Company Registration in Luxembourg

General Information About the Jurisdiction

Luxembourg is a small Western European state with an exceptionally high standard of living. Although it is one of the smallest sovereign countries in Europe, it is also among the wealthiest.

Advantages of Company Registration in Luxembourg

• 100% foreign ownership;
  There are no residency requirements for shareholders or directors when registering a company in Luxembourg. Both directors and shareholders may be residents of any country.
• Ideal for holding structures and investment funds;
  Luxembourg offers highly favorable conditions for establishing international investment funds and holding companies.
• High level of confidentiality;
  Information is strongly protected, and confidentiality standards in Luxembourg are exceptionally high.
• No currency control;
• Fast company registration process.
  The average registration time for a company in Luxembourg is approximately one week.

What Should Be Considered?

• Luxembourg is not a low-tax jurisdiction. Despite its extensive network of double taxation treaties, tax rates in Luxembourg are not considered low.
• Luxembourg is generally better suited for larger companies expanding their operations, as it is not a budget-friendly jurisdiction. If you are looking for a country to start your entrepreneurial activity, there may be more suitable options.

Legal Forms of Companies in Luxembourg

To register a company in Luxembourg, it is first necessary to choose its legal form. The most common legal structures include:

1. Private Limited Liability Company (SARL). Shareholders are not personally liable for the company’s obligations and are responsible only within the limits of their contributions. The minimum share capital for an SARL is EUR 12,500.
2. SARL-S (Société à responsabilité limitée simplifiée or simplified limited liability company).
   This form requires a minimum share capital of just EUR 1, and certain documents do not require notarization during registration. SARL-S companies may only be established by individuals.
3. Public Limited Company (SA). The share capital is divided into a specified number of shares. The minimum share capital for an SA is EUR 31,000.
4. Financial Holding Company (Société de Participation Financière or Soparfi). A type of holding structure widely used in Luxembourg.

5. Limited Partnership (SCS). In this type of partnership, in addition to general partners, there are limited partners.
6. General Partnership or Partnership with Unlimited Liability (SENC). A general partnership consists of general partners who are fully liable for the partnership’s obligations with their personal assets.

Company Registration in Luxembourg: the Procedure

The company registration process in Luxembourg begins with collecting the required documents. Identification documents for all participants (please check with our specialists) are needed, along with the following information:

• 2–3 proposed company names in order of priority;
• the future company structure (director, shareholder, beneficial owner);
• the planned business activity.

Once all necessary documents and information are received, the registration process is launched immediately. The entire procedure — from collecting documents to preparing the final set of corporate documents — includes the following stages:

1. Checking and selecting an available company name. The name verification process takes no more than one day;
2. Preparing forms and documents for submission to the Luxembourg Company Register. In Luxembourg, the Company Register is called the Luxembourg Business Registers (LBR);
3. Depositing the share capital into a temporary account;
4. Completing the company registration process. Registration usually takes 7–10 business days from the moment all required forms and documents are submitted to the Register;
5. Preparing the constitutional documents of the registered company and producing a company seal (if required);
6. Notarization and legalization of documents (if required). Notarization takes 1–2 days, while legalization with an apostille takes 7–9 days. Luxembourg is a party to the Hague Apostille Convention, so apostilles issued in Luxembourg are recognized.

Corporate Taxation in Luxembourg

The first step is to determine whether a company is a Luxembourg tax resident. If the company is a tax resident (i.e., registered in the Luxembourg Company Register or has its place of effective management in Luxembourg), it is taxed on its worldwide income. If the company is not a tax resident, it pays tax only on income generated within Luxembourg.

• Corporate Income Tax in Luxembourg

In Luxembourg, the corporate income tax rate depends on a company’s annual profit. If the taxable profit does not exceed EUR 175,000, the rate is 14%. For taxable profits exceeding EUR 200,000, the rate is 16%.

In addition to the standard rates, a municipal business tax is added, which increases the overall tax burden. The exact calculation of taxes is determined on a case-by-case basis.

• Dividend Tax

Dividends paid to a non-resident of Luxembourg are generally subject to a 15% withholding tax.

• VAT in Luxembourg

The standard VAT rate in Luxembourg is 17%, which applies to most goods and services. However, reduced rates are also in place:

• • 14% applies to certain types of wine and printed advertising;
  • 8% applies to gas and electricity;
  • 3% applies to television and radio broadcasting services;
  • 0% applies to financial and insurance services.

Filing and Preparing Reports in Luxembourg

Every company registered in Luxembourg is required to prepare and submit annual financial statements. These statements provide an analysis of the company’s business activities and typically include a profit and loss statement, a balance sheet, and various explanatory notes.

The reporting period usually coincides with the calendar year, although a company may change its first reporting period.

By default, financial statements must be submitted by March 31 of the year following the reporting period. Failure to submit on time results in penalties for the company in Luxembourg. Therefore, monitoring filing deadlines is essential. When registering a company with GFLO Consultancy, we will provide timely reminders of all important dates.

Conclusion

Registering a company in Luxembourg allows you to operate in a comfortable European country where all conditions are favorable for business activities.

How We Can Assist

• Advise on the most suitable company form according to your needs;
• Assist in gathering documents and provide consultations on activities, structure, and other matters;
• Submit documents and information to the registering authority;
• Handle communication with the registering authority on your behalf;
• Prepare the set of constitutional documents for the registered company;
• Support document notarization if necessary;
• Assist with opening a bank account;
• Prepare documents for applying for Luxembourg residence or citizenship;
• Send documents to the address you provide.