To open your business in Luxembourg, you must take into account several requirements and know what type of company you want to open. So it is essential to choose the status of the company that corresponds to the desired one, in order to succeed in the future. Outlines next are the primary types of companies in Luxembourg and the process involved in registering them.
Different forms of companies in Luxembourg
Private Limited Liability Company (S.à.r.l./Société à Responsabilité Limitée)
This is frequently used for intercompany restructurings or businesses of any kind of average size. The Companies Law enables flexibility for the S.à r.l. in its organization and the structure of its management. Shareholders of the S.à r.l. are subjected to limited liability. Minimally, one director and one shareholder are needed to set up an S.à r.l. There is a requirement of EUR 12,000 minimum share capital to be paid upfront and it may be affirmed in other currencies. Shares under the S.à r.l. the company structure is nonnegotiable and cannot be publicly traded.
The shareholders may control the transfer of shares to third parties as this is legally prohibited.
If it is essential to dissolve an S.à r.l., it must comply with specific conditions.
Public Limited Liability Company (S.A. – Société Anonyme) or S.A.
The Luxembourg public limited company S.A. or société anonyme) is the second most present form of business in Luxembourg. It benefits from a regulated legal framework under the Companies Law and is defined by the fact that its shares are both negotiable and transferable.
Shareholders of an SA are subject to limited liability which grants them insurance from the debts and duties of the company. Shareholders will only lose their investable amount of shares and contribution to the capital. To set up an S.A., there must be at least a director and a shareholder. The minimum share capital to be subscribed in an S.A. is EUR 31,000.
It is possible to issue non-voting shares under specific conditions. Its access to financial markets is enabled through public or private issuance of bonds or listing on the stock exchange.
SAS – Société par Actions Simplifiée
SAS is a form of company that is very comparable to the S.A, which was introduced into the Luxembourg legal system recently. It is a company whose capital is divided into shares and is comprised of one or more persons.
The creation of a Luxembourg SAS pursues the same formalities as the creation of a SA and must involve a notary. A minimum of one partner is needed to set up a SAS.
A SAS may not perform a public issue of shares, and the capital requirement of a SAS is at least €30,000.
Simplified Limited Liability Company (Simplified LLCs / SARL-S)
To learn more about the Sàrl-S or simplified limited liability company please read: Sarl-S to start your business in Luxembourg.
Sole Proprietorship
A sole proprietorship refers to a person who carries out his activity in his own name. A sole Proprietorship is a form of business that is mainly set up by a trade, craftsman, artisan, or self-employed intellectual worker. The Sole Proprietor takes decisions alone and has sole responsibility for the financing of the business, therefore assuming full responsibility towards third parties and committing his/her personal assets. The business and owner are recognized as one under the eyes of the law. Sole proprietors must register with the Joint Social Security Centre. This enables them to have social protection if they need it.
Documents required for the opening of a Luxembourg company
Entrepreneurs and investors who want to open their own businesses in Luxembourg consider having the following documents:
Personally Documents
- the identity document(s) of individuals who will have a role in the company,
- proof of residence
- an extract from the criminal record
- A notarial certificate of personal non-bankruptcy
- A higher education diploma.
Corporate Documents
- Articles and Memorandum of Association
- Initial Capital Information
- Information on the Shareholders and Directors
- Certificate from Bank of the capital deposit.
Company Incorporation steps in Luxembourg
- Selection of company name.
- Giving information on activities.
- Opening of a business bank account.
- Contribution of authorized capital.
- Notarization of the applicable documents.
- Entering data into the Commercial Register.
- Assignment of Tax Identification Number.
Since Luxembourg is a small country, processing times are quite short in relation to others. It should still be noted that the time to procure authorizations is just a few weeks.
Advantages of opening your business in Luxembourg
First of all, in terms of economic crisis, Luxembourg maintains stability.
Luxembourg is one of the most receptive economies in the world, with few foreign exchange controls and foreign capital flowing freely, which in turn enables the country to have an undisputed pro-business environment.
The country is a global finance hub with a vast banking sector and a thriving investment fund industry. It is also one of the lowest public debts in the European Union. Most of all, Luxembourg is attractive with regard to favorable tax and legal regimes.
If you are contemplating the Luxembourg market, it is important to have an experienced ally with knowledge of local requirements. With our knowledge, Damalion will deliver the information you need to do business in Luxembourg.
Contact your Damalion expert now for your Company formation in Luxembourg.
