DOING BUSINESS IN LUXEMBOURG IN 2018
Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with i) Luxembourg business registration ii) business licensing iii) Luxembourg business banking solutions iv) visa options and staff recruitment strategies and v) workspace rent.
|Summary||Tax resident LLC||Fast business set up solution||Tax exempt holding||Wealth management company||Tax exempt IP holding||PLC||Branch|
|Also known as||SARL||SARL||SOPARFI||SPF||SOPARFI||SA||Branch|
|Best use of company?||Trading company||To invoice Clients immediately||Holding company||Wealth management||Receive IP income||EU IPO||Consolidated accounts|
|How soon can you invoice Clients/sign sales contracts?||1 month||1 week||1 month||Cannot trade||1 month||1 month||1 month|
|How soon can you hire staff?||1 month||2 weeks||1 month||1 month||1 month||1 month||1 month|
|How soon can you sign a lease agreement?||Immediately||Immediately||Immediately||Immediately||Immediately||Immediately||Immediately|
|How long to supply corporate bank account numbers?||2 months||1 week||2 months||2 months||2 months||2 months||2 months|
|How long to supply company registration/tax numbers?||1 month||2 weeks||1 month||1 month||1 month||1 month||1 month|
|Corporate tax rate on annual net profits?||19%||19%||up to 0%||up to 0%||up to 0%||19%||19%|
|Limited liability entity?||Yes||Yes||Yes||Yes||Yes||Yes||No|
|Resident director/partner/manager required?||No||No||No||No||No||No||Yes|
|Minimum paid up share capital?||€12,400||€12,400||€12,400||€12,400||€12,400||€31,000||€0|
|Corporate bank account location?||ABN AMRO||Citibank||HSBC||Barclays||Citibank||Standard Chartered||CommerzBank|
|VAT payable on sales to local customers?||17%||17%||17%||Cannot trade||17%||17%||17%|
|Average total engagement costs?||€19,170||€55,170||€24,170||€23,170||€23,170||€22,455||€18,870|
|Average total engagement period?||3 months||3 months||3 months||3 months||3 months||3 months||3 months|
|Accounting and tax considerations||Tax resident LLC||Fast business set up solution||Tax exempt holding||Wealth management company||Tax exempt IP holding||PLC||Branch|
|Statutory corporate tax payable?||19%||19%||up to 0%||up to 0%||up to 0%||19%||19%|
|Legally tax exempt if properly structured?||No||No||Yes||Yes||Yes||No||No|
|Group HQ tax incentives?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Must file an annual tax return?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Must file annual financial statements?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Must appoint an auditor?||No||No||No||No||No||Yes||No|
|Access to double taxation treaties?||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Withholding tax on payments to shareholders?||15%||15%||0%||0%||0%||15%||0%|
|Company Registration||Tax resident LLC||Fast business set up solution||Tax exempt holding||Wealth management company||Tax exempt IP holding||PLC||Branch|
|Minimum number of shareholders/partners?||1||1||1||1||1||1||Parent company|
|Minimum statutory paid up share capital?||€12,400||€12,400||€12,400||€12,400||€12,400||€31,000||€0|
|Shelf companies available?||Yes||Yes||No||No||No||No||No|
|Time to incorporate a new entity?||2 weeks||2 weeks||2 weeks||2 weeks||2 weeks||4 weeks||4 weeks|
|Can easily convert to a PLC?||Yes||Yes||Yes||Yes||Yes||Yes||No|
|Can have preference shareholders?||Yes||Yes||Yes||Yes||Yes||Yes||No|
|Business Considerations||Tax resident LLC||Fast business set up solution||Tax exempt holding||Wealth management company||Tax exempt IP holding||PLC||Branch|
|Good entity for trademark registration?||Yes||Yes||No||No||Yes||Yes||Yes|
|Good entity to secure an import and export license?||Yes||Yes||No||No||No||Yes||Yes|
|Minimum number of directors/managers?||1||1||1||1||1||3||1|
|The entity will likely be regulated by?||Trade and Companies Register||Trade and Companies Register||CSSF||CSSF||CSSF||Trade and Companies Register||Trade and Companies Register|
|Good business vehicle to secure trade finance?||Yes||Yes||No||No||No||Yes||Yes|
|Good vehicle to bid for government contracts?||Yes||Yes||No||No||No||Yes||Yes|
