Luxembourg

Luxembourg is a small European country. Though not being a large state, it offers substantial opportunities for business. Thanks to the central location Luxembourg enjoys in the region, it has strong commercial ties with the EU markets. Moreover, the country is just a few hours drive from major European capitals and business centres, such as Paris, Frankfurt, and Brussels. Economic stability and openness to foreign direct investment are another reason why entrepreneurs decide to set up a company here.

Registration procedure is simple for both domestic and foreign investors and takes a little time if an applicant provides all the necessary documents.

6 simple steps to purchase a company

  1. choosing a country

  2. choosing a bank

  3. payment (by any method)

  4. sending documents

  5. company registration

  6. bank account opening

Advantages of registering a company in Luxembourg:

  1. Well-developed infrastructure.
  2. Flexible tax policy.
  3. Favourable investment climate.
  4. Promotion of research activities.
  5. Strong legislative framework.
  6. No foreign exchange controls.
  7. Large concentration of financial institutions.
  8. Simplified company registration procedure.
  9. Opportunity to obtain a residence permit, and ultimately citizenship.

Organisational and legal forms

  1. Public Limited Liability Company may issue both registered and bearer shares, which can be transferred to the third parties. No residency requirements are imposed on the person having responsibility for the management of the company. There is no maximum number of shareholders. Members’ liability is limited to the amount of their personal contributions.
  2. Private Limited Liability Company may only issue registered shares. The number of shareholders is limited. The company’s articles of association stipulate limitations on the transferability of the shares.
  3. Unlimited (General) Partnership
  4. Limited Partnership

It is also possible to establish a business in a form of an investment fund, whose activities are promoted by the state.

Company registration procedure

Provided the state’s interest in ensuring transparency and constant development in the area of investment, the local legislation does not establish any complex requirements which could encumber company registration process.

The steps to be taken are following:

  1. Decide on the company’s name. It must be unique, that is, differ from the names given to the other enterprises set up in the jurisdiction.
  2. Prepare the articles of association and related documents, which shall thereafter be certified by a notary.
  3. Deposit the share capital into company’s bank account. Subsequently, the bank will block the share capital amount and issue a blocking certificate to the attention of a Luxembourg notary.
  4. Incorporate the company, with the articles of association to be published in the official bulletin (Luxembourg Official Gazette).
  5. If necessary, obtain a business permit by the Ministry for the Middle Classes.
  6. Register with the Joint Social Security Centre and Luxembourg Inland Revenue authority.

The government of Luxembourg has concluded a number of agreements on avoidance of double taxation. Thus, non-residents are exempted from paying taxes in the country where they actually live or of which they are citizens.

Essential points

In 2017, a series of legislative amendments providing for an increase in the penalties for tax evasion was adopted in Luxembourg. Furthermore, corporate tax was reduced, and the maximum period during which tax losses can be carried forward was limited to 17 years.

In order to ensure successful and early completion of the registration process, we recommend that you benefit from the services of our professionals, who offer detailed and competent consultations.

Choose the legal form you are interested in:

  1. Luxembourg S.A.
  2. Luxembourg S.A.R.L.

For reference: S.A.R.L. (Société à responsabilité limitée, or Private Limited Liability Company) is a company established by one or more founders, with members’ liability being limited to the amount of their personal contributions. Irrespective of its objectives, S.A.R.L. is a commercial entity.

The status of the S.A.R.L. founders is characterised by the following:

  1. Founders may be both natural and legal persons.
  2. They are liable only to the extent of their personal contributions.
  3. They are informed of the company’s activities and approve annual financial statements

S.A.R.L. main features:

  1. This legal form is the most appropriate one for setting up small and medium-sized businesses with modest investments.
  2. S.A.R.L. provides an opportunity to make a positive contribution in delivering services, knowledge sharing, and other activities within the country.
  3. The amount of share capital may be set arbitrarily, but shall not be less than (rounded) EUR 12,000.
  4. S.A.R.L. is the most secure form, in particular for the company founders who do not own the controlling interest.
  5. After registration, the founders are free to manage the capital at their sole discretion.

S.A. (Société anonyme) is a kind of Public Limited Liability Company, which is incorporated in accordance with French legislation. It is a suitable option for large business.

S.A. main features:

  1. No restrictions on the maximum number of shareholders are imposed (there must be at least one).
  2. Legal persons may be the company’s shareholders as well as natural persons.
  3. Shareholders’ liability is limited to the value of shares they hold.
  4. The minimum share capital (rounded) of EUR 30,000 is required, which must be fully paid up at formation. In-cash and in-kind (property) capital contributions are possible. Property contributions shall be subject to valuation. For such appraisal to be made, an expert appointed by the commercial court is drawn on.
  5. With regard to the Board members’ liability, it should be noted that mismanagement can result in the loss of directors’ personal property.
  6. The liquidator must be appointed.

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