Luxembourg Company Formation & Taxation FAQ | Expert Guidance by Bris Group

Are you considering expanding your business to Luxembourg? Bris Group specializes in seamless company formation services in Luxembourg, one of Europe’s most attractive and business-friendly jurisdictions. Our comprehensive FAQ provides valuable insights into the process, requirements, and benefits of establishing a company in Luxembourg, helping entrepreneurs and investors make informed decisions.

Luxembourg is renowned for its strategic location, robust financial sector, and favorable legal environment, making it an ideal destination for international business. Whether you’re interested in setting up an S.à r.l., S.A., or holding company, our expert team at Bris Group guides you through every step of the formation process — from choosing the right legal structure to registering your business and ensuring compliance with local regulations.

This FAQ covers essential topics such as the necessary documentation, minimum capital requirements, tax advantages, and the timeline for company registration in Luxembourg. We also address common questions about ongoing compliance, banking setup, and the benefits of Luxembourg’s double taxation treaties and stable economic climate.

At Bris Group, we are committed to providing tailored solutions that meet your specific business needs. With years of experience in Luxembourg company formation, our team ensures a smooth, efficient, and compliant setup process, allowing you to focus on growing your business. Explore our FAQ to discover how Luxembourg can serve as a strategic hub for your international expansion, and contact us today for personalized assistance.

Frequently Asked Questions About Luxembourg Company Setup

Looking to establish a company in Luxembourg? Our Luxembourg Company Formation FAQ provides essential information for entrepreneurs and investors seeking a reliable European business hub. Discover the key benefits of setting up in Luxembourg, including favorable tax regimes, flexible legal structures, and a strategic location in Europe. Learn about the registration process, required documentation, minimum capital, and ongoing compliance. Bris Group offers expert guidance to simplify your company formation journey in Luxembourg, ensuring a smooth and compliant setup. Explore our FAQ to get answers to your questions and start your international expansion today.

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🇱🇺 Luxembourg Company Formation FAQs

1. What is a Luxembourg company?

A Luxembourg company is a legal entity incorporated under Luxembourg Company Law, providing a stable European jurisdiction for international business, investment holding, and wealth management. Learn more on our Luxembourg company formation page.

2. What types of companies can be formed in Luxembourg?

Common structures include:

Sàrl (Private Limited Liability Company) – suitable for SMEs
SA (Public Limited Company) – ideal for large corporations
SCA (Partnership Limited by Shares) – for investment purposes
SCS or SCSp (Partnerships) – often used for private equity and funds

3. Who can incorporate a company in Luxembourg?

Both residents and non-residents can form a company. There are no nationality restrictions for directors or shareholders, making Luxembourg highly attractive for foreign investors.

4. How long does Luxembourg company registration take?

Registration generally takes 5–10 business days, depending on the company type and submission of all necessary documentation to the Registre de Commerce et des Sociétés (RCS).

5. What documents are required for incorporation?

Passport copies of shareholders and directors
Proof of address
Articles of Association
Confirmation of share capital deposit
Application forms submitted to the RCS

6. What is the minimum share capital?

Sàrl: €12,000
SA: €30,000
SCSp/SCS: flexible, depending on the partnership agreement

7. Do I need a local director?

Luxembourg allows non-resident directors, but companies must maintain a registered office in Luxembourg.

8. Can a Luxembourg company hold international assets?

Yes. Luxembourg is widely used for global asset management, intellectual property holdings, real estate, and investment funds.

9. Is physical presence required?

Not for incorporation. Remote registration is possible through a licensed fiduciary or legal representative, ideal for non-resident investors.

10. How private is ownership in Luxembourg?

While director and shareholder information is filed with the RCS, beneficial ownership is confidential and accessible only to authorized authorities, ensuring strong privacy protections.

11. Can a Luxembourg company open bank accounts internationally?

Yes. Companies can open accounts in Luxembourg, EU banks, or global financial institutions, facilitating cross-border operations and multi-currency management.

12. What are the annual compliance requirements?

Companies must:

File annual financial statements
Submit tax returns
Maintain statutory accounting records
Pay annual registration fees

13. Can a Luxembourg company be wholly owned by another company?

Yes. Corporate shareholders are allowed, making Luxembourg ideal for holding structures and international group companies.

14. How can a Luxembourg company be dissolved?

Companies can be voluntarily dissolved through a shareholder resolution, settling all debts and tax obligations, and filing the deregistration forms with the RCS.

15. Why choose Luxembourg for company formation?

Luxembourg offers political stability, EU market access, favorable tax regimes, and robust legal frameworks, making it a top choice for international businesses and investment structures. Explore more on our Luxembourg company formation page.

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💰 Luxembourg Company Taxation FAQs

1. What is the corporate tax rate in Luxembourg?

The standard corporate income tax rate is 17%, plus municipal business tax (up to 6.75%), resulting in an effective rate of approximately 24–26%.

2. Are retained earnings taxed?

Yes. Retained earnings are taxed at the standard corporate rate, but Luxembourg offers tax incentives for reinvested profits, including IP income exemptions and participation exemptions.

3. Are dividends taxed in Luxembourg?

Dividends paid to non-residents may be subject to withholding tax at 15%, which may be reduced or exempted under double taxation treaties or EU directives.

4. How are capital gains taxed?

Capital gains on the sale of subsidiaries or qualifying shares may be exempt under the participation exemption regime, particularly for EU investments.

5. Is VAT applicable in Luxembourg?

Yes. Standard VAT rate is 17%, with reduced rates of 8% and 3% for certain goods and services.

6. Are there double taxation agreements (DTAs)?

Luxembourg has a comprehensive network of DTAs, allowing businesses to avoid double taxation and optimize cross-border operations.

7. Are holding companies taxed differently?

Yes. Luxembourg holding companies benefit from participation exemptions on dividends and capital gains from qualifying subsidiaries, ideal for international investment structures.

8. Are payroll and social security taxes required?

Employers contribute 12–14%, while employees pay up to 12%, depending on income and contribution type, covering social security and health insurance.

9. Are there incentives for intellectual property or R&D?

Yes. Luxembourg provides IP regimes and R&D incentives, reducing the effective tax burden on patents, software, and innovation-based income.

10. How are transfer pricing rules applied?

Luxembourg follows OECD guidelines, requiring arm’s length pricing for transactions between related parties.

11. Can foreign companies establish branches without forming a local company?

Yes. Foreign entities can establish branches, which are subject to local taxation on income generated in Luxembourg.

12. Can losses be carried forward?

Yes. Losses can generally be carried forward for up to 17 years, reducing future taxable profits.

13. How are non-resident companies taxed?

Non-resident companies are taxed only on Luxembourg-source income, including branch profits, dividends, and property income.

14. Does Luxembourg allow EU tax directive benefits?

Yes. Companies benefit from Parent-Subsidiary and Interest & Royalties directives, minimizing withholding taxeswithin the EU.

15. Why is Luxembourg ideal for international tax planning?

Luxembourg offers competitive tax regimes, EU compliance, holding company structures, and robust financial infrastructure, making it a leading jurisdiction for global businesses and investment planning. More details are on our Luxembourg company formation page.

Interested in setting up a company in Luxembourg?
Visit our Luxembourg Company Formation page for detailed guidance, packages, and expert support tailored to your needs.

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