Frequently Asked Questions
The steps of creation will be different depending on the activity carried out.
To help entrepreneurs in their reflections, the Luxembourg government has created a step-by-step summary on the Guichet.lu website. You will find useful information on business licenses, the steps of creation and the differences between the different forms of businesses.
Always doubts or questions, our team can help you in all these steps.
Companies or individuals wishing to exercise a professional economic activity must obtain a business license.
This business license is required for a commercial activity (e.g.: retail, Horeca), a craft activity (e.g.: food, construction, art) or certain liberal professions (e.g.: geometer, architect, engineer).
There are also other types of prior authorizations for other professions (e.g., doctors, dentists, lawyers).
A business license is required? If yes, everything will depend on how quickly the file is processed with the Ministry of the Economy. Is your file complete? Does the company have a suitable fixed place of business? etc.
If your file is complete and if it meets the conditions, the time to obtain the business license can take up to 4 months. However, the usual delay is more likely to be around 1.5 months.
After reception, the company can be established within approximately 2 weeks.
If the company does not need a business license, then it can be incorporated within one month.
For companies which need to be incorporated in front of the notary, the costs can be estimated between EUR 1,000 and EUR 1,200 (including notary fees for various documents and various stamps and miscellaneous costs).
For companies that do not require an incorporation in front of the notary (example a Sàrl-S), and if no assistance from an advisor is required, the cost to constitute the company is very low and can be estimated at around EUR 200.
In addition, we offer a global assistance in the various steps of setting up a company. This includes assistance for the definition of the project, the choice of the form of company, the drafting of the business plan, support with the notary and banks as well as assistance for the application of a business license. You can benefit from our incorporation package for your public limited company (SA) or private limited liability company (Sàrl) at EUR 1,000 (excluding VAT and notary fees).
This is not an easy question because there is no right or wrong answer. Everything will depend on the activity, objectives, risk management and development perspectives.
Each form has its advantages and disadvantages in terms of cost, risk management, development, …
Because each case is unique, do not hesitate to ask us for a free, non-binding first meeting to discuss your project with us.
The SPF is an investment company intended only for natural persons acting within the framework of the management of their private assets and whose activity must be limited to the acquisition, holding, management and realization of financial assets, excluding any commercial activity.
The SPF is not subject to Luxembourg income tax or wealth tax. However, it is liable for the subscription tax.
This special regime may be of interest in the context of estate planning or for the management of financial assets.
The SCI is a type of company mainly used to hold real estate assets. However, it can also be used for holding financial or movable assets, excluding any commercial activity.
The SCI is not subject to Luxembourg income tax or wealth tax. This type of company is tax transparent, i.e. the partners of the SCI will be taxed directly.
The SCI in Luxembourg does not have a minimum capital requirement and may be incorporated under private seal or in front of a notary.
The statutory auditor can be found in public limited company (SA) or private limited liability company (Sàrl and Sàrl-S) and partnerships limited by shares (SCA).
The statutory auditor is appointed for a period of up to 6 years and has a role of monitoring and controlling the company. The latter must also report to the shareholders or associates the absence of publication of accounts, losses exceeding more than half of the share capital or the absence of a management body.
Finally, the statutory auditor cannot interfere in the management of the company. However, its liability to third parties or the company is similar to the one that managers or directors has.
The number of required statutory auditors depends on the form of the company, it will be:
- 1 statutory auditor for the public limited company (SA).
- 1 statutory auditor for the private limited liability company (Sàrl) and Simplified private limited liability company (Sàrl-S) with more than 60 partners (otherwise no statutory auditor required).
- At least 3 statutory auditors organized under a supervisory board for the partnerships limited by shares (SCA).
The statutory auditor will be replaced by an independent auditor if the company is no longer considered as a small company based on the criteria defined by the law.
Do you need to appoint an auditor or a liquidator? WAT Fiduciary brings you all its expertise.
An independent auditor must be appointed by the general meeting of the shareholders/partners when the company is no longer considered as a small company based on criteria set by the law.
The independent auditor is not, unlike the statutory auditor, an organ of the company and must be independent of the latter.
Its role is to give an opinion on the financial statements and the management report as to their accuracy and compliance with legal requirements. His role is not to monitor the affairs of the company, unlike the statutory auditor.
Finally, an independent auditor is also required when the company must prepare consolidated accounts.
Currently, the 4 VAT rates applicable in Luxembourg are as follows:
- 17% – standard rate – all that is not included in other rates
- 14% – intermediate rate – wines 13 ° or less, solid mineral fuels, custody and management of securities, credit management, etc…
- 8% – reduced rate – Gas, electricity, firewood, hair styling, heat supplied by the heating network, plants, etc…
- 3% – super-reduced rate – food products (except alcoholic beverages), books and newspapers, water supply, catering services (except alcohol), passenger transport, …
Do not hesitate to ask your chartered accountant for advice on the VAT rate to apply.
The net wealth tax (“Impôt sur la fortune”) in Luxembourg is a tax which affects SA, Sàrl, SCA as well as SE and which is determined based on the company’s assets and not on its results.
In addition, since January 1, 2016, a minimum net wealth tax is applied depending on the activity of the company and its total balance sheet. It ranges between EUR 535 and EUR 32,100.
Finally, companies liable to net wealth tax can reduce it by setting up a five-year reserve equivalent to 5 times the amount of the desired reduction (subject to conditions).
Do not hesitate to request a tax simulation before the end of your fiscal year from our team.
As of January 1, 2020, the overall corporate income tax rate is 22.80% for the municipality of Luxembourg.
This is to be divided into two elements:
- The corporate income tax which amounts to 16.05% (15% + 7% contribution to the fund for employment).
- The municipal business tax which varies according to the municipalities. It is 6.75% for the municipality of Luxembourg.
Note that a company may be subject to different municipal business tax rates if it operates in several municipalities.
A parent company must prepare consolidated accounts if it has the majority of the voting rights in its subsidiary or if it controls it by another means (possibility of appointing or revoking the members of the management or supervisory body, or through an agreement with the other shareholders).
This obligation applies to public limited company (SA), private limited liability company (Sàrl and Sàrl-S), partnerships limited by shares (SCA) as well as to some general partnership (SNC) and limited partnership (SCS).
Insurance and reinsurance companies as well as credit institutions are exempt.
Our team prepares the consolidation package for you, determines the consolidation methods, prepares the consolidated accounts and assists you in the audit process.
There are 3 main possible exemptions.
Small group exemption, sub-group exemption (consolidation at a higher level), temporary holding exemption (holding for the purpose of subsequent disposal).
The consolidation exemption applied must be indicated in the annual accounts of the Luxembourg parent company.