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Investors choose to set up a SARL company in Luxembourg because of the easy setup procedure and its characteristics which can suit multiple types of business activities. The limited liability company (SARL – société á responsabilité limitée) is the most used company type in the country. The SARL can be formed by natural or legal persons and there are a few steps the investors need to take in order to incorporate the company and comply with all the commercial and business requirements in the country. The limited liability company is the most suited type of business for average size companies.
Our company registration agents in Luxembourg also provide you complete information about the other types of companies available in Luxembourg, if you require a different kind of business structure. For company formation in Luxembourg, don't hesitate to contact us.
A business permit is needed when opening a SARL in Luxembourg. This document is issued by the Ministry of Economy and serves to the incorporation with the Trade Register in Luxembourg.
What are the main requirements for a Luxembourg limited liability company in 2023?
The main condition for forming a limited liability company in Luxembourg is to provide a minimum share capital of approximately EUR 12,500. This amount must be fully subscribed and fully paid up at the time of the incorporation. Contributions to the capital can be made both in cash and in-kind and they are divided into shares. The minimum share value must not be lower than 24.79 EUR. The following requirements are also linked to the registration of a SARL in Luxembourg in 2023:
•the limited liability company has restrictions regarding the transfer of shares; they are not freely transferable and can only be transferred after a decision made within a company general meeting. Any share transfer must be recorded in a deed;
•the shareholders are liable only to the extent of the contributions made to the share capital;
•a SARL in Luxembourg can have between two and 40 shareholders;
•the company management principles for this type of company require that a business manager and company director are appointed;
•the articles of association can contain rules for the organization of general meetings within the company.
If you want to open a bank account in Luxembourg, we can offer assistance. Companies in Luxembourg must pay corporate income tax and other taxes such as the property tax, the net wealth tax or the business tax. Business owners must also register their companies for VAT purposes. Our company formation agents in Luxembourg can help you comply with the requirements for accounting and financial records submissions. Limited liability companies in Luxembourg with more than 25 shareholders are subject to mandatory supervision by one or more auditors. Our agents can provide you with accounting services for your company.
The company incorporation procedure in Luxembourg
Regardless of its type, any legal entity in Luxembourg must be registered with the Trade and Companies Register. Before preparing the registration documents for the new business, investors must check the availability of their desired business name. This can be done online by submitting a request to the Trade and Companies Register. Our company formation agents in Luxembourg can help you open a bank account for the company and deposit the minimum share capital. We can also help you during the following company incorporation steps when you are required to draw up the articles of association and other documents.
Our agents offer you legal assistance in opening limited liability companies and other types of firms also in other European countries, such as Spain, Poland, Italy, and Singapore. If you need accounting services in European countries, like Romania, you may also contact us.
EUR 1 is the share capital contribution for a SARL-S in Luxembourg (the simplified business structure)which represents a great business advantage. One must consider the administrative and authorization costs, if any.
We invite you to watch a short video about how youcan open a SARL in Luxembourg:
Key points of a SARL in Luxembourg in 2023
Among the main points of a SARL in Luxembourg, the preferred business entity in this state by foreign investors, we mention that the incorporation time is approximately 7 days, one shareholder and one director are necessary, complete privacy is provided, and there is no need for a general meeting of the stockholders, if they are beyond 25 to form the SARL in Luxembourg.
Have you decided on your preferred business structure in Luxembourg? The advice is to use the services offered by our accounting firm in Luxembourg. Our specialists can help you with tax advice and compliance, audits, bookkeeping, payroll, and preparation of annual financial statements, among others. Registration for the payment of taxes also comes under the attention of our experts, so do not hesitate to contact us and benefit from personalized offers.
What are the accounting requirements for a SARL in Luxembourg?
The balance sheets, the management reports, and the financial statements are among the accounting requirements for limited liability companies in Luxembourg. One should know that a SARL formed by 60 stockholders needs to be supervised by at least one auditor, as stipulated by the Articles of Association, the main documents of the company. We also mention that our team of advisors can provide you with more details about the accounting services we can offer.
It is recommended to make a name verification before registering a SARL in Luxembourg. This way you can make sure that you can properly incorporate and develop your business in this country, without possible infringements.
The liability in a SARL
At least two partners and no more than 100 legal persons can form a SARL in Luxembourg or a limited liability company as it is known. In this structure, the partners are entirely liable to the amount of contribution to the minimum share capital of the SARL. In the case of a capital increase, the founders and the directors are separately liable in front of third parties or partners for the part of the capital which is not fully subscribed. Also, they are responsible for the difference between the minimum share capital and the money provided by third parties in the firm.
In a SARL, the partners are also liable for entirely paying the stocks and the part of the capital for which they have contributed. It is good to know that the Memorandum of Association of a SARL can restrain the concept of company owners to the subscribers who own at least one-third of the share capital they have in common. We mention that the general meetings of shareholders of a SARL in Luxembourg will take place once per year in the case the company has more than 60 stockholders, as agreed by the Articles of Association in this matter. Moreover, there are no legal procedures regarding the general meetings, however, these need to be respected by all shareholders of the SARL in Luxembourg.
The management of a SARL in Luxembourg
A SARL in Luxembourg is controlled by a board of managers appointed by the shareholders and mentioned by the Articles of Association. In the case the directors are appointed after the SARL is created, an additional act will be provided. As for the activities of managers in a SARL, these are related to the daily operations except the once involving the partners who created the company.
We remind that the Articles of Association, the company’s main documents stipulate all the responsibilities of both partners and managers of a SARL. One or more managers or agents can perform the company’s operations alone or together, as long as they respect the business direction.
Our company formation specialists in Luxembourg are at your disposal if you need a representative agent for your SARL. It is good to know, that according to the Company Act in Luxembourg, the managers can be legal persons in charge of the company management of a SARL, regardless of their nationality. In the case of bad management or incompetence, the board of directors or the managers can be dismissed.
What is a SARL-S in Luxembourg?
SARL-S is the simplified limited liability company which is registered under different rules and regulations compared to a traditional SARL. This kind of entity is directed to specific investors and entrepreneurs, mostly young business persons, for which the minimum share capital is set at EUR 1. A private deed can stand at the base of forming a SARL-S without having to notarize such document. Natural persons can easily establish a SARL-S in Luxembourg who can immediately start their business projects for which they do not need to invest a large sum of money. Foreigners who decide on registering a SARL-S in Luxembourgmust obtain a business permit which is issued by the Ministry of Economy in Luxembourg.
The Articles of Association remain the company’s important documents beside the private deed. Just like in the case of a SARL, the simplified limited liability company can be registered for a specific period of time or for an unlimited period and then directed to family members or other partners, if it is mentioned by the company’s documents. Among the conditions for opening a SARL-S in Luxembourg, an annual reserve of 5% of the net profits is imposed. This kind of reserve is considered to supply the minimum share capital until it reaches EUR 12,000 for a traditional SARL.
The management of a SARL-S
At least one natural person will be in charge of company management, whether as a business partner or not. The Articles of Association of a SARL-S comprise information about the board of managers, their responsibilities in the company and details about the annual general meeting. As it is known, the managers will perform varied of activities in the company, as long as they respect the purposes and the objectives of the firm, as established by the owners. SARL-S is a common business structure chosen for the ease of doing business of entrepreneurs who want to act as craftsmen, manufacturers, professionals or traders. You may get in touch with our team of company incorporation representatives in Luxembourg and find out more details about how you can establish a SARL-S in Luxembourg in a fast and consistent way.
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.