|Government grants available?||Yes|
|Resident tax representative required?||No|
|Maximum shareholding for foreigners?||100%|
|Sponsorship by local citizen required?||No|
|Our Client needs to travel to Luxembourg for business set up?||No|
|Temporary physical office solutions available?||Yes|
|You need a local resident as bank signatory?||No|
|Can be wholly foreign owned?||Yes|
|Monthly VAT reporting to the government?||No|
|Must sign an office lease agreement?||No|
|Shareholders and directors documents to be attested?||Yes|
|Foreign director needs a tax number?||No|
|Foreign director needs a residence visa?||No|
|Maximum number of staff allowed?||No maximum|
|Expatriate to local staff ratio?||None|
|Can secure residence visa for business owner?||Yes|
|Other useful information|
|Government approval required for foreign owners?||No|
|Public register of shareholders and directors?||Yes|
|What will be included in my customer sales invoice?||(click link)|
|This country has signed free trade agreements?||Yes|
|This country is a member of WIPO/TRIPS?||Yes|
|This country is a member of the ICSID?||Yes|
|Average customs duties suffered?||0.60%|
|Government foreign investment approval required?||No|
|Average monthly office rental? (per sq m)||€65|
|Minimum statutory monthly wage?||€2,000|
|Average monthly € salary for local skilled employees?||€4,810|
|US$ deposit interest rate? (1 year average)||0.25%|
|Overseas remittance currency controls?||No|
|Multi-currency bank accounts available?||Yes|
|Corporate visa debit cards available?||Yes|
|Quality of e-banking platform?||Excellent|
|Crowd funding available in this country?||Yes|
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Advantages of a Luxembourg company
Advantages of Luxembourg company registration
- A Luxembourg holding company (Soparfi) is legally exempt from all local taxes including corporation tax, capital gains tax and withholding tax if the parent company holds at least 10% shares in an EU resident subsidiary for a continuous period of 12 months. Also, these tax advantages will also be extended to other countries with which Luxembourg has signed a DTA if these countries have corporate tax rate of at least 21%;
- A Luxembourg financial assets holding company (SPF) is legally tax exempt from all local taxes including corporation tax, capital gains tax and withholding tax. This vehicle is often used to manage a family privately owned investment portfolio;
- Registering a Luxembourg company to hold patents, trademarks and registered designs has tax advantages, as royalty income on these rights only suffers corporation tax of 6% and enjoys zero withholding tax on distribution payments. As Luxembourg is a member of both the EU and the World Intellectual Property Organization (WIPO), a Luxembourg company is the perfect vehicle through which to hold intellectual property rights that can be enforced internationally;
- Luxembourg is a popular domicile for registering European investment funds, as collective investment fund vehicles like SICAVs are legally exempt from all local taxes including corporation tax, capital gains tax and withholding tax;
- The European Union Parent Subsidiary Directive eliminated withholding taxes on dividends paid between related companies in Europe;
- There are no withholding taxes on interest, royalties or technical service fees paid to non-resident companies;
- A Luxembourg private equity firm (SICAR) is legally tax exempt for all income from bonds and equities. The SICAR law provides a full withholding tax exemption on dividends distributed to its shareholders. A SICAR must be authorized by the CSSF prior to commencing its operations;
- A foreign-owned company can invest in every business sector without restriction;
- Luxembourg boasts highly skilled labour with a literacy rate of 99% and a technologically advanced rate of 90%, making Luxembourg employees efficient and productive;
- Luxembourg is a founding member of the European Union, thus Luxembourg business registration offers virtually unrestricted access to the EU and Shenghen area market of 26 developed countries.
