Accountants and company formation in Luxembourg

Setting up a company in Luxembourg

To set up a company in Luxembourg from abroad, the usual vehicle is an SARL or an SA: a notary records the articles, the capital sits in a blocked bank account until the deed is signed, and the company is filed with the Trade and Companies Register (RCS). A business permit from the Ministry of the Economy, the beneficial owner filing and VAT registration complete the picture before the company trades.

The usual sequence for an SARL or SA:

1. Choose the legal form and check the name with the RCS.
2. Apply for the business permit if the activity needs one, as most regular economic activities do.
3. Open a bank account in the company’s name and pay in the capital, which the bank blocks until formation.
4. Sign the articles before a notary, who registers the deed and files it with the RCS.
5. File the beneficial owners with the RBE and register for VAT with the AED.
6. Set up bookkeeping for the yearly accounts, tax returns and VAT returns.

Can non-residents own and run a Luxembourg company?

Yes. The Guichet.lu pages on the SARL and the SA set no nationality or residence condition for shareholders or managers. An SA can be formed by one or more natural or legal persons, so a foreign parent company can own it outright. An SARL can be run by managers who need not be shareholders, and a legal person may act as manager.

Where you live starts to matter elsewhere. The business permit is granted to a manager who runs the business effectively and is physically present, which a founder living abroad may not be able to promise. The SARL-S is open only to natural persons. And a founder from outside the EU who wants to live and work in Luxembourg needs a residence permit of their own, which is a separate file; the firms listed for residency and visas in Luxembourg handle it.

One more check applies to investors from outside the EU. A foreign direct investment that gives control of a Luxembourg entity active in a critical sector, such as energy, transport, health, data processing or finance, must be notified to the Minister of the Economy before completion. Control includes passing 25% of the voting capital.

SARL, SARL-S, SA or branch: choose the legal form

These four structures are the usual starting point for a foreign project.

SARL. Under article 710-5 of the law of 10 August 1915 on commercial companies, the share capital of an SARL must be at least €12,000, and the parts must be fully paid up when the company is formed. The Guichet.lu page on the SARL puts the number of shareholders between 2 and 100 and allows a single-member SARL. It is the common choice for operating companies and subsidiaries.

SARL-S. The simplified SARL takes a capital between €1 and €12,000. Only natural persons may hold its shares, and one person may be a partner in just one SARL-S at a time. It can be formed by private deed, without a notary, but its founders must first obtain a business permit, and a capital above €12,000 means changing the legal form. It suits a sole founder starting a trade, not a holding owned by another company.

SA. Article 420-1 of the same law sets the SA’s minimum capital at €30,000, fully subscribed, with each share paid up by at least a quarter. Its board has at least three directors, unless the company has a single shareholder. Larger SAs appoint an approved statutory auditor (réviseur d’entreprises agréé); smaller ones appoint one or more internal auditors (commissaires aux comptes). It suits groups that plan to bring in outside investors.

Branch. A branch is part of the foreign company, not a new legal person. Luxembourg branches of foreign companies file annual accounts with the RCS, and the foreign company answers for the branch.

Luxembourg also has holding and investment structures, such as the SOPARFI, the SPF, partnerships like the SCSp and securitisation vehicles. Their tax and regulatory rules go beyond a first company, so treat them as a matter for specific advice.

Step 1: The name and the business permit

Start with the name. A new company needs a name that clearly distinguishes it from others, and you can ask the RCS for a certificate that the name is free.

Then the permit. Most regular economic activities need a business permit issued by the General Directorate for SMEs of the Ministry of the Economy. It is granted when:

• the manager has professional integrity and, for regulated activities, the required qualification;
• the business has an establishment in Luxembourg, a physical base suited to the activity;
• the permit holder manages the business effectively, is physically present and is its owner or legal representative;
• tax and business obligations have been met in the past.

The application runs online through MyGuichet.lu with a LuxTrust product, and the stamp duty is €50. The ministry usually decides within three months of a complete file; if it has not answered by then, its silence counts as a tacit authorisation. For an SARL-S the permit comes before formation. For other forms the final grant needs the articles filed with the RCS, so the two run side by side.

Chartered accountants, accountants and other liberal professions have their own permit pages on Guichet.lu, with qualification rules for each.

Step 2: Pay in and block the share capital

The capital goes into an account opened in the name of the company in formation, on the basis of the draft articles. The bank keeps the account blocked for all transactions until the company exists and issues a blocking certificate, which you hand to the notary.

After the deed is signed, the notary gives you a release certificate. The bank frees the money once it has that certificate, the final articles and the information on the beneficial owners. Guichet.lu recommends a bank established in Luxembourg to keep this simple, although foreign banks are allowed.

Banks run know-your-customer checks before they open any account. Expect questions on the shareholders, the directors, the business and the source of the funds, and contact the bank early, since a slow account opening holds up the notary.

Step 3: Sign the articles before a notary

The articles of an SARL, SA, SE or SCA must be drawn up before a notary. They state the name, form, purpose, share capital, registered office, duration, the partners and the managers with their powers.

The deed is written in French or German. English is accepted if a French or German version goes with it, and that version prevails in case of a discrepancy unless the parties agree otherwise. Within 15 days of signature, the notary registers the deed with the AED.

