Company Registration in Luxembourg

Company Registration in Luxembourg

Luxembourg is a city in Western Europe. It shares land borders with Germany, Belgium and France. Due to different benefits offered here, investors would go for the process of Luxembourg company registration. This country is utilised by investors to restructure their foreign investments. Hence an investor would want to go for company registration in Luxembourg.

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  • Procedure for Luxembourg Company Registration
  • Documents required for Company registration in Luxembourg
  • Liaising with the regulatory authorities for Luxembourg company registration
  • End-to-End Support
Company Registration in Luxembourg

Luxembourg Company Registration- An Overview

Luxembourg is located in Western Europe and shares land borders with Belgium, Germany and France. The capital of Luxembourg is Luxembourg City. Luxembourg Company Registration process is quite straightforward; however, it is important to comply with the requirements of local law. Domestically incorporated holding companies are exempt from paying taxes. This would be applicable if the holding company owns more than 10% shares in a subsidiary company present in the EU for a period of 12 months.

This country is considered a popular place for investment funds and offshore funds. Many companies utilise this to reduce their overall tax advantage. There are no forms of restrictions on foreign companies to invest in Luxembourg. As per the World Economic Forum, Luxembourg is ranked as the top destination for competitiveness.

Out of the 27 member states, Luxembourg is one of the founding members. Hence, they have access to rights which are enjoyed across EU and in the Schengen market. A private equity firm formed in Luxembourg is exempt from the requirement of tax on income from bonds and other forms of equities.

There are different tax advantages which are offered in Luxembourg; hence an investor should consider Luxembourg Company Registration.

Benefits of Luxembourg Company Registration

The following are the benefits of Luxembourg Company Registration:

Benefits of Luxembourg Company Registration
  • Holding Company

    Domestically incorporated holding companies are exempt from paying taxes. This would be applicable if the holding company owns more than 10% shares in a subsidiary company present in the EU for a period of 12 months. Hence it would be beneficial to incorporate a holding company to enjoy the above benefits.

  • Financial Assets Company

    There are different forms of incentives related to tax by forming this type of entity. The Financial Assets Holding Company is also known as a SPF entity. This entity is exempt from all forms of taxation which includes corporation tax, withholding tax and any forms of capital gains tax. Hence family funds and HNI investments can utilise this form of entity to reduce their overall tax burden.

  • Founding Members of the EU

    Luxembourg is one of the founding members of the European Union. Hence, they have access to rights which are enjoyed across EU and in the Schengen market. It also enjoys other benefits which are offered in the Economic bloc of the EU.

  • Investment Funds and Offshore Funds

    This country is considered a popular place for investment funds and offshore funds. Many companies utilise this to reduce their overall tax advantage. This will reduce the overall tax burden of the investor.

  • No Foreign Investment Restriction

    The government is quite liberal in terms of foreign investment in the country. There are no restrictions in foreign investment in any areas. Hence this would attract more investors to invest in Luxembourg.

Eligible Business Structures for Luxembourg Company Registration

The following business structures can be utilised for Luxembourg Company Registration:

Eligible Business Structures for Luxembourg Company Registration
  • Private Limited Liability Company

    This entity is also known as Société à responsabilité limitée or S.à r.l. The principle of separate legal personality would be present with the shareholders and directors of the company. The manager would take responsibility to control the board of managers of the company. This form of entity is not allowed to offer its shares in a public stock exchange.

  • Public Limited Company

    This entity is also known as Société anonyme or S.A. The principle of limited liability would be applicable for the public limited company. The board of directors of the company would be appointed by the shareholders of the company. This form of entity is allowed to issue shares in a public stock exchange.

  • Special Limited Partnership

    This form of limited partnership is an entity which acts as an alternative investment fund for different forms of investors. This type of entity is known as Société en commandite spéciale or SCSp.

Minimum Eligibility Criteria for Luxembourg Company Registration

The following eligibility criteria must be sufficed for Luxembourg Company Registration:

Minimum Eligibility Criteria for Luxembourg Company Registration
  • Minimum Paid up Capital

    An applicant going for the process of Luxembourg Company Registration must have minimum paid up capital to form the company. The minimum paid up capital for forming the company us EUR 12,000. However, the requirement for a public company is more. A public company requires minimum of EUR 31,000 for forming a company.

  • Shareholders

    Shareholders have to be appointed as per the requirements of the company. For a private limited company, the number of shareholders varies between one to 100. For a public limited company, there is no maximum limit on the shareholders.

  • Directors

    The appointment of directors must be in accordance with the requirements of the respective law. Directors are appointed by shareholders. A public limited company must have minimum of three directors. A special limited partnership must have one general partner to run the partnership. For a private limited company, there has to be one director. There is no limit on the number of directors that run this company.