Disadvantages of Luxembourg company registration
- Luxembourg is considered a ‘tax haven’ by EU member states. Its membership of the European Union will continue to force the country to abandon legal tax exemptions on holding companies;
- If registering a Luxembourg subsidiary to operate locally, the company requires a business permit and must be managed by a resident director;
- A Luxembourg commercial trading company suffers company taxation at 21%. Consequently, entrepreneurs often choose only to register tax exempt holding companies to receive passive income when investing in Luxembourg;
- There is valid concern about Luxembourg’s banking secrecy laws, agreeing to OECD standards on exchange of customer information since 2009, which could be disadvantageous for business registration in Luxembourg;
- Starting a Luxembourg company takes up to three weeks, making the process lengthy and cumbersome;
Best uses of a Luxembourg company
- Luxembourg is a cauldron of international entrepreneurs mainly in the financial industry, where 50% of the population is foreign. There exist in Luxembourg the perfect ingredients for creativity and exchange of skills across industries and cultures, stoked by a liberal, entrepreneurial free market.
- Located in the centre of Europe, Luxembourg is in direct contact with many leading European markets such as Germany, Belgium, France and the UK.
- The lack of income tax on dividends received under the Soparfi scheme also makes Luxembourg an excellent choice for your firm’s European headquarters;
- As part of the EU, Luxembourg can receive payments from subsidiaries within the EEA without suffering withholding taxes on those payments. This is thanks to the EU Parent-Subsidiary Directive.
Luxembourg corporate banking solutionsLuxembourg is a renowned banking centre in the heart of Europe. It has a highly advanced infrastructure, making a Luxembourg bank account a secure, long-term solution for international entrepreneurs. The following information will help you determine whether a corporate bank account in Luxembourg is the optimum solution for you:
- Luxembourg is a reputable, politically-stable European country in which to open a corporate bank account;
- A corporate bank account in Luxembourg portrays an excellent image internationally, important to your suppliers and customers;
- The process to open a corporate bank account is straightforward;
- A business bank account is key to setting up a business in Luxembourg;
- Healy Consultants can open a corporate bank account on our Client’s behalf without our Client needing to visit Luxembourg. This is because of our close relationship with Luxembourg banks including HSBC, Standard Chartered, and Citibank;
- Entrepreneurs planning to open a Luxembourg bank account should note that the Grand Duchy is a member of the OECD (Organisation for Economic Cooperation and Development), which supports the exchange of bank customer information with fellow members;
- A Luxembourg corporate banking options offer accounts in multiple currencies;
- A business bank account in Luxembourg is supported by a range of additional banking services, including international trade services (import finance, export services, risk management, and e-commerce) and investment banking services (for international private Clients, international and local companies and trusts, charities, and personal and corporate pension schemes);
- For Healy Consultants to open a corporate bank account without the Client visiting Luxembourg, we require certain due diligence information including: notarized copies of passport and driving licence of all directors; the company’s corporate documents, including certificate of incorporation, memorandum and articles and directors/trustees resolutions. This documentation must be certified by the local branch of the Luxembourg bank (or by a notary public) in the Client’s home country and evidence of the company’s nature of business provided (e.g. sample invoices or purchase orders etc.).
Healy Consultants’ fees to help open a Luxembourg corporate bank account
Our fee to assist you to open a corporate bank account in Luxembourg amounts to US$4,950. This fee includes:
- Healy Consultants’ international banking team completing the Luxembourg corporate bank account application form on behalf of our Client, along with obtaining our Client’s signature;
- Preparing a detailed business plan relating to our Client’s company to support the application. The business plan provides information on the company’s activities, products and services offered, details of the company’s suppliers, and references to its Clients and intended markets;
- Submitting the completed application form and the business plan to the bank, together with the corporate, and personal due diligence documents outlined above;
- Attending an interview with a bank in Luxembourg by a local Healy Consultants officer on your behalf, describing your global business activities and explaining why you require the corporate bank account. As described above, Healy Consultants can open a Luxembourg business bank account without the bank signatory and beneficial owners’ presence;
- Paying the initial bank deposit to the Luxembourg bank on our Client’s behalf. A scanned copy of the bank deposit slip is emailed to our Client as verification of the same;
- Applying for internet banking facilities to allow our Client to conduct their banking activities remotely;
- Healy Consultants applying for a credit card, ATM card and cheque book, on the Client’s behalf, to complement the newly opened bank account;
- Healy Consultants’ international banking team receiving approval from Luxembourg for the opening of the corporate bank account;
- Healy Consultants receiving the internet banking login and password information in a sealed envelope, passed directly to our Client;
- Healy Consultants receiving a corporate cheque book in a sealed package that is passed directly to our Client;
- Healy Consultants receiving credit and ATM cards in a sealed envelope that is forwarded directly to our Client.
