Registration of Business in Luxembourg
How to Register Business in Luxembourg
At the very centre of Europe a small duchy called Luxembourg is situated. This state is famous for its 1000-year-old culture, as well as for the fact that its territory has the largest number of investment funds and banks. Willingness to provide its citizens and foreign investors with convenient business opportunities has made it the world's largest financial centre.
Business in Luxembourg
Convenient location and presence of most EU institutions in this country creates favourable conditions for the conduct of business of any person concerned.
The following advantages, which are the mark of pride for business in Luxembourg, should be noted:
- Developed infrastructure,
- Flexible tax policy,
- High investment climate,
- Encouragement of scientific and research work,
- Strong legislative base,
- Lack of currency control,
- High concentration of financial institutions,
- Simplified registration of companies,
- Possibility of obtaining a residence permit, and subsequently of citizenship.
As a rule, a person willing to create a business in Luxembourg chooses one of the most recommended by specialists forms of enterprises :
- Open limited liability company,
Issuance of registered and bearer shares is allowed. They can be transferred to third parties. A non-resident is entitled to manage the company. The number of shareholders is unlimited. Liability is limited to the size of the contribution. - Closed limited liability company,
Issuance of only registered shares is allowed. The number of shareholders is limited. Shareholders are limited in the right to transfer shares to third parties by the provisions of the Memorandum of Association. - Partnership with unlimited liability,
- Partnership with unlimited liability.
In addition, business in Luxembourg can be established in the form of investment funds, the activities of which are encouraged by the state.
How to open a business in Luxembourg
Considering interest of the state in a transparent and continuously developing investment climate on its territory, according to local legislation, registration of business in Luxembourg is not burdened by complicated requirements.
The list of necessary actions is as follows:
- Decide on the name of the company. It must be unique and different from the names of other companies established in the territory of the principality,
- Prepare a statute and related documents, which subsequently need to be notarized,
- Pay the required amount of capital into one of the banks. Subsequently bank sends a statement confirming receipt of funds to the notary.
- Registration and publication of the statute in the official edition,
- If necessary, obtain permission from the Ministry of the Middle Class,
- Become registered in tax and social services.
The Luxembourg government signed a number of international agreements on double taxation. Thus, non-residents obtained the possibility not to pay taxes at the place of their actual location or citizenship.
Important information:
In 2017 in Luxembourg, a number of amendments to legislation were adopted, which upgraded penalties for tax evasion. In addition, the corporate tax was lowered, and the transfer of tax losses was limited to a period of 17 years.
To make registration of business in Luxembourg successful and within the shortest possible time, we recommend you to contact our specialists. We will provide detailed and qualified consultation.
Please, select organizational and legal form of the company You are interested in:
For reference:
SARL – Société à Responsabilité Limitée - Limited Liability Company (LLC) is a company "established by one or more persons who bear liabilities only within the limits of their contributions". SARL (LLC) is company of commercial nature, whatever its purpose.
The position of the founders in SARL is characterized by the following features:
1. legal entities and natural persons can act as founders.
2. Liability of the founders is limited to the extent of their contribution.
3. The founders are informed of the activities of the company and decide on the annual financial statements.
Advantages of SARL:
1. It is most suitable for establishing enterprises for small and medium-sized businesses with insignificant investments.
2. Possibility to make contribution in the form of providing services, performing works, special knowledge.
3. Capital is freely set by charters.
4. The greatest security, especially for founders who do not have a controlling stake.
5. After the registration of the company, the authorized capital can be used at the discretion of the founders.
SA - Société Anonyme - the analogue of the Joint Stock Company is a limited liability company established under the law of France. It is suitable for large projects.
Features of SA:
1. At least seven shareholders are required (there are no maximum limitations).
2. Shareholders may be legal or natural persons.
3. Important feature is that the shareholder's liability is limited to the amount of contribution.
4. Minimum capital equals to 37,000 euros, at least half of which must be paid at the time of establishment, and the remaining part - within 5 years. Property or funds can be contributed as the capital. If property contribution is made, it shall necessarily be assessed by an expert appointed by the commercial court. So it is suitable for large projects.
5. Responsibility of members of the Board: mismanagement of members of the Board may affect the personal property of individual managers.
6. Mandatory appointment of the final liquidator.
