For many foreign investors, the registration of a company in Luxembourg is preferable for many reasons. Among them: the stability of the national economy, an exclusive environment with low taxes for international structures.
Known as the “Grand Duchy of Luxembourg”, the small state is landlocked. It is located in Western Europe. Founding member of the European Union. Immediately 3 languages received the status of an official: Luxembourgish, French, German. The business environment communicates in English. Luxembourg City is the capital and one of the four official capitals of the European Union. The country has a developed economy and one of the highest GDP per capita in the world, making it an attractive option for starting a business.
There are many advantages to registering a company in Luxembourg. There are no taxes on interest, royalties, or technical service fees paid to non-resident companies. Besides, if patents, trademarks, and registered designs are used when registering companies in Luxembourg, there are tax incentives as royalty income on these rights is subject to corporate tax of only 6% and zero income tax on distribution payments.
It is because Luxembourg is a member of the World Intellectual Property Organization (WIPO). Thus, a Luxembourg-based firm is an ideal vehicle for the preservation of intellectual property rights that can be protected internationally.
Company registration in Luxembourg also offers virtually unlimited access to the EU market and the Schengen area – 26 developed countries. Thus, a company with foreign capital can invest in any business sector without restrictions.
Finally, Luxembourg boasts a highly skilled workforce with a literacy rate of 99% and a technological development rate of 90%. It makes Luxembourg workers efficient and productive in every way. The jurisdiction was ranked 18th out of 141 countries. The rating is awarded for global competitiveness, as the country’s economy is the best in terms of its technological readiness. It is also because there is a strong commodity market and a stable macroeconomic environment.
Features of registration of companies in Luxembourg
- The name of the company
The company name can be in any language, but the registry may request a French or German translation. The company name must end with the suffix Sàrl for private limited liability companies. Certain words that imply licensing industries, such as banking, are prohibited. Perform name verification using our services from our Luxembourg partners.
- Office
Registration of companies in Luxembourg implies the presence of a registered office – a physical address in the territory of the jurisdiction. We can provide a legal address. Official correspondence and company documents can be served here.
- Directors
For firms like Sàrl, only one director is required and there are no restrictions on nationality or place of residence. Since some industries require a commercial license, we recommend that firms operating in these industries have a European Union resident director. The names and contact details of the directors are not published.
- Shareholders
There are no restrictions on citizenship or place of residence of shareholders. Only one is required and no more than 40 shareholders are allowed. Shareholder information is publicly available and the use of nominee shareholders ensures confidentiality. All companies with more than 25 stockholders are expected to hold a seasonal general meeting.
- Financial Manager
A financial account manager should be appointed whose role is to present the annual financial statements to shareholders at the general meeting.
- Capital
The minimum share capital is 12,500 euros, and the minimum value of one share is 25 euros.
- Timing
After receiving all the information, the process of registering companies in Luxembourg usually takes two weeks.
- Submission requirements
All companies are required to record yearly financial statements, although these documents do not need to be kept in Luxembourg. It is also necessary to file annual tax returns.
- Identification
As part of our due diligence, we demand verification of identity in the form of a certified copy of the passport for all directors and shareholders of the corporation.
- Personal presence
It is not necessary to travel to Luxembourg to register, but it can be useful for certain commercial licenses.
Required documents
To start registering companies in Luxembourg, you will need the following:
- Company name.
- Full name, date of birth, address, and nationality of all directors.
- Full name and address of all shareholders.
Documents to be provided:
- Copies of passports of all interested parties – notarized, with Apostille.
- Proof of residential address (gas/electricity bill or credit/debit card statement less than three months ago) re-certified by a notary.
The procedure for registering companies in Luxembourg
1. Open a bank account and deposit the authorized capital
Applicants need to open a bank account in the name of the firm to deposit the initial capital. Also, funds equivalent to the authorized capital are “locked” in the escrow account and require authentication with the bank. Therefore, the bank will issue a certificate of escrow (Certificat de blocage).
Once the firm is established, a certified copy of the title deed of registration and the certificate of the issue (Certificat de déblocage) are provided to the bank, the funds will be automatically unlocked.
2. Check the originality of the selected name
Customers can check the proposed names of the company in the Register of Shareholders of Luxembourg online.
3. Use the services of a notary
For paperwork, you will need the help of a notary or a lawyer. These include the company’s articles of association and articles of association.
4. Registration of companies in Luxembourg in the Register
Next, there is a registration of companies in Luxembourg in the Commercial Register. After the notary has paid all applicable fees, receives an application containing the required documents, he will proceed with the registration of the company after applying.
