10 steps to incorporating in Luxembourg
- 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.
Frequently asked questions
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?Yes.
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.
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.