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The Minimum Capital for Opening a Company in Luxembourg

Updated on Thursday 26th August 2021

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The-minimum-capital-for-opening-a-company-in-LuxembourgForeign investors come to Luxembourg because of the numerous types of companies they can establish and because the Grand Duchy offers a friendly taxation system. Company registration in Luxembourg is possible through the Commercial Code which provides for all types of structures that can be incorporated, including the requirements for setting them up. Before starting the company formation process, one must know that a company must have a specific number of shareholders, at least one manager or director and a start-up capital. Our company formation agents in Luxembourg can offer detailed information about each type of company.
 

The share capital of Luxembourg companies

 

One of the most important aspects of registering a company in Luxembourg is the share capital which must be deposited when setting up the business. The share capital represents the contributions of the shareholder and can take the form of money or assets. Once issued, the capital will be divided into shares.
The following types of companies are required to have a minimum share capital in Luxembourg:
 
  • -          the private limited liability company (SARL);
  • -          the public limited liability company (SA).
 
The minimum share capital required to register a SARL company in Luxembourg is approximately EUR 12,000 and the whole amount must be paid upon incorporation. The share capital required to set up a SA company is approximately EUR 31,000 out of which 25% must be paid when registering the company. The share capital must be deposited in the company’s bank account.
 

Share capital requirements for partnerships in Luxembourg

 

There are four types of partnerships one can establish in Luxembourg:
 
  • -          general partnership;
  • -          limited corporate partnership;
  • -          special limited partnership;
  • -          corporate partnership limited by shares.
 
While the first three types of partnerships are not subject to share capital requirements, the partnership limited by shares must have a start-up capital of EUR 31,000. It must be noted that a company or a partnership’s share capital can be altered under the provisions of the Company Act.
 

What is the minimum share capital for subsidiaries in Luxembourg?

 
The private limited liability can be the proper business structure for establishing a subsidiary in Luxembourg, with a minimum share capital of EUR 12,000.  As for a public limited liability under which your subsidiary will activate, the minimum share capital is set at EUR 31,000. Besides that, a subsidiary is subject to different costs compared to a branch, for example. Costs for a big business office, a number of employees, taxes, social contributions and many more should be in the attention of foreign investors looking to establish their business presence in Luxembourg through subsidiaries. Feel free to talk to our team of company formation specialists in Luxembourg and find out more details about the minimum share capital for companies in this country.
 

What is the minimum share capital for a SICAF in Luxembourg?

 
A SICAF can run under the rules of private companies, partnerships or public limited companies with authorized capital increased only by the stockholders.  EUR 300,000 represents the minimum share capital for establishing a SICAF in Luxembourg, mentioning that in approximately 6 months, the capital must reach around EUR 1,250,000. Among the requirements for opening a SICAF, one of the most common investment companies in Luxembourg we mention the following:
 
  1. A development plan and the Articles of Incorporation need to be prepared.
  2. Information about the sponsors, the management schemes and shares are mandatory.
  3. A SICAF needs to be registered for tax purposes in Luxembourg.
  4. All the documents need to be notarized before submission.
 
SICAF is a special investment structure which can be managed by a company or by itself. Let our team of consultants tell you more about how to create a SICAF and about the minimum share capital involved.
 

Opening a FIAR in Luxembourg

 
FIAR is the Reserved Alternative Investment Fund which can be registered with the Chamber of Commerce in Luxembourg for a minimum investment of EUR 125,000. As the name says, FIAR is another investment alternative for international players in Luxembourg for which an investment fund manager is needed. In terms of taxation, a FIAR is protected by the double taxation agreements signed by Luxembourg with countries worldwide.
 

Do I need capital for opening an insurance company in Luxembourg?

 
Yes, if you would like to open an insurance company in Luxembourg you can choose the limited liability company which can be established with a minimum share capital of EUR 12,000. At least two shareholders are needed for opening a limited liability company through which an insurance company is incorporated. Even though there are no harsh requirements for opening an insurance company in Luxembourg, it is though recommended to solicit the support of a company formation agent in Luxembourg
 

Undertakings for collective investments in Luxembourg

 
UCI or the Undertakings for Collective Investment is the type of investment fund established in 2010 and supervised by the Financial Regulator in Luxembourg. This is an investment vehicle meant for a big number of investors for which a solid financial plan is needed. UCI can be established with a minimum share capital of EUR 300,000. This is the minimum investment amount which is needed for establishing an UCI in Luxembourg. Such type of fund can have more than just one manager and can also be authorized in foreign countries too. An important thing to consider is that the invested capital needs to increase up to EUR 1,250,000 in approximately 6 months.
 