Please note that our fee to open the corporate bank account does not include the initial deposit required by the bank.
Business entities typesHealy Consultants will design the optimum corporate structure to support our Clients’ business needs. There are several business entities available for Luxembourg company setup, the most common being the limited liability company, locally known as the SARL. Luxembourg is also a great place to incorporate a holding company, which will allow our Clients to legally minimize tax over earnings sourced from other European countries.
The Luxembourg limited liability company (Société à responsabilité limitée)
- The LLC, locally known as sociétés à responsabilité limitée (SARL), constitute a popular vehicle for international businesses to set up a subsidiary in Luxembourg. The LLC can also be structured as a tax-efficient investment vehicle;
- An LLC can be setup in Luxembourg by i) a sole shareholder with ii) a minimum share capital of €12,400. Our Clients will also need to appoint one director who can be provided by Healy Consultants on request. A sole investor can set up an SARL with a minimum share capital of €12,400;
- An SARL is required to file financial statements annually. However, the appointment of an external auditor and audit obligations only apply if the company exceeds two of the three following thresholds: i) annual sales over €8.8 million ii) over 50 employees and iii) assets over €4.4 million;
- All companies wishing to operate and make sales within Luxembourg must have a business permit, which requires i) a manager resident in Luxembourg and ii) actual business premises. Pure investment vehicles and holding companies have no such requirement.
The Luxembourg financial holding company (Soparfi)
- A Luxembourg holding financial company is beneficial to our Clients in need for an EU-based holding company. Such business entity will indeed benefit from legal tax exemption on capital gains, dividends and interest remitted by subsidiaries, provided they are domiciled in i) an EU member state or ii) a country which has signed DTA with Luxembourg and has corporate income tax rate of at least 21%;
- A Luxembourg holding company can be setup by a sole shareholder. It is usually established through the setup of an LLC, with holding company objects clause in its Memorandum and Articles of Incorporation. It can also be set up in the form of a public limited company (SA). Healy Consultants can advise on the suitability of a Luxembourg holding company for your business and establish one on your behalf.
The Luxembourg public limited liability company (Société anonyme)The setup of a Luxembourg public limited company requires a minimum share capital of €31,000. The company may have an unlimited number of shareholders. Furthermore, the company is allowed to issue bearer shares. This entity can be used to access the financial markets through public or private issuance of bonds and equities. Such an entity is required to i) appoint one auditor and ii) submit audited financial statements.
The Luxembourg branch
- A foreign company can set up a business in Luxembourg by establishing a local branch. A branch does not enjoy a legal personality separated from its head office, which means the parent company is responsible for the branch’s liabilities. The branch must be registered with the Luxembourg trade register and requires a business permit;
- Registering a branch in Luxembourg is a simple process if certain steps are followed and the documents are properly submitted. The whole Luxembourg business setup process takes 3 weeks including obtaining a business permit and registration at the Trade and the Companies Registrar.
The Luxembourg representative officeWhile a Luxembourg representative office can be set up by a business based in any country, the office is not permitted to make direct sales in the country. Representative offices may only engage in activities which will not amount to carrying on business, for example market research.
The tax exempt IP holding company
- In 2007, the Luxembourg government passed a law concerning the taxation of royalties earned from intellectual property from unrelated parties. This law encourages investing in Luxembourg via research and development and adds incentives to set up a company in Luxembourg and/or register intellectual property there. This makes Luxembourg an excellent jurisdiction in which to set up a business in research-intensive industries such as i) pharmaceuticals and ii) software development;
- For such companies, a mere 6% corporation tax is payable on i) royalty income and ii) capital gains on the disposal of such intellectual property. In addition, the following tax benefits are also available: i) zero withholding tax on dividends to beneficial owners ii) zero withholding tax on interest paid to non-EU residents iii) zero withholding tax on royalties paid to all counterparties iv) access to Luxembourg’s extensive double taxation treaty network with over 60 countries and v) access to the EU Parent-Subsidiary Directive;
- Royalty income derived from intellectual property from non-group companies includes consideration for the use of any i) copyright on standard software ii) trade mark iii) registered design or model and iv) patents. Copyright in works other than software is not eligible for the reduced rate of tax on intellectual property in Luxembourg. The IP holding company is a fully tax resident company limited by shares and can be set up as a Luxembourg LLC or PLC.
