Expanding your consulting business with a Luxembourg SARL-S
Luxembourg has long been recognized as a strategic business hub in Europe, offering a stable economic environment, a favorable regulatory framework, and access to the European Single Market. If you’re a consultant looking to scale your business across Europe, forming a Société à Responsabilité Limitée Simplifiée (SARL-S) in Luxembourg can provide significant advantages.
From a business-friendly tax regime to simplified banking solutions, Luxembourg offers a range of benefits that make it an ideal jurisdiction for entrepreneurs. Damalion assists businesses in setting up their simplified limited liability company (SARL-S) and securing a bank account to streamline their operations. Additionally, Damalion helps entrepreneurs obtain their business permit in Luxembourg, ensuring a smooth and compliant setup. Here’s how a Luxembourg SARL-S can help you grow your consulting business on a European scale.
1. Low Share Capital Requirement
One of the biggest advantages of a Luxembourg SARL-S is the extremely low minimum share capital requirement. A SARL-S can be incorporated with a minimum share capital of just EUR 1, making it an accessible structure for small and medium-sized consulting businesses looking to establish a European presence.
Damalion assists entrepreneurs in opening a bank account for their SARL-S, ensuring that all financial operations are smoothly managed from the outset.
2. Favorable Tax Regime and 2025 Corporate Income Tax Reform
Luxembourg is known for its competitive tax system, and recent 2025 tax reforms have further enhanced the country’s attractiveness for businesses. Key aspects of Luxembourg’s tax regime that benefit consulting firms include:
- Corporate Income Tax (CIT): As of 2025, the corporate income tax rate has been reduced to 14% for companies with taxable profits exceeding EUR 200,000. This rate, combined with the municipal business tax (6.75% in Luxembourg City) and the solidarity surtax (1.19%), brings the total effective tax rate to approximately 22.69%.
- Progressive Taxation for SMEs: Companies with profits below EUR 200,000 benefit from a lower tax rate of 15%, making it ideal for small and growing consulting firms.
- Tax Treaties & Double Taxation Avoidance: Luxembourg has signed over 80 double tax treaties, ensuring reduced withholding tax on dividends, interest, and royalties, and preventing double taxation for businesses operating across borders.
- VAT Benefits: Consulting firms benefit from Luxembourg’s VAT regime, with the standard rate set at 17% and exemptions available for certain professional services.
3. Limited Liability Protection
As a limited liability company, a SARL-S protects personal assets from business liabilities. This is crucial for consulting firms, as it mitigates risks associated with legal disputes, financial obligations, or contractual liabilities. The liability of each shareholder is limited to their capital contribution, providing security while allowing for business expansion.
4. Access to Banking Solutions with Damalion
Opening a corporate bank account in Luxembourg is a critical step in establishing your SARL-S. However, banks in Luxembourg have strict due diligence and compliance requirements.
Damalion helps entrepreneurs navigate the banking process, ensuring smooth account setup with one of Luxembourg’s leading financial institutions. Our services include:
- Assistance in selecting a bank that aligns with your consulting firm’s needs.
- Support in preparing and submitting documentation, including KYC (Know Your Customer) requirements.
- Guidance on financial structuring to optimize cash flow and international transactions.
Damalion also assists entrepreneurs in setting up bank accounts specifically for SARL-S structures, enabling them to comply with financial regulations and manage business transactions efficiently.
5. Simplified Business Expansion in Europe
By incorporating a SARL-S in Luxembourg, consulting firms gain immediate access to the European market without the need for additional registrations in multiple EU countries. Key benefits include:
- Freedom to provide services across the EU under the Services Directive.
- Ability to hire talent from any EU country without excessive bureaucratic hurdles.
- Simplified cross-border invoicing and financial transactions within the Eurozone.
6. Assistance in Obtaining a Business Permit
To legally operate a business in Luxembourg, many industries require a business permit issued by the Ministry of the Economy. Consulting firms must comply with specific requirements regarding professional qualifications and business experience.
Damalion simplifies the process by:
- Advising on eligibility and required documents.
- Preparing and submitting business permit applications.
- Ensuring compliance with Luxembourg’s commercial laws.
7. Flexible Governance and Operational Structure
A SARL-S can be formed with just one shareholder and one director, making it an ideal vehicle for sole consultants or partnerships. The management structure is straightforward, with no mandatory board of directors, reducing administrative overhead.
For businesses planning further growth, Luxembourg allows a SARL-S to be converted into a sàrl or société à responsabilité limitée (limited liability company with a share capital of 12,000 euros) or an SA (Société Anonyme with a share capital of 31,000 euros), a more flexible entity suited for larger enterprises or those seeking external investment.
8. Business-Friendly Regulatory Environment
Luxembourg’s government actively supports business innovation and foreign investment through:
- Startup incentives and grants for new companies.
- Strong IP protection laws, beneficial for consulting firms specializing in proprietary methodologies.
- Fast incorporation process, allowing businesses to be fully operational within a few weeks.
Setting up a Luxembourg SARL-S provides consulting entrepreneurs with a strategic advantage for expanding their business across Europe. With a low share capital requirement, a business-friendly tax regime (including the latest 2025 reforms), and strong banking support from Damalion, entrepreneurs can establish a presence in Luxembourg and access the European market seamlessly.
If you’re considering setting up a consulting business in Luxembourg, Damalion can guide you through the incorporation process, assist with banking solutions, and help you obtain your business permit. Get in touch with your Damalion expert today to start your European business expansion!