Reasons to make investments in Luxembourg

 
Luxembourg is a prolific financial center that offers numerous business opportunities plus a solid and appreciated climate. International players can benefit from a great tax structure, a well-developed infrastructure, a stable economy and an experienced workforce. The registration procedure of a company in Luxembourg is quite easy compared to other countries, and among the reason of doing business in Luxembourg. There are varied investment tools a foreign business can choose, depending on the strategies and business direction involved, plus the amount of capital he or she wants to invest. The financial sector is definitely the most productive one and the field in which most of the entrepreneurs decide to do business in. It is important to have an idea about the necessary licenses and permits for doing business in Luxembourg, therefore, we recommend you to talk to our specialists and find out detailed information in this matter.
 
Here are some data and statistical figures that outline the business direction of Luxembourg:
 
  1. Luxembourg recorded approximately USD 128,500 in total FDI in 2019.
  2. According to the 2020 Doing Business report, Luxembourg ranked 72nd out of 190 world economies in terms of simple business formalities.
  3. Bermuda is the largest investor in Luxembourg, along with Ireland, the UK, and the Netherlands.
  4. Most investments in Luxembourg are absorbed by the financial and insurance sector, the most prolific in the country.
  5. Luxembourg is the major investor for European Union’s countries, according to statistics.
 

Frequently Asked Questions

 
Our specialists often receive questions about the minimum capital required to set up a company in Luxembourg. The following answers should clarify this direction, but in order to better understand the business climate in Luxembourg, please contact our team of specialists.
 
1. What is the minimum share capital for SARL in Luxembourg?
A SARL registered in Luxembourg requires a minimum share capital of EUR 12,000. This sum must be deposited in a local bank account in Luxembourg.
 
2. How much is the minimum share capital for SA in Luxembourg?
EUR 31,000 represents the minimum share capital for a SA (public limited company) in Luxembourg. More about this form can be discussed with our company formation agents in Luxembourg.
 
3. What is the start-up capital for a partnership in Luxembourg?
General and limited partnerships in Luxembourg can be established with a start-up capital of EUR 31,000. The same minimum share capital is needed for a special limited partnership in Luxembourg.
 
4. What are the capital requirements for a subsidiary in Luxembourg?
A subsidiary can be easily established in Luxembourg. As soon as you open a bank account, a minimum share capital of EUR 31,000 must be deposited. More on this topic can be discussed with one of our company formation agents in Luxembourg.
 
5. Are there any other costs implicated in opening a company in Luxembourg?
Yes, besides the minimum share capital for a company in Luxembourg, businessmen must observe other costs too. The expenses for office, employees, social contributions, and other taxes are a few of those costs.
 
6. What are the requirements for a SICAF in Luxembourg?
A SICAF in Luxembourg can be registered with a minimum share capital of EUR 300,000. This kind of entity can be a public limited company or a partnership.
 
7. How can I register a FIAR in Luxembourg?
Reserved Alternative Investment Fund is also named FIAR in Luxembourg and it can be established with a minimum share capital of EUR 125,000. You can discuss all the details with one of our company formation agents in Luxembourg and see how you can be helped.
 
8. Is there a minimum share capital required for Undertakings for Collective Investment or UCI in Luxembourg?
Yes, UCIs can be established with EUR 300,000 as minimum share capital. This kind of investment vehicle is preferred among international players.
 
9. Is it mandatory to have a bank account in Luxembourg for company minimum capital?
A bank account in Luxembourg is needed for establishing a business in this country. One can also use other accounts if the legislation allows so under certain circumstances.
 
10. Are multiple currency transactions permitted in Luxembourg?
Yes, a business can have operations in varied currencies, yet, the minimum share capital must be deposited in local currency in Luxembourg, which is Euro. If you want to know more about the business in Luxembourg and the formalities implicated, feel free to discuss with our agents.
 

Why work with our agents in Luxembourg

 
If Luxembourg is your next investment destination, then you can rely on the services of our local agents. We can help both local and foreign businessmen to register their business in Luxembourg. The incorporation of companies, obtaining special licenses and permits, registration for the payment of taxes are some aspects that we deal with in a professional manner. What is important to know is that our agents take care of everything related to registering a business, so that customers can continue to deal with the investments they want to make in the future. We rely on professionalism and efficiency when collaborating with our clients.
 
For assistance in setting up any of the types of companies above, do not hesitate to contact our company incorporation representatives in Luxembourg.
 
 

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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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