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Establish a Branch in Luxembourg

Updated on Thursday 14th April 2016

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The branch is an extension of the foreign parent company. By choosing to establish a branch in Luxembourg, the foreign legal entity gains easy access to the Luxembourgish market and can start its business activities faster than if incorporating a local company. The branch will be totally dependent on the parent company and the latter will be liable for the branch’s debts in Luxembourg.
 
Establishing a branch in Luxembourg is a simple process if certain steps are followed and the documents are properly submitted. The whole process doesn’t take longer than a few weeks and in order to operate on the market, the branch will need to have a business permit and to be registered with Trade and Companies Registrar
 

The characteristics of a branch in Luxembourg

 
A few requirements are needed for opening a branch in Luxembourg: the branch must have its own premises in Luxembourg, distinct from the ones of the foreign company and it must have its own clients.
 
A minimum share capital for a branch opened in Luxembourg is not mandatory, however, the foreign company can decide to provide an initial capital to its branch. 
 
The branch office must disclose any necessary financial information about the foreign company to the Luxembourg Inland Revenue, even though some of the information might be confidential in the country of origin. The accounts of the parent company can be audited by the Luxembourg authorities anytime they request to do so.
 
The advantages of opening a branch in Luxembourg include lower incorporation costs and quicker incorporation time than for other types of companies. The branch will also have to observe lighter reporting and auditing requirements while doing business in Luxembourg. A disadvantage for the foreign company is that it is completely liable for the debts and obligations of its Luxembourg branch.
 
Foreign companies that want to have a separate identity on the Luxembourgish market can also open a subsidiary which is a completely distinct legal entity from its parent company.
 

The company incorporation process for a Luxembourg branch

 
Before commencing any business activities, the branch of a foreign company or any other type of company in Luxembourg must receive a business permit. The permit is obtained from the General Directorate for SMEs and Entrepreneurship after submitting specific documents such as those proving the qualification and integrity of the parent company, the articles of association of the company, a passport copy for the branch’s local representative, stamp duty payment proof.
 
The documents necessary for opening a branch in Luxembourg must be accompanied by the translation into French, German or English.
 
The permit is no longer valid if it’s not used for a period of two years, if the company is liquidated or if the company is bankrupted.
 
The following documents must be submitted at the same time as the application for the business permit at the Trade and Companies Register: the articles of association of the foreign company which act as proof that the foreign company exists, information about the authority that released the certificate of registration in the country of origin, the minute of the meeting where the decision of opening a branch was taken, the decision to appoint a branch representative, identification data for the representatives, the branch’s local address and others. 
 
As a result, a unique registration number is attached to the certificate of registration of the Luxembourg branch and the commercial activities may begin.
 
If you need information about establishing a branch in other European countries, such as Italy, Poland, Malaysia and Hungary, you may ask our agents.
 
We invite you to watch a video about opening a branch, helped by our agents in Luxembourg:

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