Procedure of Luxembourg Company Registration

The following procedure has to be adopted for Luxembourg Company Registration:

Private Limited Company

  • Before incorporating the company, the share capital of EUR 12,000 must be deposited in a corporate bank account in Luxembourg.
  • The bank will notify the notary that the applicant has issued the share capital for the company. A certificate with respect to this would be issued by the bank.
  • In the next step, the incorporation meeting will occur with the shareholders and the directors, drawing up the articles of association of the company. This meeting will occur at the notary.
  • After this, the notary will proceed to release the amount of share capital for going ahead with the process of company registration in Luxembourg.
  • All the documents which include the incorporation deed, memorandum of association and articles of association would be filed with the Luxembourg Registrar of Companies (Registrar of Companies and Commerce). This has to take place within one month.
  • Details of the incorporation would be published in the Official Gazette. This gazette is an electronic gazette which is known as the Recueil Electronique des Sociétés et Association.
  • No other compliance is required once this company is formed. The company comes into existence through the notary meeting.

Public Limited Company

The procedure of Luxembourg Public Limited Company registration is similar to the private company. The following steps have to be considered:

  • Before incorporating the company, the share capital of EUR 31,000 must be deposited in a corporate bank account in Luxembourg.
  • The bank will notify the notary that the applicant has issued the share capital for the company. A certificate with respect to this would be issued by the bank.
  • In the next step, the incorporation meeting will occur with the shareholders and the directors, drawing up the articles of association of the company. This meeting will occur in the notary.
  • After this, the notary will proceed to release the amount of share capital for going ahead with the process of company registration in Luxembourg.
  • All the documents which include the incorporation deed, memorandum of association and articles of association would be filed with the Luxembourg Registrar of Companies (Registrar of Companies and Commerce). This has to take place within one month.
  • Details of the incorporation would be published in the Official Gazette. This gazette is an electronic gazette which is known as the Recueil Electronique des Sociétés et Association.
  • The external auditor report would not be required to be issued, if 90% of the share capital which is issued is paid up. There are few conditions which are required to be followed by the founders:

    • Founders must agree to waive for the issuance of the audit report.

    • Records of the waiver must be attached to the deed of incorporation.

    • Contributing Companies must have financial reserves must be equal to the nominal value.

  • No other compliance is required once this company is formed. The company comes into existence through the notary meeting.

Special Limited Partnership

  • This type of entity under Luxembourg Company Registration can be formed through the notary or through a special seal.
  • This special seal is also known as a private seal. One of the benefits of forming this type of entity is the contractual freedom.
  • There has to be a partnership agreement drafted where there is one general partner and one limited partner.
  • Once the limited partnership agreement is signed, the Special Limited partnership would be incorporated.
  • All documents of the limited partnership must be filed with the registrar of companies within one month.
  • Details of the incorporation would be published in the Official Gazette. This gazette is an electronic gazette which is known as the Recueil Electronique des Sociétés et Association.

Compliances for Luxembourg Company Registration

The following compliances have to be followed by the company post incorporation:

  • Shareholders Meeting

    For a private limited company, it is not mandatory to hold a shareholders’ meeting. However, if the private limited company has more than 60 shareholders, then they must notify the shareholders related to the meeting. In such a case at least one shareholder meeting must be conducted. Public companies require to conduct shareholders meetings within 6 months from the end of the financial year.

  • Board Meetings

    For private limited companies, the sole manager discretion is required for a meeting. If the articles of association require the company to have regular meetings then it must be complied with. For a public limited company, directors have to compulsorily have one meeting every year.

  • Business Registration

    Private Limited Companies and Public Limited Companies have to register with the Luxembourg registrar of Companies. Details of the incorporation would be published in the Official Gazette. This gazette is an electronic gazette which is known as the Recueil Electronique des Sociétés et Association.

  • Corporate Income Tax

    If the annual turnover of the business is less than EUR 1, 75,000 then the corporate income tax rate of 15% would be levied. There are more than 42 brackets of tax payable in Luxembourg. The range of percentage is from 0% to 42%.

Documents for Company Registration in Luxembourg

Private and Public Limited Companies

  • Incorporation Deed
  • Articles of Association
  • Memorandum of Association
  • Initial Capital Information
  • Information on the Shareholders and Directors
  • Certificate from Bank related to the capital

Special Limited Partnership

  • Partnership Deed
  • Information on the Capital
  • Certificate from Bank

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Frequently Asked Questions

Yes, a limited company can be formed with a sole shareholder and director.

Minimum capital which is required for Luxembourg Company registration is EUR 12,000 for private limited companies and EUR 31,000 for public limited companies.

First the applicant would have to infuse the capital in a Luxembourg corporate bank. Then the bank would provide a certificate to the notary. In the notary the applicant would have to attend a meeting. Here the articles would be drawn related to company registration. All documents have to be filed with the registrar of Companies in Luxembourg.

Yes, Luxembourg is a member to different conventions such as the TRIPS, WTO, WIPO and the Madrid Protocol. Hence intellectual property protection would be straightforward.

There is no restriction on owning a foreign company in Luxembourg.

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