Setting up a company in Luxembourg

Setting up a company in Luxembourg costs €5500 + VAT.

Why start a business in Luxembourg?

Luxembourg is a European country with an excellent geographical location, political and social stability and a range of incentives for foreign business. Setting up a business in Luxembourg attracts an increasing number of investors from different countries, as Luxembourg’s economic policy is active and conducive to international business.

Luxembourg is a member of the OECD (Organisation for Economic Co-operation and Development) white list, which proves the transparency and integrity of its jurisdiction. Luxembourg is currently home to influential individuals and families, multinational groups and private equity funds.

When setting up a company in Luxembourg, it is also important to know that the founder must provide proof of his professional qualifications. The extent and nature of this may vary depending on the business you are planning. This could be, for example, a relevant degree, diploma or certificate of course completion. Work experience is also important: at least 3 years of relevant work experience in a European Union country.

There are many different legal forms in Luxembourg, so our staff can help you find and choose the one that best suits your needs. These are usually a sole trader, a limited liability company SARL (equivalent to an Estonian LLC) and a simplified company SARL-S. SARL-S is a company with limited liability.

– Sole proprietorship is a form of business where you finance your own business and invest your personal assets. You also make all business decisions alone and have full responsibility to third parties.

– The legal form of a SARL is a strict separation of your assets and those of the business. This means that you are only liable for the debts of the company up to the amount of your contribution. The SARL has a share capital of €12 500.

How is a company set up in Luxembourg?

Registering a company in Luxembourg is more convenient than ever – once chosen, we offer our services to clients remotely, with professionals sending all the documents. The registration itself usually takes 4-5 weeks.

The prospective entrepreneur will receive a questionnaire and a list of documents to fill in. We will liaise with the notary and, if necessary, ask you for further details.

The minimum share capital is at least €1 (for SARL-S type companies), but it is recommended to deposit at least €100-1000.

As of January 2017, a new form of company, the SARL-S, was created in Luxembourg. SARL-S is similar to SARL but differs in the amount of registered capital: only €1 is required instead of €12 500. This type of company can be set up with a private deed, so there is no need to consult a notary. This reduces costs and speeds up the incorporation process in Luxembourg. However, it is worth noting that a notary must be consulted as the new company must be registered with the Luxembourg Trade and Companies Register (RCS). This type of company is particularly suited to entrepreneurs wishing to start or experiment with a business that does not require a large initial capital. It is also favourable for those looking for a simple business model.

Setting up a company in Luxembourg involves several types of taxes:

15

VAT is 15% if income does not exceed €175,000 and 17% if income exceeds €200,000.

7

Companies also have to pay an additional solidarity tax of 7%

15

Dividends are generally taxed at 15%, but can be taxed at 0% if certain criteria are met.

In Luxembourg, a start-up entrepreneur must obtain an authorisation (autorisation d'établissement) from the Ministry of Economy before starting any commercial, craft, industrial or similar activity. This requires certain conditions to be met. The new company must have a permanent physical establishment with the administrative and technical facilities necessary for its activities. Other obligations are linked to the holder of this certificate. The person must comply with the conditions of professional integrity to ensure the protection of future partners and clients. The Ministry assesses professional integrity on the basis of the following documents: the criminal record of the partner(s) and a sworn statement indicating all the posts held during a specified period.

Advantages:

The prospects offered by Luxembourg for developing and successfully implementing your business ideas can be a great reason to start a business in the country. Surrounded by other major European Union countries, in a friendly economic climate and in the harmony of favourable international policies, doing business in Luxembourg can yield unexpectedly good results.

Good to know:

If you plan to hire workers, you must be a member of the Social Insurance Centre, either as a self-employed person or as an employer.To pay income tax, you must register with the Luxembourg tax office, and to pay VAT you must register with the customs, real estate and VAT offices.

LCPC aims to provide you and your business with high quality assistance. Setting up a company is one of the first steps in building your business, and we will help you along the way!

Looking for an advisor?

Make an appointment