Opening of the company in Luxembourg

GLS Law Company Services: Company Formation in Luxembourg

The Grand Duchy of Luxembourg is a small country with one of the highest living standards in the world, offering excellent conditions for business. Being a part of Benelux, the European Union, and the Schengen Area, it provides various advantages to entrepreneurs, including access to the EU internal market. If this jurisdiction interests you, the experts at GLS Law Company can help you swiftly and correctly open a company in Luxembourg, providing support at all service stages.

Advantages of Company Registration in Luxembourg for Businessmen

Many entrepreneurs turn their attention to Luxembourg due to its status as a financial center for thousands of investment funds and its broad opportunities for other business types. Let’s delve deeper into the advantages this state offers from a business perspective:

• Luxembourg offers numerous opportunities for companies involved in asset saving and management through funds and trusts.
• The country has a corporate tax rate starting from 15%. Depending on the legal form, some companies may qualify for tax incentives.
• The jurisdiction is known for its stable economy and openness to foreign investments.
• Luxembourg’s central location in Europe provides convenient access to EU markets, excellent transport infrastructure, and connections with other European countries.
• As the second country in the world by GDP per capita, Luxembourg creates a favorable environment for entrepreneurs, with a high demand for goods and services.

Legal Forms for Business Registration in Luxembourg

Entrepreneurs typically choose between two legal business forms when opening a company in Luxembourg — SA and SARL. Each has its unique features and advantages, so let’s explore them in more detail.

Public Limited Company (SA)

• The minimum share capital is €31,000, with 25% required to be paid up at company formation.
• Shares can be issued as either registered or bearer.
• The company must have at least 3 directors (individuals or legal entities) of any residency, with at least one being a physical person and resident of Luxembourg.
• At least 2 shareholders are required (individuals or legal entities), without residency requirements.
• Nominee shareholders and directors are permitted.
• Information about directors and shareholders is publicly accessible.
• Companies must prepare annual financial statements and have a registered office within the country.

Companies undergo audits if they have:

• An annual turnover of over €4,600,000.
• Income of more than €2,300,000.
• Over 50 employees.

Private Limited Company (SARL)

• The minimum capital requirement is €12,500, fully paid at registration.
• Only registered shares are issued.
• The company needs at least one director, with no residency requirements.
• The company can have between 1 to 40 shareholders, including individuals and legal entities of any residency.
• Director and shareholder information is publicly available.
• SARLs must prepare annual financial reports and are not required to undergo audits.
• A registered office within the country is mandatory.

Taxation for Companies in Luxembourg

Doing business in this jurisdiction involves:

• Corporate tax from 15% (depending on taxable amount).
• Income tax for individuals at 45.78%.
• Profit tax from 6% (varies by city).
• VAT at a standard rate of 15%, with reduced rates of 3% or 6% for certain goods.

Luxembourg does not fall into the category of offshore jurisdictions, so offshore company formation is not an option. However, under certain conditions, various incentives can be expected. For instance, the standard dividend tax is 15%, but the rate can be reduced to 0% if dividends are paid to a parent company holding at least 10% of the subsidiary’s shares for a minimum of 12 months.

Submit a request on the GLS Law Company website if you’re looking to open a business in Luxembourg. Experts will provide a preliminary service price for business registration in this country and answer any questions during a personal consultation.