The number of entrepreneurs in the country, which in 2019 was even higher than the European average, saw a sharp fall in the space of the last 3 years — from 10,2% to 6,9%. But with recently renewed interest in private ventures, many residents and non-residents alike believe that registering a company in Luxembourg is a step towards a professional apex.
In 2013 to 2020 there have been 27,400 businesses created. Almost half of them — in the knowledge-based service industry: professional, scientific and technical services, education, health, information and communication.
The Luxembourg government has been working on making life easier for entrepreneurs by simplifying the administrative procedures. Now the majority of steps can be done online through governmental portal MyGuichet, but this option is available rather to those who already have access to government services with a personal account.
Preparation steps and timeline for paperwork to open a company in Luxembourg
The entire series of procedures for formation of a business can now take 1 to 4 weeks from start to finish, explains the House of Entrepreneurship. Sometimes timeframes can be longer for certain commercial activities and depending on your unique case.
| Step | Time frame | Result |
| Prepare required documents | 2 weeks to 3 months | Before arrival application case |
| Apply for business permit and authorisation to stay | 1 month to 3 months | Business authorisation approval |
| Receive a temporary authorisation to stay and visa D | 1 month to 3 months | Authorisation to enter and stay in country |
| Enter the country and follow procedures | 3 weeks to 3 months | After arrival application case |
| Apply and receive residence permit ID-card | 2 weeks to 3 months | Residence permit |
| Register your company | 5 days to 3 months | Business ready to operate |
Before opening a company, you must preview a number of key issues, depending on your personal case. Here are the questions you might ask yourself that will influence your entrepreneurial journey roadmap.
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How can I as a foreigner start a business in Luxembourg?
While the incorporation process can be done remotely by both residents and non-residents, the company will need a physical address on the territory of the Grand Duchy to operate legally. The director (i.e. the holder of the business permit) is also required to manage the company from Luxembourg and be physically present and ready to run the company.
If you come from outside the EU, you will need to to ensure that all visa obligations are met and you can stay in the country legally. Although there is no special visa programme for entrepreneurs, there is a close equivalent — residence permit for self-employed individuals. With this status you will be able to choose any form of business, including sole-proprietorship. In that case, to speed up the process, the application for the long-stay authorization to the Ministry of Foreign Affairs is submitted jointly with the application for business permit to the Ministry of Economy.
What is the best legal ground for the project?
Choosing the right type of company for your development plan is an important step. Considerations can cover everything from how many people you want on your team to how you want to share responsibility and profits. The most popular forms of limited companies are the SA and SARL, while sole entrepreneurs with a smaller start-up budget can benefit from less complex structures, SARL-S and other one-person company forms.
Do I move an existing business, or start a brand new company?
If you have a working company in another country, you can just open a branch office in Luxembourg. It simplifies the administrative procedures of incorporation, especially compared to a subsidiary, another option for existing businesses, which is essentially like opening a new, legally independent company. Keep in mind that the taxation regimes are also different for those two.
Luxembourg for businesses
Anyone who has done their homework on Luxembourg is most likely aware of the common attractions, such as one of the highest average salaries in Europe, the country's beautiful rural landscape with castles, and the proximity to major EU players such as France and Germany. But what if you've come to build a company?
First of all, the country is quite petite and latest estimates show that 60,7% of its workforce is foreign-born. The village-tempered vibe offers easy access to highly-motivated professional networking and skilled workers from around the world. There are 3,300 investment funds in the country managing net assets of €5.1 billion, so finance options are broad. Economic and political stability is a big plus in today's world, as is a high level of digitalisation of services.
The second best thing is that you will find it easy to communicate here. There are three official languages in Luxembourg, and people generally speak Luxembourgish, Portuguese, French, English and Italian. For entrepreneurs, it can be a blessing that you can file initial paperwork in English if your French (official government language) is not yet proficient.
On the downside, it is expensive to rent a flat, it may cost you 1,500 to 2,800 euros per month. As we mentioned, a business permit holder will need to be physically present, so there is no escaping the registration at the commune with the real address. And be aware that you will eventually need to speak French while living in the country. No need to mention that to gain citizenship and one of the most powerful passports in the world, one must learn the national language.
The profile of the entrepreneur in the country can give you another perspective on the upcoming journey. The typical entrepreneur in Luxembourg is most likely a man (8.4%) rather than a woman (5.3%) and falls within the age range of 35 to 54 years old. Entrepreneurs are more often foreigners (8.2%) compared to nationals (5%). A significant proportion, 10%, possess higher levels of education, while 4% have lower educational attainment.
