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Setting up a Trading Company in Luxembourg

Updated on Wednesday 22nd April 2020

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Setting up a trading company in Luxembourg is very much alike with the procedure of opening a holding company, as both forms have many aspects in common. However, there are some particularities that create differences between these two forms, for example a holding company in Luxembourg has the main purpose of controlling other companies by achieving shares in those companies, rather than perform any commercial activities. However, a limited liability company or SARL remains the proper option for opening an import and export company in Luxembourg, under specific regulations that can be explained by one of our company formation agents in Luxembourg.

 

Management of a trading company in Luxembourg

 

When setting up a trading company in Luxembourg, there must be taken in consideration that the system of management is based on the decision taken in the general meeting of shareholders, as also available for a holding company or SARL. They are entitled to approve, to draw up or ratify acts or decision in the company's name and concerning the company itself. Moreover, when setting up an import and export company in Luxembourg, the Articles of Association, the main documents of the firm, will have to comprise information about the owners, activities, business place, name and nationality, date of incorporation, general rules and many more. Here are other important regulations to consider at the time you want to open a company in Luxembourg:
 
  • a trading company in Luxembourg is administered by a board of at least 3 directors;
  • an entrepreneur willing to set up a trading company in Luxembourg needs to know that the company board can be maintained for maximum six years;
  • even though the company board has a six years mandate, it can be elected again, in the same consistence or by individual.
  • the law also provides that an auditor must be appointed to check the financial status of the firm. 

 

Is it hard to open a SARL for my trading company?

 
No, SARL can represent the proper business structure for your import & export company in Luxembourg. This kind of structure can be chosen by both local and foreign entrepreneurs who want to open trading companies in Luxembourg. Here are some important conditions to respect when opening a SARL in Luxembourg:
 
  • EUR 12,500 is the minimum share capital for opening a SARL in Luxembourg;
  • the Articles of Association stand at the base of SARL formation and incorporation;
  • 40 is the limit of the shareholders of a SARL in Luxembourg;
  • opening a bank account and registering for tax purposes, especially for VAT are mandatory conditions.
 
The registration of a trading company in Luxembourg is not complicated, however, it is required to have the support of a team of agents specialized in company formation in Luxembourg. This way, you can skip formalities involved and let us handle the entire procedure with the entitled registration authorities in Luxembourg.
 

Do I need an EORI number?

 
Yes, import and export companies in Luxembourg must obtain the EORI number before starting the activities on the market. This is the Economic Operator Registration and Identification code used for customs formalities and for a better verification of trading companies and their activities within the European territory. The EORI number is formed of the VAT number, the country’s initials (LU), plus other digits. This code has been introduced in 2009 as an EU directive for both EU and non-EU trading companies, with clear implications and regulations, in order to correctly identify import and export companies. In the case of trading companies in Luxembourg, the application for EORI is quite simple and it is made with the Customs and Excise Agency, helped by one of our company formation agents in Luxembourg who can act on behalf of your company in this country. The VAT certificate of the trading firm, the Certificate of Incorporation and the identification card of the applicant are among the needed documents for EORI application in Luxembourg. It is important to note that the EORI number can be issued in a couple of days from the date the application is made, so you should pay attention to this aspect before starting the import and export activities. One of our specialists will help you apply and obtain the EORI number by providing the necessary support and guidance.
 

Trading companies and customs requirements

 
Import and export companies in Luxembourg must observe a few important regulations when developing such activities. Besides presenting the EORI number, these will have to respect the regulations imposed by the Union Customs Code and prepare the SAD or the Single Administrative Document, alongside other declarations that must comprise information about the imported or exported products, the transit transportation, the temporary storage of goods and many more. If you would like to set up a trading company in Luxembourg and need to know more about the customs formalities, EORI number, and other related regulations, you should get in touch with one of our company formation agents in Luxembourg and find out complete details. 
 

Documents for import & export products

 
Importing/exporting products into/from Luxembourg is subject to a serious verification of documents by the customs authorities. The EORI number, the certificate that comprises information about the origin of products, the SAD, the VAT declaration, the invoices, and the special authorizations are among the documents you should prepare for verification. If you need support in this matter, do not hesitate to talk to us and let us help you.
 

Accounting requirements

 

Both SARL and holding companies in Luxembourg under which a trading company can activate must present the annual accounts to the shareholders. This documentation must be then submitted to the Registrar of the District Court which validates the deposit by filing a notice in the Grand Duchy of Luxembourg Gazette. A holding company in Luxembourg (SOPARFI) must also deposit a consolidated annual accounts when it is entitled by a majority of voting rights in another company or under an agreement with the other shareholders of the company. This provision is not required for a trading company in Luxembourg.

 

Taxation benefits for holding companies

 

An important advantage in front of the holding companies in Luxembourg (SOPARFI) consists in the exemption of certain taxes, or at least minimizing them, on the basis of several double tax treaties concluded between Luxembourg and other countries. In Luxembourg, the dividends distributed by a Luxembourg company are subject to withholding tax, but this tax rate of 15% can be exempted or reduced on the basis of double tax treaties, in accordance to certain rules applied for this type of company.
 

Investing in Luxembourg

 
Luxembourg is a powerful business and financial center appreciated on an international scale by a wide range of foreign investors who enjoy successful businesses and large profits. The financial sector is the most appealing field in Luxembourg, and home to numerous foreign investors who enjoy the business climate and the opportunities offered. Here are some facts and figures that highlight the economy and the business direction of the Grand Duchy:
 
  1. The 2020 Doing Business report issued by the World Bank ranks Luxembourg 72nd out of 190 worldwide economies;
  2. Luxembourg registered approximately USD 164,000 million in terms of FDI for 2018;
  3. The Netherlands, UK, and Ireland are the main foreign investors in the Grand Duchy;
  4. The banking sector is one of the most prolific in Luxembourg, with more than 155 listed in this country.

 

Our company formation agents in Luxembourg can provide you further information and support in setting up a trading company in Luxembourg and they can offer you services for company incorporation in Luxembourg. Please contact us for details and assistance.

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)278 617 15. Alternatively you can incorporate your company without traveling to Luxembourg.
 

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