Business Startup in Luxembourg: The Right Way, From Day One
Set up a business in Luxembourg the right way. Your business vehicle, your registration pathway, your Luxembourg bank account. All coordinated from a single point of contact.
- SARL or SA company formation with notary coordination included
- Full RCS registration, business address, and statutory documents
- Luxembourg business bank account sourced and opened
Why Start a Business in Luxembourg and Why It Matters
1. Luxembourg Has One of the Strongest Business Environments in the EU
Luxembourg is known for its political stability, strong legal framework, and highly developed financial sector. As a founding member of the European Union, it offers businesses direct access to the EU single market and a trusted regulatory environment. International companies, investment firms, and entrepreneurs are attracted by its reputation for transparency, efficiency, and long-term economic stability.
2. The Tax Rates Are Competitive When Structured Properly
Luxembourg offers a well-established tax system supported by an extensive network of double tax treaties and international business agreements. While tax outcomes depend on the structure and activities of the company, many businesses benefit from efficient cross-border planning opportunities. Combined with a stable legal environment, this makes Luxembourg a popular choice for international groups and holding companies.
3. A Luxembourg Company Gives You Credibility Across the EU
A Luxembourg company is widely recognised by investors, banks, and business partners throughout Europe. The country’s reputation as a leading financial and business centre can enhance corporate credibility when expanding internationally. For many entrepreneurs, establishing a presence in Luxembourg helps build trust with stakeholders while providing a strong foundation for growth across European markets.
Business Permit Rules in Luxembourg: What Every Founder Must Know
Our specialists work together as a trusted advisor and legal counsel to ensure that you operate your business in Luxembourg in a legally optimal way.
Setting Up a Company in Luxembourg: A Clear Process from Start to Finish
A strategic, end-to-end approach to help your business establish, grow, and expand globally from Luxembourg to international markets.
Luxembourg and the UK:
Two Very Different Business Environments
LUXEMBOURG BUSINESS ENVIRONMENT
17%
Standard VAT Rate the Lowest in the EU
- 80+ double tax treaties worldwide
- EU member state with full single market access
- Participation exemption on qualifying dividends and capital gains
- 23.87% combined corporate tax rate in Luxembourg City
UK BUSINESS
ENVIRONMENT
25%
Corporate Tax Rate
- Additional dividend taxation may apply
- Post-Brexit loss of EU single market access
- Higher overall compliance burden
- No participation exemption equivalent for most structures
What Our Luxembourg Company Formation Service Covers
We assess your activity, shareholders, and goals to recommend the right vehicle: SArl, SA, SE, or branch, before formation begins.
We draft and execute your articles of association, coordinate the notary appointment, and file everything with the Registre de Commerce et des Societes.
We assess your sector, verify qualification requirements, and manage the autorisation d'etablissement application to the Direction generale des Classes Moyennes.
We handle your Luxembourg VAT number application, corporate income tax registration, and municipal business tax setup from the point of incorporation.
We identify the right institution for your structure, prepare your KYC documentation, and manage the account opening process end to end.
We provide a Luxembourg-registered address for statutory correspondence, RCS records, and regulatory filings.
We establish your annual accounts framework, bookkeeping structure, and filing calendar in line with Luxembourg statutory requirements.
Annual RCS filings, financial statements, corporate tax returns, and company secretarial support on a continuing basis.
Which Entity Type is Right for You?
A Luxembourg S.à r.l. requires a minimum share capital of €12,000, which must be fully subscribed and paid up at the time of incorporation.
An S.à r.l. may have between one and one hundred shareholders. Foreign investors can own 100% of the company, with no requirement for local shareholders or Luxembourg national participation.
The company must appoint one or more managers (gérants) to oversee operations. There is no mandatory Luxembourg residency requirement for managers.
Shares in an S.à r.l. are not freely transferable and generally require execution before a Luxembourg notary.
Ideal for founder-led businesses, consultants, professional services firms, trading companies, and holding structures.
€30,000, with at least 25% paid up at formation.
No minimum shareholder count for a single-member SA. Shares are freely transferable without restriction.
Board of directors or supervisory board required. Public disclosure of shareholders applies to registered shares.
Possible. The SA is the only Luxembourg vehicle that can list on a stock exchange.
Larger businesses, joint ventures, companies planning institutional capital raises, and businesses requiring formal governance or a future listing.
What Our Luxembourg Company Formation Service Covers
Phase 1 Includes
- Choosing the right company structure: SArl, SA, or SE
- Confirming share capital, shareholders, and management
- Drafting the articles of association and memorandum
- Verifying business permit requirements for your sector
- Confirming the registered office address in Luxembourg
A written formation plan, full document checklist, and clear cost summary before any work begins.
Phase 2 Includes
- Share capital deposit with a Luxembourg credit institution
- Execution of constitutional documents before a Luxembourg notary
- Filing with the Registre de Commerce et des Societes
- Obtaining your Luxembourg business identifier and VAT number
- Business permit application where required for your sector
Certificate of incorporation, RCS extract, registered articles of association, and your official Luxembourg company number.
Phase 3 Includes
- Luxembourg business bank account opening
- VAT registration if applicable to your activity
- Accounting and bookkeeping framework setup
- Social security registration if hiring employees
- Ongoing annual compliance and advisory support
A fully operational Luxembourg company with banking, VAT, and compliance foundations in place and ready to trade.
