Encouraged by the appealing economic policies of Luxembourg, the e-commerce is a sector that continues to develop at a fast pace, offering varied products and services online. The internet businesses in Luxembourg
are regulated by the Law on E-commerce issued on 14 August 2000 by the government. The main problem when starting an internet business in Luxembourg
consists in the taxation procedure, which may raise ambiguity, but with complete assistance and support offered by our company formation agents in Luxembourg
, entrepreneurs can easily start an online business in Luxembourg
Setting up an online business in Luxembourg
The criterion of the fixed place of a business is quite easy to be noticed in case of a permanent establishment for companies which have a traditional commercial or industrial activity. But the same criterion might look difficult to implement when it comes to characterize the presence of a permanent establishment for tax purposes of a company which carries on a business on the internet. However, an online shop must be firstly be registered as a limited liability company with a physical business address in Luxembourg.
Companies with activities online
Companies that operate commercial websites are those that sell products via the internet. In this case, these companies maintain an updated stock and, in any case, they have a central purchasing or logistics center, whose location will feature the presence of a permanent establishment for tax purposes, including for VAT
. Companies that operate service websites are those that offer facilities which can be viewed or downloaded via the internet in exchange of a fee or tax. Companies that offer such services may have a simple physical presence, since both the nature and the content of their activity are essentially digital. And often the most tangible element of these companies is the only computer server which is hosted on the website.
Different regulations related to accounting
The procedure of incorporating and registering an internet business in Luxembourg
is not different from the process involved for a regular company. However, there are still certain rulings that regulate the company's activity and taxation. In the accounting field, the law on e-commerce provides that, with the exception of the balance sheet and profit and loss account, the other accounting documents and information can be kept as a copy.
The internet businesses in Luxembourg are sustained by several projects implemented by the public authorities in order to facilitate on-line administration and offer a more transparent workframe. In this sense, the main important legislative acts in the field were issued in 2000, when Luxembourg became the first country that introduced the European directive on e-commerce and electronic signatures and adopted a law on e-commerce, in 2001 when Luxembourg adopted the law on electronic signatures, in 2002 when a law on protection of personal data was implemented and in 2003 when it was adopted a VAT Directive for e-commerce.
Moreover, Luxembourg is ranked as the 4th country in the world by the number of secure servers per million inhabitants. This is a relevant and important information for entrepreneurs willing to develop an internet business in Luxembourg.
How do I set up a SARL in Luxembourg?
is the limited liability company in Luxembourg that can be established for a minimum share capital of EUR 12,500 and at least two shareholders. The following information comprises a few steps for forming a SARL in Luxembourg
under which you can set up an internet business
- The Memorandum and the Articles of Incorporation are the main documents containing information about the owners, the activities, general rules, etc.
- One must appoint a representative for the newly formed company in Luxembourg.
- The SARL must have a bank account for future financial operations.
- The registration for tax purposes is needed if you intend to offer goods and services for sale on the internet.
The lack of difficulties for forming a SARL in Luxembourg attracts numerous investors willing to rapidly start their operations and activities in the country. The good thing is that they can also benefit from the support of an experienced team of company formation agents in Luxembourg oriented towards the client’s needs.
How can I open an online shop in Luxembourg?
An online shop
can run under the rules of a limited liability company in Luxembourg
. Once the entity is registered, the next thing to do is to purchase the unique domain name and register it with RESTENA
. This is an important authority in Luxembourg that is in charge of the legal domain names in the country. An online shop
must also respect a few important regulations:
- A merchant account is needed to offer the possibility of online payments in varied currencies.
- All products or services displayed on the website must be described alongside the prices involved.
- The GDPR set of regulations must be displayed at the disposal of clients right from the beginning.
- Information about guarantee and sale conditions needs to be indicated on the website.
The protection of online shopping is extremely important to entrepreneurs operating their activities online. They should pay attention to the necessary protection methods for payments and purchases on the internet and skip possible penalties that might arise for unwanted errors or mistakes. If you would like to know how to start an online business in Luxembourg
, you might want to talk to one of our company formation specialists in Luxembourg
Online business activities for foreigners
Luxembourg is an open market to numerous business activities whether established as physical companies or with operations online. The sale of electronics, home appliances, books, tools, instruments, food and beverages, cosmetics, textiles, jewelry, and many other products on the internet should respect the quality control general rules as established for such kind of activities by the EU directives and other regulations. Most of the products and services can be sold on the internet with the help of online businesses, so it is up to the entrepreneurs to establish their activities after a preliminary verification of the market in Luxembourg.
Is it hard to open an internet business in Luxembourg?
No, there is no need to worry about the complexity of opening an internet business in Luxembourg
, and that because the formalities are not difficult and more than that, the registration process of a company in Luxembourg
can be concluded in just a few days. The only thing that might prolong is the creation of the website and the display of the products meant for sale purposes on the internet. Let us handle the formalities for registering a company in Luxembourg
while you take care of other important aspects related to the online business
you want to open in this country.
Making investments in Luxembourg
Luxembourg is one of the solid and highly appreciated business destinations in the world and an important financial hub for a wide range of international entrepreneurs. The great tax system and infrastructure, the skilled and multilingual workforce, the multitude of safe investment tools and opportunities, the stable economy, plus the excellent geographic location highlight in large lines the business advantages offered by Luxembourg. You can find more interesting facts about Luxembourg below:
- • the 2019 Doing Business report places Luxembourg on the 66th position among 190 worldwide economies;
- • the total FDI stock registered in 2018 was of around USD 164,000 million;
- • the financial sector in Luxembourg is the most profitable and the destination of most of the foreign investments;
- • Luxembourg ranked 20th on the Global Competitiveness Index in 2017, as stated by the World Economic Forum.
Our company formation agents in Luxembourg
are able to provide full information and customized advice for starting an internet business
in this country, so feel free to contact us
at any time.