The Luxembourg partnershipThis Luxembourg business structure is popular with accountants, architects, consulting engineers and lawyers. There are three types of partnerships including i) a general corporate partnership (SENC) ii) a limited corporate partnership (SECS) and iii) a corporate partnership limited by shares (SCA). At least one of the partners in each of these structures must be a general partner with unlimited liability.
Different types of business entities in Luxembourg
Luxembourg financial companiesLuxembourg is an attractive place for our Clients to provide financial services, thanks to well-designed prudential and other financial regulations and low taxation.
The Luxembourg securitization company
- Our Clients holding i) real estate ii) private equity and iii) other illiquid assets will find it advantageous to setup a Luxembourg securitization company. Such company will enable them to convert these assets into structured financial products which will then be sold more easily to investors;
- Because the earnings generated by the securitization company will be distributed to its investors, the securitization company will not have to pay tax on generated income. However, the securitization company is still liable to standard corporate tax in Luxembourg and as a result will have to pay a minimum corporate tax of up to €21,400. It will also have to submit audited annual financial statements.
The Luxembourg Specialized Investment Company (SIF)Our Clients willing to setup an investment fund in the European Union often choose to establish a Luxembourg Specialized Investment Fund. This type of business entity must have a capital of at least €1,250,000. The SIF is exempt from corporate income tax and net wealth tax, but will have to pay subscription tax of 0.01% representing 0.01% of its net asset value.
The Luxembourg Investment Company in Risk Capital (SICAF)An Investment Company in Risk Capital can be established to invest into venture capital and other risky securities. It must be setup with a capital of at least €1 million. While only qualified investors approved by the Luxembourg Financial Markets and Services Authority can invest in the company’s financial products, its management and financial strategies benefit from flexible regulations.
The Luxembourg Private Asset Management Company (SPF)
- The Luxembourg Private Asset Management Company can be setup by our Clients with a minimum share capital of €12,400. This business entity can be used to offer asset management services to both local and global Clients, provided they are individuals, not corporates. The company can also not get involved with management of companies in which it holds capital;
- A Luxembourg Private Asset Management Company is exempt from corporate income tax. It will however have to pay a subscription tax of 0.01% representing 0.01% of its net asset value;
- Along with the Liechtenstein Stiftung, the Luxembourg SPF is one of the best ways to manage your family’s wealth. Compare these two options with other wealth management structures on this page: Family wealth management vehicles.
10 steps to register a company
- Prior to Healy Consultants starting the incorporation process, our Client i) settles Healy Consultants’ fees, ii) signs and returns our Client Engagement Letter and iii) provides us all the required due diligence documents;
- Healy Consultants drafts a detailed engagement plan, mapping out by week each step to i) company incorporation ii) corporate bank account opening and iii) license grants, thereby optimizing transparency and setting Client expectations;
- Healy Consultants reserves the company name with the Luxembourg Commercial Register and prepares the company’s deeds of establishment and articles of association. The exact corporate structure is agreed with our Client;
- Healy Consultants assists our Client open a Luxembourg corporate bank account with a local or an international bank. Our Client deposits the paid up share capital of €12,400 and sends Healy Consultants a certificate of deposit and bank statement;
- Healy Consultants submits a detailed business application to the Ministry of the Economy and Foreign Trade including i) a copy of the shareholders’ and directors’ diplomas and resumés ii) a certificate of non-bankruptcy or a sworn statement of solvency iii) documentary evidence of the applicant’s respectability, e.g., a police report and iv) the draft articles of association;
- The Ministry of Middle Classes issues business licenses for all Luxembourg companies. If required, Healy Consultants will approach this Ministry of behalf of our Client;
- If required, the commercial license is issued by the Luxembourg Ministry of the Economy and Foreign Trade. If required, Healy Consultants applies for a financial services license from the “Commission de Surveillance du Secteur Financier” (CSSF);
- Subsequently, Healy Consultants assists our Client register for VAT and a corporate tax ID at the Administration de l’Enregistrement et des Domaines;
- Healy Consultants submits an application to the Company Registry Office and receives a Company Incorporation Certificate from the Ministry of Commerce. The Trade and Companies Register then arranges for the publication of the incorporation deed in the Official Gazette within 2 months of the company’s incorporation;
- Following engagement completion, Healy Consultants couriers a full company kit to our Client, including original Luxembourg corporate documents, unopened bank correspondence and a Client feedback survey.
