A public limited company (SA) is one of the most common legal structures in Luxembourg, along with the SARL. This type of company has some great advantages, including limited liability for shareholders, where liability is capped at the amount of capital contributed. Unlike SARL, an SA company in Luxembourg can issue shares that are publicly traded, which makes it a great option for businesses looking to raise capital through the stock market. This is why it's often the preferred structure for larger organizations.
If you are interested in creating an S.A., probably you are already expecting a lot of administrative formalities and legal requirements. There is indeed a lot of paperwork, but if you are familiar with the procedure, the process can be simpler than it seems. We will give you a hand and tell you everything you need to know about setting up a SA company in Luxembourg.
Public Limited Company (SA) in Luxembourg
A Societe Anonyme is one of the most popular forms of business entities in Luxembourg. It is often compared to a Limited Liability Company (SARL), another popular choice for registration of business. But with a key difference: an SA can issue publicly traded shares. This makes it an ideal structure for larger organizations, though it can also be used by smaller businesses with a few initial shareholders.
One of the main advantages of an SA company in Luxembourg is that shareholders possess limited liability. This means they are only responsible for the company’s debts up to the amount they have invested. The minimum share capital required to establish an SA is 30,000 euros, which must be at least 25% paid up at the time of incorporation.
The management of an SA can be structured in two ways: either through a board of directors or using a dual system, which includes a supervisory board and a management board. Shareholders make key decisions through general meetings, while the board handles the daily operations of the company.
Choosing the form of business in Luxembourg depends largely on the project and individual circumstances. The most important is to know the characteristics, advantages and disadvantages of the chosen type of company compared to others to be able to make an informed decision.
| Pros | Cons |
| Limited liability Shareholders' risk is limited to the amount of their investment, protecting personal assets from the company's liabilities. | High initial costs The minimum share capital of 30,000 euros is significantly higher than that required for a SARL, which requires just 12,000 euros. Additionally, forming an SA requires a notarial act, increasing initial costs. |
| Access to capital An SA can issue different types of shares and financial instruments such as bonds, making it easier to raise capital in public or private markets. It can also be listed on the stock exchange, which is not possible for a smaller entity like a SARL. | More complex formalities The incorporation and operation of an SA involve more legal formalities compared to other business types. For example, general shareholder meetings are mandatory, and annual audits may be required, which adds to administrative and compliance costs. |
| Flexible governance The SA offers flexibility in governance, as it can opt for a unified or dual management model (supervisory board and board of directors). This makes it possible to adapt to the company's specific needs in terms of control and management. | Disclosure requirements SAs face greater transparency obligations, such as the requirement to publish financial statements, which may not appeal to entrepreneurs seeking a more discreet operation. |
| Scalability An SA is well-suited for companies expecting significant growth. It can accommodate an unlimited number of shareholders, diversify capital, and access new funding sources. | Higher maintenance costs The corporate governance structure of an SA, including the board of directors or supervisory board, as well as audit requirements, can lead to higher ongoing costs. |
| Favorable tax environment Luxembourg’s favorable tax system, with double taxation treaties and tax exemptions, can benefit SAs, particularly those engaged in international operations. | Less suitable for small businesses While an SA is ideal for larger or growing companies, smaller businesses or startups may find it too complex and expensive. For these entities, a SARL with lower capital and simpler governance requirements might be a better option. |
What taxes and opening costs will you pay for SA in Luxembourg
Setting up a company involves associated expenses and there are a lot of questions in this regard. How much does it cost to set up a company in Luxembourg? How much are the administrative costs? What taxes do I have to pay? Below, we’ll examine the most common costs you should expect when forming an SA.
- Share capital contribution The first major cost is the company’s share capital. For an SA in Luxembourg, the minimum required share capital is 30,000 euros, of which at least 25% must be placed on the accounts at the time of incorporation. This means you’ll need to deposit a minimum of 7,500 euros in a corporate bank account before registration will be approved.
- Notary fees An SA must be incorporated through a notarial act, meaning a professional notary must draft and formalize the company’s statutes and submit them to the Luxembourg Trade and Companies Register (RCS). Notary fees vary based on the complexity of the company structure and the share capital, typically ranging from 1,800 euros to 3,000 euros. However, for more complex setups or higher capital contributions, these costs could increase.
- Trade and Companies Register (RCS) fees Once the notary formalizes the company, it must be registered with the RCS.The notary handles the company's registration with the RCS.
- Registration fees at AED In case you deal with VAT produce and services and want to deduct VAT taxes, you may want to register with the Registration Duties, Estates and VAT Authority (AED). At the end of incorporation, a fixed registration fee of 75 euros will then be paid.
- Certificate of name availability Before incorporating, you must check the availability of your invented company name by requesting a certificate from the Luxembourg Business Registers (LBR). The cost of this service ranges from 4.75 to 10 euros.