Is Luxembourg the Right Place to Set Up Your Business?
Thinking about expanding into Europe? Luxembourg gives businesses a trusted legal framework, investor confidence, and direct access to the EU market.
Suitability: Highly Suitable
Luxembourg's stable legal system, recognised company structures, and EU membership make it one of Europe's most respected business jurisdictions.
Suitability: Highly Suitable
A Luxembourg entity gives UK businesses a fully operational EU presence, single market access, and European client credibility.
Suitability: Suitable
Luxembourg entities are well-regarded by European fund managers and institutional investors, making them practical for early fundraising.
Suitability: Highly Suitable
The participation exemption, 80+ tax treaties, and EU access make Luxembourg one of the most used jurisdictions for international structures.
Suitability: Highly Suitable
Luxembourg's central location, treaty network, and EU membership make it a natural hub for cross-border trade and operations.
Suitability: Consider Carefully
Year-one costs run €8,000 to €20,000 and ongoing compliance €5,000 to €15,000. Without EU rationale, another jurisdiction may suit better.
FAQs: Starting a Business in Luxembourg
What is the corporate tax rate in Luxembourg?
The combined corporate tax rate in Luxembourg City is approximately 23.87%. This includes corporate income tax, solidarity surcharge, and municipal business tax. The exact rate can vary slightly depending on the municipality where your company is established. Compared with many Western European jurisdictions, Luxembourg remains competitive while offering strong legal certainty and access to the EU market.
What is the VAT rate in Luxembourg?
Luxembourg applies a standard VAT rate of 17%, which is the lowest standard VAT rate in the European Union. Reduced rates of 14%, 8%, and 3% apply to specific products and services. Businesses engaged in cross-border trade may also benefit from EU VAT rules and simplifications.
Are there tax advantages for holding companies in Luxembourg?
Yes. Luxembourg is one of Europe’s leading holding company jurisdictions. The participation of exemption regime, extensive double tax treaty network, and flexible corporate structures make it attractive for groups holding shares, intellectual property, or international investments. Proper structuring is essential to ensure compliance with substance and anti-avoidance rules.
Does Luxembourg have double taxation treaties with other countries?
Yes. Luxembourg has signed more than 80 double taxation agreements worldwide, including treaties with the UK, US, UAE, Canada, Australia, and most EU member states. These agreements help reduce withholding taxes and prevent the same income from being taxed twice.
Do foreign-owned Luxembourg companies pay tax on worldwide income?
Generally, Luxembourg resident companies are taxed on worldwide income. However, foreign tax credits, treaty relief, and participation of exemption rules can significantly reduce the effective tax burden depending on the company’s activities and structure.
How long does it take to register a company in Luxembourg?
Most companies can be incorporated within four to eight weeks. The timeline depends on factors such as document preparation, shareholder verification, bank account opening, and whether a business permit is required. Regulated sectors may take longer.
What documents are required to form a Luxembourg company?
You will generally need certified identification documents for shareholders and directors, proof of address, information on business activities, articles of association, and evidence of share capital where required. Additional documents may be requested depending on the ownership structure.
How much does it cost to set up a business in Luxembourg?
Formation costs vary based on the company type and complexity. For a typical SARL, first-year costs often range between €8,000 and €20,000, including incorporation, notary fees, registered office services, and compliance setup. Annual accounting and compliance costs are additional.
Do I need a local director or permit holder in Luxembourg?
A local director is not always legally required. However, many businesses appoint local management to strengthen corporate substances. Where a business permit is required, a qualified responsible person must typically be approved by the authorities.
What is the minimum share capital required in Luxembourg?
A SARL generally requires a minimum share of capital of €12,000, which must be fully subscribed at incorporation. Public companies (SA) require significantly higher capital. The appropriate structure depends on your business objectives and growth plans.
Can I open a Luxembourg company bank account remotely?
In some cases, yes. However, Luxembourg banks conduct strict compliance and due diligence checks. Shareholders and directors may need to attend meetings virtually or provide additional documentation regarding the source of funds and business activities.
Can a UK national form a company in Luxembourg?
Yes. UK nationals can establish, own, and manage Luxembourg companies without restrictions. Since Brexit, many UK businesses have chosen Luxembourg to maintain a stronger presence within the EU single market.
Do I need to relocate to Luxembourg to own and run a company there?
No. Company ownership and tax residency are separate matters. Many foreign entrepreneurs own Luxembourg companies while living elsewhere. However, management, substance, and tax residency rules should be carefully considered to avoid unintended tax consequences.
Does Luxembourg have a startup visa for non-EU nationals?
Luxembourg does not currently offer a dedicated startup visa. Non-EU entrepreneurs typically apply under self-employment or business-related residence permit routes. Eligibility depends on the applicant’s nationality, business plan, and economic contribution.
Can my Luxembourg company trade throughout the European Union?
Yes. Once established, a Luxembourg company can generally provide services and conduct business across the EU, subject to local licensing and regulatory requirements in specific industries. This is one of the main reasons international founders choose Luxembourg.
Why do startups and investors choose Luxembourg over other EU countries?
Luxembourg offers a combination of political stability, investor confidence, strong banking infrastructure, flexible corporate structures, and access to European markets. It is particularly popular among investment funds, fintech businesses, holding companies, and internationally focused startups seeking long-term growth.
