Luxembourg Company Formation

A Comprehensive Guide for Non-Residents to Register a Company  in Luxembourg

Luxembourg has long been recognized as a prestigious and attractive offshore jurisdiction for Luxembourg company formation. Its stable economy, favorable tax environment, and strategic location in the heart of Europe make it a popular choice for entrepreneurs and businesses looking to expand their reach. This guide provides an overview of forming a company in Luxembourg, specifically focusing on the advantages and considerations for non-residents.

Why Choose Luxembourg for Company Formation?

Luxembourg offers a compelling package for businesses, including:

• Political and Economic Stability: Luxembourg boasts a stable political climate and a robust, diversified economy.
• Favorable Tax Regime: While not a tax haven, Luxembourg offers various tax incentives and a competitive corporate tax rate, especially for holding companies.
• Strategic Location: Situated in the heart of Europe, Luxembourg provides easy access to major European markets.
• Skilled Workforce: Luxembourg has a highly educated and multilingual workforce.
• Strong Financial Sector: Luxembourg is a leading financial center with a well-developed banking system.
• Reputation: Luxembourg is a reputable jurisdiction with a strong legal framework.

Types of Companies Suitable for Non-Residents

Several company types are popular for non-residents seeking Luxembourg company formation:

• Société à Responsabilité Limitée (SARL): A private limited liability company, the SARL is the most common and flexible structure, requiring a minimum capital of €12,000.
• Société Anonyme (SA): A public limited liability company, the SA is suitable for larger ventures and requires a minimum capital of €30,000.
• Société en Commandite Simple (SCS): A limited partnership, offering flexibility in management and liability.
• Société en Commandite Spéciale (SCSp): A special limited partnership, often used for investment funds and private equity structures.
• SOPARFI (Société de Participations Financières): A holding company designed for managing and holding participations in other companies.

Advantages of Luxembourg Company Formation for Non-Residents

• Access to European Markets: A Luxembourg company provides a platform for accessing the European Union market.
• Tax Optimization: Strategic structuring can lead to significant tax advantages.
• Asset Protection: Luxembourg’s legal framework offers robust asset protection.
• Confidentiality: Luxembourg maintains a high level of confidentiality regarding company ownership.
• Ease of Doing Business: Luxembourg has a business-friendly environment with streamlined regulations.

Disadvantages of Luxembourg Company Formation for Non-Residents

• Higher Setup and Maintenance Costs: Compared to some other jurisdictions, Luxembourg can be more expensive to set up and maintain a company.
• Regulatory Compliance: Luxembourg has strict regulatory requirements that must be adhered to.
• Complexity: Navigating the legal and tax landscape can be complex, requiring professional assistance.
• Substance Requirements: Increasingly, Luxembourg authorities are focusing on substance requirements, meaning companies need to demonstrate genuine economic activity in Luxembourg.

What is Required for Luxembourg Company Registration?

The requirements for Luxembourg company formation vary depending on the chosen company type, but generally include:

• Company Name: A unique company name that complies with Luxembourg regulations.
• Registered Office: A physical address in Luxembourg.
• Shareholders: Details of the shareholders, including their identity and shareholding percentage.
• Directors: Details of the directors, including their identity and responsibilities.
• Articles of Association: A document outlining the company’s purpose, structure, and rules.

• Share Capital: The required minimum share capital, depending on the company type, must be deposited.
• Business Permit (if applicable): Certain activities require a specific business permit.
• Due Diligence Documentation: KYC (Know Your Customer) and AML (Anti-Money Laundering) documentation for all shareholders and directors.

Procedure for Luxembourg Company Formation

The process of Luxembourg company formation typically involves the following steps:

1. Consultation and Planning: Discuss your business goals and choose the most suitable company structure with a professional advisor.
2. Name Reservation: Reserve your desired company name with the Luxembourg Trade and Companies Register (RCS).
3. Drafting Articles of Association: Prepare the Articles of Association, outlining the company’s purpose, structure, and rules. This is a crucial step and should be handled by experienced legal professionals.
4. Capital Deposit: Deposit the required share capital into a blocked bank account in Luxembourg.
5. Notarization: The Articles of Association must be notarized by a Luxembourg notary.
6. Registration with the RCS: Register the company with the RCS, providing all required documentation.
7. Business Permit Application (if applicable): Apply for the necessary business permit if your activities require it.
8. VAT Registration: Register for VAT if your company will be engaging in taxable activities.
9. Publication in the RESA: The company’s formation is published in the Recueil Electronique des Sociétés et Associations (RESA), the official gazette.

Timeframe for Luxembourg Company Formation

The timeframe for Luxembourg company formation can vary depending on the complexity of the structure and the efficiency of the process. Generally, it takes approximately 2-4 weeks to complete the registration process, assuming all required documentation is readily available and there are no delays with the authorities. Obtaining a business permit, if required, can add additional time.

How We Can Help You with Our Professionals

Navigating the complexities of Luxembourg company formation can be challenging, especially for non-residents. Our team of experienced professionals can provide comprehensive support throughout the entire process, including:

• Company Structure Advice: Helping you choose the most suitable company structure based on your specific business needs and objectives.
• Name Availability Check: Ensuring your desired company name is available and complies with Luxembourg regulations.
• Drafting Articles of Association: Preparing legally sound and comprehensive Articles of Association.
• Assistance with Capital Deposit: Guiding you through the process of depositing the required share capital.
• Liaison with Notaries and Banks: Facilitating communication and coordination with notaries and banks in Luxembourg.
• Registration with the RCS: Handling the registration process with the RCS, ensuring all required documentation is submitted correctly and efficiently.
• Business Permit Application Assistance: Assisting with the application for any necessary business permits.
• VAT Registration: Guiding you through the VAT registration process.
• Ongoing Compliance Support: Providing ongoing support to ensure your company remains compliant with Luxembourg regulations.
• Tax Advisory Services: Offering expert tax advice to optimize your tax position.
• Accounting and Bookkeeping Services: Providing comprehensive accounting and bookkeeping services to manage your company’s finances.

By partnering with our experienced professionals, you can streamline the Luxembourg company formation process, minimize risks, and ensure your company is set up for success. Contact us today to discuss your specific needs and learn how we can help you achieve your business goals in Luxembourg. We are dedicated to providing tailored solutions and expert guidance to help you navigate the Luxembourg business landscape with confidence.