Interesting facts about Luxembourg
- In March 2010, the Sunday Telegraph reported that most of Kim Jong-Il’s US$4 billion in secret accounts was in Luxembourg banks;
- The country is widely used in corporate structuring for cross-border investments, but due to its place in Europe’s political environment it must constantly adapt its tax legislation to avoid conflict with the tax authorities of other EU countries. For example, the classic tax exempt Luxembourg 1929 Holding Company was outlawed on 31st December 2010. The regime was held to be an illegal state aid by the European Commission. The European Commission is now investigating further allegations of Luxembourg state aid in the form of private tax deals with international companies;
- The government of Luxembourg has successfully attracted many start up companies; eBay, Amazon and Skype are just three technology companies to have moved their European headquarters to Luxembourg;
- The most significant part of the Grand Duchy’s economy is its flourishing financial sector, which comprises more than 200 banks, 1,900 investment funds and 20,000 holding companies;
- The population of the Grand Duchy is of approximately 449,000. The Luxembourgers are generally fluent in French, German and English in addition to their mother tongue, Luxembourgish;
- In 1867 Luxembourg gained independence from Germany and organized itself as a constitutional monarchy with the legislative power vested in a democratically elected parliament. The legal system is based on the Napoleonic code and is therefore similar to the Belgian and French legal systems;
- Luxembourg is an EU member with a stable government, economy and legal system and therefore portrays a positive image to Clients, suppliers and investors;
- Foreign employees working full time in Luxembourg often feel “bored” because of the lack of intellectual entertainment in the country.
- Can I register a Luxembourg company with a sole shareholder and director?
Yes, the process of setting up a limited company in Luxembourg allows the appointment of a sole director and shareholder. If you are interested in registering a single-person company in Luxembourg, refer to this dedicated proposal breakdown section.
- What are the steps required to register a company in Luxembourg?
Without personal travel, Healy Consultants Group PLC will be happy to prepare a detailed project plan during the initial engagement phases for our Clients, outlining the steps required to incorporate a business in Luxembourg. For a preliminary step-by-step guide to setting up a business in Luxembourg, visit our dedicated guide
- Can you assist with intellectual property vehicle registration in Luxembourg?
Yes, our dedicated team will be happy to guide our Clients on how to set up a business in Luxembourg structured to hold intellectual property. To contrast how Luxembourg measures to other prime destinations for IP business registration, refer to this detailed comparison table.
- How much do I need to invest to register a company in Luxembourg?
The minimum share capital required to register a Luxembourg SARL is €12,395, divided into shares of at least €25. To register a societé anonyme in Luxembourg, the minimum capital contribution is €31,987. The shares of an SA may be split into shares of no par value, or shares with a par value of at least €1.24.
- Is a resident director required in order to do business through a company registered in Luxembourg?
Yes. Companies registered and operating in Luxembourg require a business permit must be managed by a director resident in Luxembourg. If our Clients register a company in Luxembourg but make no sales, then no resident director is required.
- Is the Luxembourg company registry searchable?
Yes, the public may freely search the commercial register in Luxembourg after signing up for an account online. However, the website is available only in French and German.
- Can I set up a SARL in Luxembourg with a corporate director?
Yes, a company or other legal entity may be appointed as the director of a Luxembourg company, whether a SARL or an SA.
