Steps for Setting Up a Company in Luxembourg

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Luxembourg is now one of the leading choices for promoters and investors because of its progressive and adaptive attitude. In the heart of Europe, it’s an ideal location to set up new businesses or expand your current company. It is also rather attractive as the process for residences and foreign investors is relatively straightforward.

The Procedure

There are several principal steps that you need to follow:

  • Decide on the company name
  • Open a bank account or Contribution in Kind
  • Choose the correct type of company you wish to set up

While there are many types of companies that can be formed, the two main ones are a Limited Liability Company (SARL) and a Public Limited Company (SA). There are quite similar except for the minimum capital. A SARL requires 12,000€ minimum capital while a SA requires 30,000€

  • Preparing the Articles of Association
  • Due Diligence/AML

The Articles of Association are the necessary papers related to your company. Due diligence is performed by the service providers. It is carried out on all of the shareholders, directors, and beneficial owners.

  • Proxy for the Notary

Shareholders must sign a proxy in order to be represented at the notary act.

  • Appointment with the Notary

Here, the registration and publication of the Articles of Association will be carried out. The notary act will be signed by a notary, and the Articles of Association are registered and entered into the Commercial Registry.

  • Apply for a VAT number if necessary
  • Time frame

Incorporating a company can be done in as little as a few days.

  • Trade licence

In some cases, a trading certificate is needed. Medium-sized businesses can apply for one from the Ministry once the company has been formed. As a rule, once the company has been certified by a notary, it has the full legal capacity and therefore doesn’t have to wait for entry or publication in the Commercial Registry.

The Law of 2 September 2011 regulates the right to start commercial activities, skilled craft trades and some specific professions (professions liberals). They will require a business permit. The business permit will only be granted if there is a physical installation in Luxembourg. The installation must be appropriate for the nature and size of the activity that will be carried out.

  • Costs associated with business formation

 The cost of forming a business starts at 5000€

  • Legal advice

 Luxembourg has a high level of English proficiency and if necessary, you shouldn’t have a problem finding legal advice in English. When you are searching for advice, make sure the company offers the following services:

  • Advice and help on company incorporation
  • Drafting of the Articles of Association
  • Communicating with the relevant authorities and the notary
  • Trade license
  • Company registration with the Tax Authorities in Luxembourg

If this is your first time registering and setting up a business, it might all seem rather overwhelming. That being said, you will find the process relatively straightforward once you begin. Don’t rush into anything and make sure each step is carried out correctly before trying to move onto the next.