Everything You Need to Know About Luxembourg Company Formation

Luxembourg is one of the smallest European countries, but it provides many interesting business opportunities, especially for entrepreneurs, start-ups and multinationals that can take advantage of the very favorable taxation system. Having a central location, Luxembourg can also serve as a logistics center and as a gate to several European markets in the area, such as France, Germany and Belgium.

starting a company

If you’re interested in Luxembourg company formation, you should know that this small country has developed a very business-friendly environment, managing to attract leading companies from all types of industry sectors to establish their headquarters here. In addition, Luxembourg has also emerged as a start-up hub due to various policies and strategies implemented by the Luxembourg government.

Steps for Luxembourg Company Formation

The basic steps for the Luxembourg company formation procedure are the following:

  • Drafting of the Articles of Association for the company;
  • Drafting of the additional documents required for the registration of the company;
  • Notarizing the documents with a public notary in Luxembourg;
  • Setting up a registered office in Luxembourg for the company;
  • Opening a bank account to deposit the share capital of the company.

Specific Requirements for Luxembourg Company Formation

There are certain specific requirements regarding the Luxembourg company formation process, such as drafting the necessary documents to attest the existence of the company as a legal entity in Luxembourg. The Articles of Association must be drafted and they must be signed by the founding members. The founding members must provide identification documents, for example passport copies and other identification documents. After the drafting of the documents, they must be translated by a certified translator (if necessary) and then submitted to a public notary in Luxembourg to be authenticated. Finally, the Articles of Association are published in the Luxembourg Official Gazette.

It’s necessary to pay up the minimum required share capital to complete the Luxembourg company formation process. The sum varies depending on the type of business structure chosen. The founding members must open a bank account with a Luxembourg bank and deposit the share capital.

Another important aspect to consider is that the newly-formed company must have a unique name. Name availability can be checked at the Luxembourg Trade Register.

Finally, the company must have a registered office in Luxembourg, to provide a contact point for authorities and local business partners.

Types of Companies in Luxembourg

There are several types of business structures that can be used for Luxembourg company formation and choosing the most suitable one depends mainly on the business purposes of the founding members.

The private limited liability company (SARL) and the public limited liability company (S.A.) are the most common business structures used for Luxembourg company formation. Both business structures require a minimum share capital and have specific requirements regarding the governing bodies and the managing bodies.

Company branches in Luxembourg are often used by foreign companies that want to establish their presence on the local market or expand their presence on other European markets. Company branches are not considered separate legal entities and are dependent on the foreign parent companies.

Company subsidiaries in Luxembourg are also business structures preferred by foreign companies, with the difference that they have their own legal personality and the foreign parent companies are not liable for their actions.

Other types of companies available for Luxembourg company formation are general partnerships, limited partnerships, cooperatives and partnerships limited by shares.

Having an attractive business environment, a stable economy and numerous investment opportunities, many foreign investors are choosing to look into the advantages of the Luxembourg company formation process. Most of them are able to open a company in Luxembourg relatively fast and hassle-free, especially if they acquire the service of a firm specialized in company formation in Luxembourg.

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