- Is a Soparfi or an IP holding company different from a SARL or an SA?
No. The Soparfi and IP holding company regimes are tax rules, rather than a different form of legal entity. Both SAs and SARLs may be used as a Soparfi or IP holding company.
- Where can I find more information about how to set up a company in Luxembourg?
Kindly refer to Healy Consultants’ page on how to set up a Luxembourg company.
- What other options are there for holding companies in Europe?
Healy Consultants has compared different low-tax holding companies in Europe here.
- If I want to incorporate a company in Luxembourg, do I need to visit the country?
No. Healy Consultants can legally incorporate your Luxembourg company without you needing to travel.
- What is the minimum number of directors required for a Luxembourg company?
A Luxembourg company requires a minimum of one director and corporate directors are allowed.
- Is a resident director required?
Only companies carrying on business in Luxembourg require a resident director. Holding companies, which do not require a business permit, do not need a resident director.
- What is the minimum number of shareholders required for a Luxembourg company?
A minimum of one shareholder is required.
- Are shareholder/director details available for public viewing?
- Is a Luxembourg company required to submit an annual tax return and/or financial statements?
A Luxembourg company is obliged to submit an annual tax return and/or financial statements. It is also required to have its accounts audited.
- How much tax does a Luxembourg Company pay?
- Luxembourg trading company
A Luxembourg SA or SARL that qualifies as a trading company pays 21% corporation tax on global income exceeding €15,000 (US$21,700) and 20% corporation tax on global income below that amount. However, tax relief is available via the double taxation treaties Luxembourg signed with more than 60 countries.
In addition to corporate tax, a Luxembourg trading company pays a Municipal Business Tax (ICC) ranging between 6% to 12% percent depending on location, which is levied on taxable income above €17,500 (US$25,300). Capital gains realised by the Luxembourg trading company is treated as ordinary income and is taxed accordingly.
- Societe de Gestion de Patrimoine Familial (SPF)
Although it pays no corporate tax, an SPF is subject to an annual subscription tax of 0.25% on debts exceeding eight times the paid up capital, up to a maximum of €125,000 (US$166,000) per year.
An SPF is subject to Luxembourg corporate tax and wealth tax if in a year it derives (for more than 5% of its total dividend income) dividends coming from non-listed foreign companies which are not subject to an income tax comparable to the standard Luxembourg corporate income tax rate.
There is a withholding tax of 15% on dividends paid to non-resident shareholders, unless reduced because of the double tax agreements signed by Luxembourg and other states.
- Luxembourg trading company
- Does a Luxembourg company benefit from Double Taxation Treaties?
Yes. Luxembourg has signed Double Taxation Treaties with more than 60 countries including China, France, Germany, Italy, Japan, the Netherlands, Singapore, Spain, the UK, and USA.
- Can I register a Luxembourg company with a sole shareholder and director?
Useful links for LuxembourgGovernment and public authority websites:
- Luxembourg Tax Authority
- Luxembourg Company Registrar
- Central Bank of Luxembourg
- Luxembourg Stock Exchange
- Investment Authority
- Chamber of Commerce
- Luxembourg airports
- Visiting Luxembourg
- PWC- Income tax 2013
- Deloitte – Taxation and Investment 2013
- Banking in Luxembourg
- The Luxembourg Nationality Law
- EUDO Citizenship Observatory
- Luxembourg Employment Law
- Luxembourg Insurance Law
- PWC – Banking in Luxembourg 2014
- Tax Justice – Financial Secrecy Index 2013
- PWC – Setup in Luxembourg
- BDO – Doing business in Luxembourg 2013
- Why Luxembourg? A unique location to expand your business
- Invest in Luxembourg
- Luxembourg aiming to be European financial hub for Chinese RMB
- Why Luxembourg?
- Euronews – end to banking secrecy in Luxembourg
- Deloitte – The Luxembourg banking industry
- Why Luxembourg is the best place to invest offshore from
- Jean-Jacques Rommes – Luxembourg business out of regulation
- Luxembourg as a future Clean Tech hub
- Luxembourg, a dedicated pharma and healthcare hub
- Luxembourg – The Tax Haven Revamps its Image