • a name verification needs to be made with the Trade and Companies Register in Luxembourg.
For any information about how to set up a SARL in Luxembourg, our team of advisors is at your disposal at any time for company formation in Luxembourg.
Have you decided on establishing a company in Luxembourg? You will also have to consider the accounting legislation. That is why we recommend the services of our accountants in Luxembourg. Payroll, HR administration, bookkeeping, audits or preparation and submission of annual financial statements are among the most important accounting aspects that are necessary in a company.
How can I open a Luxembourg Fund?
Luxembourg is a well-known financial center where thousands of investment funds operate due to the business-friendly economic environment and the legislation that encourages such investments. Most of the investors choose the form of undertakings for collective investment in transferable securities (UCITS) for company formation in Luxembourg. In case you would like to set up an investment fund in Luxembourg, we recommend our partners - Fiduciaire-Luxembourg.com.
Our company formation agents can help you open any type of investment fund in Luxembourg and obtain all the necessary documents for operating it.
Shelf companies in Luxembourg
Sometimes, foreign investors are more interested in purchasing a ready-made company in Luxembourg instead of forming one from scratch. Among the reasons why this is a proper option for their future activities, we mention the registration procedure which is practically inexistent. This means that a ready-made company is registered with the authorities in charge, and the only thing left to do is to observe the requirements for the transfer of the ownership that can be done in just one day.
Shelf companies in Luxembourg are not subject to liabilities because they have no financial activities on the market. This is a solid advantage for foreign entrepreneurs in Luxembourg who want to apply for a bank loan in this country. However, it is best to talk to our consultants and find out information about the conditions for purchasing a ready-made company.
Accounting services in Luxembourg
Our team can offer accounting services for both national or international entrepreneurs in Luxembourg. Preparation of the inventory and journal register, VAT journals, submitting the annual financial statements, payroll services, tax advice and management, the monthly or quarterly payment obligations, personnel administration plus consultancy and management accounting are among the necessary accounting matters that a company in Luxembourg should receive. We can handle the above-mentioned accounting matters if you are interested in externalizing these services instead of opening an accounting department in your firm.
Virtual office services in Luxembourg
If you are a foreign investor who does not want to set up a company from scratch, you should know that the virtual office packages are at your disposal with a series of services. You can benefit from a prominent business address in Luxembourg and from a virtual office assistant who can handle the mail collection and forwarding via the email in respect with the conditions of the business owner.
A local fax and phone number are at the disposal of clients, plus a private number for personal matters in Luxembourg. Also, the voice messages can be forwarded on email and, if you request, we can collect the bank statements. You can also benefit from a meeting room for future meetings with potential partners or clients in Luxembourg. A virtual office in Luxembourg addresses to those who want to start a marketing verification before they actually register a business in Luxembourg.
Any company with employees needs payroll services in Luxembourg. These involve a series of formalities and procedures, with the help of which salaries can be distributed in the company. The documents already completed by the accountants reach the signature of the company's managers, after which the respective distribution will be made. But for complete details in this regard, we recommend that you get in touch with our specialists.
Can foreign companies register subsidiaries in Luxembourg?
Yes, companies from abroad are welcomed to establish subsidiaries in Luxembourg in compliance with the Company Law and the Commercial Code. A subsidiary runs under the rules of limited liability companies, but it can also be incorporated as a joint stock company for a minimum share capital of EUR 30,000.
Reasons to invest in Luxembourg
Luxembourg has managed to maintain its economic stability throughout the global economic and financial crisis. The country’s economy is based on many types of business activities that prove to be a successful blend for the well-being of the Duchy. Financial services, manufacturing, retail, e-commerce, communications, and logistics, as well as imports and exports, are some of the most important and successful business fields in Luxembourg.
Luxembourg’s favorable legal and tax regime are the main attractions for companies that want to base their headquarters in a highly accessible and connected European business hot spot. Foreign companies in Luxembourg benefit from even more advantages because of a large number of double tax treaties concluded by the Grand Duchy with numerous countries worldwide. These treaties help protect against the double taxation of the foreign-source income, so taxpayers do not have to worry about paying the same taxes in both countries.
Investors in Luxembourg will also be pleased to find that the country has a skilled and multilingual workforce. Also, a large percentage of the employees in Luxembourg are cross-border commuters, another proof that the small country is open to international investments and collaboration. Finally, the quality of life in Luxembourg is another key factor that attracts business owners and employees alike. Luxembourg may be one of the world’s smallest countries, but it is also one of the wealthiest.
Frequently asked questions
1. Can a foreigner open a company in Luxembourg?
Yes. Luxembourg welcomes foreign investments and entrepreneurs enjoy a series of advantages if choosing to invest in Luxembourg.
2. What are the types of companies that can be incorporated in Luxembourg?
The legal forms in Luxembourg are: the limited liability company, the joint stock company, the cooperative company, the partnership and the limited partnership or the sole proprietorship. They each have their own characteristics and are suited for different business goals.
3. Does the company need to have an office in Luxembourg?
Yes. The company incorporated in Luxembourg will need to have a registered office in the country.
4. What are the steps for company incorporation in Luxembourg?
The investor will have to choose a suitable business name, obtain approval for it and draw up the company documents such as the Articles of Association. After all the documents are in order (complete with notarized copied and/or translations if needed), they are submitted to the Trade and Companies Register.
5. What is the minimum share capital in Luxembourg?
The minimum share capital depends on the chosen type of company. For the limited liability company the capital requirements are minimum 12,000 EUR while for the joint stock company the capital requirements are of 30,000 EUR. Our company registration agents in Luxembourg can give you more details about the business start-up costs.
6. What are the requirements for opening a bank account in Luxembourg?
The bank account is required for companies because the minimum share capital is deposited upon incorporation. Banks will generally require the company’s articles of association or registration certificate as well as identification details for its founders.
7. Do you need special permits and licenses in Luxembourg?
Yes. Special permits and licenses are needed for some business activities such as imports and exports.
8. What are the taxes for companies in Luxembourg?
The corporate income tax is the main tax for companies and it has a value of 21% for income over 15,000 EUR and 20% for income below this value. Other taxes in Luxembourg include the real property tax, the stamp duty, the transfer tax, municipal business tax or social security contributions.
9. How fast can you start a new business in Luxembourg?
If all the documents are in order the company incorporation process will last approximately two weeks.
10. What are the reasons to invest in Luxembourg?
Luxembourg offers political and economic stability, a central location in Europe ideal for trade businesses, a friendly tax environment, skilled workforce and good infrastructure.
If you are looking for a team of experts for your financial matters you can get in touch with our accountants in Luxembourg and discover the services they can offer. Procedures involving payroll, bookkeeping, preparation of annual financial statements, audits, tax advice, and compliance enter the attention of our experts. Moreover, our team can provide different tax minimization options that suit best your business direction. Contact us now and benefit from a free case evaluation.
You can contact our representatives for company formation in Luxembourg if you have any additional questions.
Meet us in Luxembourg
Contact our specialists in company formation in Luxembourg, who have a large experience in finance and international business.
Set up an appointment with us at +352 671 533 922. Alternatively you can incorporate your company without traveling to Luxembourg.
Testimonials
As a BridgeWest partner for many years, CompanyFormationLuxembourg.com is for sure a great choice when wanting to start a business in this important financial hub. International entrepreneurs can rely on the professionalism of this team.
Vlad Cuc, Director of BridgeWest www.bridgewest.eu
Read more testimonialsVlad Cuc, Director of BridgeWest www.bridgewest.eu