A founder who cannot attend usually signs a power of attorney for a representative. Plan time for the notary’s identity checks and for any certification or translation of foreign documents.

Step 4: Registration with the RCS and publication in the RESA

The deed is lodged electronically with the RCS no later than one month after signature, and the RCS publishes it in the RESA, the electronic compendium of companies and associations. Publication happens on the filing day or on a date you choose within 15 days of filing, and third parties are bound only from publication. The registration records the name, legal form, registered office, purpose, date and duration, plus the capital and the directors where the form requires them.

The company also needs a registered office in Luxembourg. A company that uses a third party’s address and services for its seat must sign a written domiciliation agreement. Under the law of 31 May 1999 on the domiciliation of companies, only registered members of certain regulated professions established in Luxembourg may act as domiciliary: credit institutions and other professionals of the financial or insurance sector, lawyers, réviseurs d’entreprises and chartered accountants (experts-comptables).

Step 5: Beneficial owners and VAT

Every entity on the RCS files its beneficial owners with the RBE, the register of beneficial owners kept by Luxembourg Business Registers. The filing is online with a LuxTrust certificate, can be made by the company, its notary or another representative, and is due within one month. Any later change follows the same one-month rule.

VAT registration comes after the RCS. A taxable business sends its declaration to the AED within 15 days of starting its activity, with its constitutional documents in French or German and the identity documents of its partners and directors. The VAT number reads “LU” followed by eight digits. The turnover estimate in the declaration sets the return frequency:

• up to €112,000: an annual return only;
• from €112,000.01 to €620,000: quarterly returns plus the annual return;
• above €620,000: monthly returns plus the annual return.

The tax office decides the frequency in the end. Businesses whose yearly turnover has not exceeded €50,000 can be exempt from charging VAT, though they still report their turnover.

How a Luxembourg company is taxed

Corporate income tax. In the tax administration’s example for a company in Luxembourg City, the corporate income tax rate is 16% from 2025, down from 17% in 2024. A contribution to the employment fund is added on top of it, and the municipal business tax applies at the rate of the municipality, 225% of the base in Luxembourg City. Together these give an overall rate of 23.87% in that example from 2025. Each municipality sets its own business tax rate, and the rates for 2026 were published in the Mémorial A on 11 December 2025. The example does not cover every case, so ask an adviser for your own figures.

Net wealth tax. Companies also pay a yearly net wealth tax of 5 per thousand on taxable wealth up to €500,000,000, and a minimum amount based on the balance sheet total applies to resident companies.

VAT. Luxembourg applies four VAT rates: a standard rate of 17%, an intermediate rate of 14%, a reduced rate of 8% and a super-reduced rate of 3%, each listed in an annex of the VAT law.

The structure of the group and any tax treaty with the founder’s home country shape the rest, so take advice before the deed rather than after.

Running the company after registration

The yearly calendar is fixed by law.

• Annual accounts. They are approved within six months of the end of the financial year and filed with the RCS within one month of approval. The balances follow the standard chart of accounts (PCN) unless the company uses IFRS, and the accounts are validated on the eCDF platform before filing.
• Tax returns. Corporate income tax, municipal business tax and net wealth tax returns each year, plus VAT returns at the frequency the AED sets.
• Register changes. New managers, a new registered office or a change of capital are filed with the RCS, and changes of beneficial owners with the RBE within one month.
• Payroll. Once the company hires, it registers as an employer and runs payroll.

Bookkeeping and returns often go to an expert-comptable. The Guichet.lu page on chartered accountants lists tax advice and tax returns among their activities, and their registration with the Order of Chartered Accountants (OEC) is compulsory.

Mistakes foreign founders make

• Leaving the business permit to the end. The permit needs a manager who runs the business on site; without one, the company can be formed and still not trade.
• Choosing an SARL-S for a group subsidiary. Only natural persons may own it.
• Opening the bank account late. The notary needs the blocking certificate, and know-your-customer checks take time.
• Sending documents in English only. The deed and the VAT file need French or German versions.
• Missing the one-month RBE filing. It applies from registration and after every change of owner.
• Using an address without a domiciliation agreement. The domiciliary must belong to one of the regulated professions in the 1999 law.

Finding a firm to set up a company in Luxembourg

Accountanty lists 119 firms in Luxembourg: 79 accounting firms and 40 corporate services providers. Of them, 110 offer company formation and 47 focus on foreign clients; 88 work in English, 77 in French and 31 in German. 91 of them are based in Luxembourg City, and three each in Senningerberg, Strassen and Bertrange. If you would rather work in Italian, see the Italian-speaking accountants in Luxembourg, and the accountants for foreign clients page lists firms used to owners abroad.

How to compare fiduciaires, domiciliation agents, notaries and chartered accountants, and what their quote should contain, is explained on company formation in Luxembourg. After formation, firms listed for accounting, VAT, payroll, corporate secretarial work and bank account assistance take on the ongoing work. Start-ups can also look at the programmes of Luxinnovation, the national innovation agency. One free quote request, reviewed by Accountanty and forwarded to suitable firms, is a simple way to set up a company in Luxembourg with offers you can compare.