Luxembourg – Company Incorporation Guidance
Luxembourg Key Points
- Time – 10 days to incorporate your company
- Directors – only one director of any nationality, is necessary for your Sàrl company
- Shareholders – only one shareholder required of any nationality
- Share Capital – the share capital requirement is €12,500
- Support – using our 20 years experience we guide you throughout every step of the company formation process
- The standard rate of VAT is one of the lowest in the EU
A director can be of any nationality, however many business licences are easy to obtain if one of the directors is a resident of the European Union and only one director is required.
The names of directors do appear in public records: in the protocol of the Notary and in the records of the Commercial Registry: the “Registre de Commerce et des Sociétés”
There is no requirement for a company secretary. A Financial Accounts Manager (Commissaire des Comptes) is required to present the accounts at the company general meeting.
The shareholders can be any nationality and only requires one shareholder for an Sàrl. The maxium number of shareholders cannot exceed forty and if your company has under twenty-five shareholders you do not have to hold Annual General meetings. Corporations are allowed as shareholders.
Names of the subscriber shareholders and subsequent change of shareholders are entered in the Registry, the ‘Registre de Commerce et des Sociétés’. Details stating the name, occupation and residency need to be lodged, however confidentiality can be obtained by using our service of nominee shareholder.
When incorporating your business in Luxembourg
When you want to set up a company you will require a business permit and register with the business register. You must also become a member of the Luxembourg Chamber of Commerce, this is done automatically by the tax authorities notifying the relevant chamber.
Ongoing management of the company
The company does not have to keep records in Luxembourg. But you are required to file annual accounts and an annual tax returns with the tax authorities: “Administration des Contributions Directes”. Formacompany are experienced in preparing Luxembourg accounts and annual tax returns and we can provide this service.
Registration of the Deed
This must be effected with the Administration de l’Enregistrement et des Domaines, within 15 days by the notary, or within three months by the parties.
The articles of incorporation and the names of all directors must be published – Publication is in two stages: first by being deposited with the business register (Registre de Commerce et des Sociétés) within one month of completion of the deed of incorporation, and secondly by formal publication in the official journal of the Grand Duchy – the Mémorial du Grand-Duché de Luxembourg, Recueil Spécial des Sociétés et Associations; within a month of deposit with the registrar.
One reason for incorporating in Luxembourg is that the standard rate of VAT is one of the lowest in the EU. This has attracted many companies to locate distance selling operations there.
Profits from commercial activities are taxed at rates from 16%. There is a mixture of local and national taxes, so the rates depend on the location of your registered office. Companies with Soparfi status are taxed on commercial companies in the normal way.
Holding companies can be exempt from paying tax on dividend income and capital gains. There can be no withholding taxes on bringing dividend income into a Luxembourg company and paying it out again to a final holding company. This exemption depends on:
- Meeting certain conditions
- Use of Double Tax Treaties
- Possible use of the EU directive on Parent and Subsidiary companies.