How to choose correct business form in Luxembourg
A clear understanding of your business objectives, operational needs and legal obligations is needed to choose the right type of company for your specific business. Start by considering the scale and nature of your business activities. Consider how much personal liability you are prepared to accept and whether you will need access to external finance.
A sole proprietorship may suit those seeking simplicity, while partnerships or companies may be necessary for shared responsibilities or larger ventures.
Next, review the regulatory and tax implications of each form of business. Consider how much administrative complexity you can handle and how each form fits your plan. Limited liability companies offer personal asset protection, but may require professional help to keep up with the extensive paperwork.
Forms of businesses popular in the country
There are three main types of capital companies in Luxembourg:
- Limited Liability Company (SARL) which offers limited liability with a minimum capital requirement of €12,000 and up to 100 shareholders involved.
- Public Limited Company (SA), suitable for larger businesses, requiring a minimum capital of €31,000 and unlimited in terms of shareholders.
- Simplified Limited Liability Company (SARL-S), introduced in 2016, is a new structure, simplifying the incorporation compared to traditional SARL with almost no shared capital required.
There are two different types though, with distinctive differences:
- Civil company (SC), a form of company created to mainly manage immovable assets or intellectual professions.
- Societal impact company (SIS), a form of company mainly focused on a social cause, for example inclusion, gender equality, sustainability.
There are three main forms of business partnerships:
- General partnership (SeNC), formed as an equal agreement between two or more owners working together.
- Limited partnership (SCS), where at least one partner has limited liability. That means, their liability only extends to their investment in the company.
- Special limited partnership (SCSp), a distinctive form with no ‘legal personality’, yet able to attract the investment funds.
Costs of setting up a company in Luxembourg
Administrative costs of setting up a company in Luxembourg in 2025 range from 1,200 to 3,200 euros. The cost can sufficiently grow from notary expenses, TVA registration and other official governmental fees applied to procedures. Make sure to plan the budget for obtaining a certificate from the Luxembourg Company Register and your initial business licence.
The final cost of starting a new company in Luxembourg depends largely on the chosen legal form because of the shared capital required.
| Formation | Share capital | Incorporation fee | Additional costs | Total apx. cost |
| SARL | 12,000 euros | 1,650 euros | 3,625 euros | 17,375 euros |
| SARL-s | 1 euro | 490 euros | 1,750 euros | 2,241 euros |
In the table below, you will find the full list of requirements and costs of setting up a company in Luxembourg, depending on its form, and other relevant details to consider before opening a company.
| Business form | Minimum number of founders | Share capital | Processing time | Unique special features |
| Public Limited Liability Company (SA) | 1 | 30,000 euros | 2 to 4 weeks | Freely transferable shares, requires audited accounts |
| Private Limited Liability Company (SARL) | 1 to 100 | 12,000 euros | 2 to 4 weeks | Restricted share transfers, simplified structure |
| Private Limited Liability Company Simplified (SARL-S) | 1 to 100 | 1 to 12,000 euros | 1 to 2 weeks | Designed for small businesses, lower capital requirements, fast setup |
| General Partnership (SeNC) | 2 | No minimum | 1 to 2 weeks | Unlimited liability for partners, flexible structure, not subject to corporate tax |
| Limited Partnership (SCS) | 2 | 30,000 euros | 2 to 4 weeks | General partners have unlimited liability, limited partners' liability restricted to contributions |
| Civil Company (SC) | 2 | No minimum | 2 to 4 weeks | Based on cooperative principles, profits distributed among members |
| Sole Entrepreneurship (EI) | 1 | No minimum | 1 to 2 weeks | Sole proprietorship, simple setup, unlimited liability for the owner |
| European Company (SE) | 2 | 120,000 euros | 1 to 2 weeks | Pan-European structure, facilitates cross-border operations, complex governance |
Taxes for businesses in Luxembourg
The primary tax for companies in Luxembourg is corporate income tax, applied to profits earned by both resident and non-resident companies. The amount of corporate tax rate in Luxembourg depends on the taxable income according to the rates:
- Reduced tax rate with total taxable income less than 175,000 euros — 15%.
- Transition tax rate applies to income from 175,001 to 200,000 euros — 26,250 euros + 31% applied to the taxable base between 175,000 and 200,000 euros.
- Standard tax rate applies to income over 200,000 euros — 17%.
