Incorporate a Limited Company / Société à Responsabilité Limitée (Sàrl) in Luxembourg

The first step to incorporating your company is to check the availability of your proposed company name. The name can be in any language using the Latin alphabet; however, the registry may request a French or German translation if a foreign language is used. The Registrar will reject the registration of a company if the name already exists and any name which the Trade Registry deems offensive will not be allowed. Your company name will need to end with Sàrl and it is normal practice for the Trade Registry to refuse names that are associated with the banking, insurance industries and any name that would suggest Government patronage. We check the name for availability and acceptability with the Registre de commerce et des Sociétés du Luxembourg; once the name is approved, you can reserve it free of charge for a period of 10 days.

If you do not wish to travel to Luxembourg we must be provided with power of attorney, this is mandatory if the shareholders cannot attend the incorporation meeting.

Using the power of attorney we open a national bank account and deposit the minimum share capital, the bank will then issue a money blocking certificate allowing incorporation before the notary. We prepare the articles of association with the collaboration of the notary who then proceeds to register the Sàrl with the appropriate authorities and arrange publication of the incorporation, first in the business register (Registre de Commerce et des Sociétés) and then in the official journal of the Grand Duchy – the Mémorial du Grand-Duché de Luxembourg, Recueil Spécial des Sociétés et Associations.

After the incorporation meeting, the notary issues a ‘money releasing certificate’ which makes the money in your corporate bank account available to the company

In total it requires just 10 days to incorporate your company.

Formacompany has over 20 years’ experience forming companies in Luxembourg and across the world, and our staff will be available to offer advice and support through the entire incorporation process, from initially selecting a suitable company name through to finally commencing taxable activities.

What you need to incorporate a Limited Company/ Sàrl in Luxembourg

To begin incorporation of your Luxembourg Sàrl we will require the following:

  • Your company name
  • The full name, date of birth, address and nationality of all directors
  • The full name and address of all shareholders

Documents you are required to provide:

  • Passport copies of all concerned persons – certified by a notary
  • Proof of residential address (gas/electricity bill or credit/debit card bank statement dated within the last three months) again certified

Registered Office

  • A company in Luxembourg must have a Registered Office where official correspondence is sent, this may be a commercial or residential address and it is normally the main place of business of the company. We provide a registered office as part of our Standard Company Formation Package

Shares and Share Capital

  • Minimum share capital for a Sàrl is fixed at the equivalent of €12,500 and has to be fully paid up during incorporation
  • Share capital may be expressed in any currency
  • Sàrl’s have a closed structure, meaning that share transfers only occur between existing shareholders or with the unanimous permission thereof.
  • The minimum number of shareholders in a Sàrl is one and they may be either an individual or corporate body.
  • For each shareholder we shall need the following information:
    • Corporation – full registered name, trading name, registered office address, company registration number, name and title of legal representative of the company
    • Individual – name, home address, profession, date and place of birth, nationality, marital status and spouse details

What you receive after setting up your new business

  • Original Certificate of Incorporation
  • Original share certificates
  • Original government receipt as evidence of payment of annual company registration and license fees

Advantages of Registering a Limited Company/ Sàrl in Luxembourg

Luxembourg has low VAT rate – The standard rate of VAT in Luxembourg is one of the lowest in the EU; this has attracted many companies to locate distance selling operations there.

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

Directors can be of any nationality. There is no residency or nationality restriction on directors, however, many business licences are easier to obtain if one of the directors is a resident of the European Union.

Shareholders can be of any nationality. There is no residency or nationality restriction on shareholders. Whilst there is a public record of shareholders, you can provide confidentiality for the company’s beneficial owners by using our nominee shareholder service.

Ongoing administration of your Luxembourg Sàrl is very simple. The company does not have to keep records in Luxembourg and whilst you are required to file annual accounts and annual tax returns with the tax authorities (Administration des Contributions Directes), Formacompany is experienced in preparing Luxembourg accounts and returns and we can provide this service as part of our Corporate Administration Package.

Information on Incorporating a Sàrl 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.
  • 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.
  • There is no requirement for a company secretary but a Financial Accounts Manager (Commissaire des Comptes) is required to present the accounts at the company general meeting; no general meeting is required if there are less than 25 shareholders.
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