Resident companies, defined as those with their registered office or effective management in Luxembourg, are taxed on worldwide income. However, income derived from permanent establishments abroad may be exempt under Luxembourg’s double taxation agreements with over 80 countries. Non-resident companies are taxed on Luxembourg-source income, but only if there is sufficient nexus (e.g., a permanent establishment or economic bond).
Is Luxembourg a tax haven?
With a corporate tax rate close to the 2024 European average of 21.1%, the country attracts businesses with its many tax advantages that ease the burden. For instance, companies operating in Luxembourg can benefit from an 80% exemption on income generated from intellectual property rights, and a tax consolidation regime that facilitates collaboration for joint ventures.
Luxembourg's business-friendly policies, central European location and stable economy continue to attract entrepreneurs and multinationals seeking growth in a dynamic, forward-looking market. KPMG, Ferrero, Amazon, Millicom, Paypal, Skype, Delphi and many others have chosen the country as the location for their European headquarters.
Step-by-step guide to opening a company in Luxembourg with costs
Since registering a business in Luxembourg requires multiple steps and may involve other parties, it is important to plan everything and above all to have a good understanding of the process itself. The most important thing to remember is that your most valuable resource is time — some documents give you just 90 days to keep them up to date.
How to open a company in Luxembourg?
Step 1. Create a business plan
Before beginning any legal or administrative steps, it’s crucial to establish a solid business plan. This document outlines the objectives of your business, its operational model, target market, marketing strategies, organizational structure, and financial projections. A well-prepared business plan serves as your roadmap, helping guide decisions and attract potential investors or secure financing. It also allows you to assess the viability of your business and foresee challenges and opportunities.
Step 2. Choose the structure for your business
Selecting the most appropriate legal structure for your company is critical. As discussed in the previous sections, you can choose from a variety of company types, such as SARL, SA, SCS, or SCSp, among others. Each structure has different requirements, levels of liability, and capital investment, so make sure to choose the one that best fits your business needs.
Step 3. Obtain the necessary permits
Some forms of companies in Luxembourg must obtain the appropriate governmental permits. If your company will engage in commercial, skilled crafts, industrial activities or certain liberal professions, you acquire a business permit. This ensures that your business complies with Luxembourg's legal and regulatory requirements.
You can apply for this permit online via MyGuichet.lu from your professional space or send a postal application to the General Directorate for SME, Craft and Retail. This process is vital to ensure that your business is legally permitted to operate in Luxembourg.
Step 4. Choose a company name from available
Before you can officially register a company in Luxembourg, you must check the availability of your chosen business name. This is done by submitting a request for a certificate of name availability to the Luxembourg Business Registers (LBR) electronically. It’s important to ensure that your company name is unique and not already in use by another business.
Step 5. Draft the Articles of Association
The articles of association are the legal documents that define the internal rules of the company, the rights and obligations of the shareholders, and the management structure. These articles should include:
- Company name and legal form.
- Registered office.
- Business purpose.
- Share capital and how shares are distributed among shareholders.
- Management structure (directors, boards, etc.).
For certain legal structures, the articles of association must be drafted and formalized by a notary. The assistance of a professional is strongly recommended for drafting the articles of association.
Step 6. Sign it with notary, if necessary for your structure
If the legal structure of the company requires notarial formalization (e.g., SARL or SA), the founding shareholders must sign the articles of association in the presence of a notary. This step is essential to officially establish the company.
Step 7. Open a business bank account
For companies such as SARL or SA, you must open a bank account in the name of the company being formed to deposit the required minimum share capital. Once the funds are deposited, the bank will issue a certificate of deposit, which is necessary for the company’s official registration.
Step 8. Register with RCS
Once the articles of association have been finalized, the company must be registered with the Luxembourg Trade and Companies Register (RCS). Registration with the RCS is a mandatory step in the company formation process and makes the business officially recognized under Luxembourg company law.
Step 9. Register with CCSS
If your business will employ workers, you must register it with the Common Social Security Centre (CCSS). This registration is necessary to manage social security contributions for both employees and, if applicable, the business owner or managing director.
Step 10. Register for VAT (if applicable)
If your company expects to generate more than 35,000 euros per year in revenue, you are required to register for Value Added Tax (VAT) with Luxembourg’s tax authorities. VAT registration ensures compliance with Luxembourg’s tax laws and enables the company to collect and remit VAT on sales and services.
Administration de l'enregistrement, des domaines et de la TVA
These steps will help you to grasp the process of registering your company in Luxembourg. The procedures are streamlined, and professional help is available to first time entrepreneurs in the country, provided by the Chamber of Commerce. To fully optimize the process and keep it remote, you can choose the help of professionals.