- Business Permit In Luxembourg, a business license is required to carry on a commercial or craft activity and in certain liberal professions. To receive a business permit, the founder must meet certain criteria of integrity and qualification and to pay a duty fee of 50 euros for the permit itself.
| Expense | Cost (euros) |
| Minimum Capital for a SARL | 30,000 (minimum) |
| Notarial Fees | 1,000 – 3,000 |
| Registration in the Trade Register (RCS) | included in notary fees |
| Registration Fees | included in notary fees |
| Certificate of Name Availability | 4.75 - 10 |
| Business Permit | 50 |
| Other Administrative Authorizations | Variable |
| Total | A minimum of 30,000 euros of share capital and a minimum of between 1,250 and 3,000 euros for administrative and legal fees. |
Further, operating an SA company in Luxembourg involves several ongoing expenses. These costs vary depending on the company’s activities, scale and total revenue.
- Professional services Many businesses engage in professional services to support their operations. This can include lawyers, tax advisors, consultants and business advisors who assist with legal compliance, tax strategy and overall business planning. For ongoing financial management and compliance, consider accounting solutions."
- Banking fees It is mandatory to open a corporate bank account in Luxembourg to deposit the company’s share capital. So, you should also budget for account maintenance fees, charges for business debit or credit cards, and any fees for payment terminals, if needed.
- Accounting and Audits Once the SA is established, it is required to maintain formal accounting records. Depending on the size and complexity of the business, the company may also be subject to annual audits. Accounting and audit services are ongoing expenses and should be factored into the company's regular financial planning.
- Insurance While not legally required, many companies opt for business insurance such as professional liability insurance, operational liability insurance, legal protection, or other policies tailored to the business's specific risks. These insurance policies help mitigate risk and are a recurring cost.
- Company Domiciliation Every SA must have a registered office in Luxembourg. Renting office space can range from 300 euros per month for shared offices on the outskirts of Luxembourg to several thousand euros per month for prime locations in the city center. If a physical office is not required, businesses can opt for a domiciliation service, which often includes services like mail handling, with varying costs based on additional services.
Once operational, an SA is subject to various taxes, which must be factored into its ongoing financial obligations:
- Corporate Income Tax The SA is subject to corporate income tax. For companies with annual income below 175,000 euros, the tax rate is 15%. For companies with annual income over 200,000 euros, the rate increases to 17%. For companies with taxable profits between the above-mentioned amounts, the tax on profits is 26,250 euros plus 31% of taxable profits over 175,000 euros.
- Municipal Business Tax This tax helps municipalities cover costs associated with businesses operating in their region, such as infrastructure and environmental measures. A tax exemption of 17,500 euros is applied to taxable income. The rate for companies in Luxembourg City is 6.75%, while rates in other municipalities vary based on local government decisions.
- Net Wealth Tax Net wealth tax is based on the company’s net assets as recorded in its balance sheet at the end of the taxable period. The rate is 0.5% on net wealth up to 500 million euros, and 0.05% on net wealth exceeding 500 million euros.
- Property Tax This tax applies to all real estate properties owned by companies, whether built or undeveloped and is levied by local municipalities. The rate depends on the property type and location, regardless of how the property is used (commercial, residential, or mixed-use).
- VAT (Value-Added Tax) If the SA engages in VAT-applicable activities, it must register for VAT. Luxembourg’s standard VAT rate is 17%, but reduced rates apply to certain goods and services. Regular VAT filings are required for businesses subject to this tax.
What are the differences between SARL and SA in Luxembourg
Although the SA and the SARL are similar, they have many differences, a comparative analysis can help to see more clearly and assist in deciding which can be most suited to the needs of the project in mind.
| Aspect | SARL | SA |
| Share capital | 12,000 euros (fully paid) | 30,000 euros (25% paid at incorporation, minimum 7,500) |
| Number of shareholders/partners | Maximum of 100 partners | No limit on the number of shareholders |
| Shares vs. stakes | Stakes (participations) not freely transferable; require approval | Freely transferable and negotiable shares |
| Governance structure | Managed by one or more managers | Board of Directors or Supervisory Board and Management Board |
| Constitution flexibility & costs | Simpler and less costly to incorporate | More formal and expensive incorporation process |
| Access to capital markets | Cannot be pub icly listed or issue tradable securities | Can be listed on the stock exchange and issue tradable securities |
| Transfer of stakes/shares | Transfer restricted; requires approval from 75% of partners | Shares are freely transferable |
| Time to incorporate | Faster and more flexible process | More complex and time-consuming process |
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Learn moreRequirements for SA opening in Luxembourg
Before starting the process of creating a Public Limited Company (SA) in Luxembourg, it is very important to understand the legal requirements. Then you will have to take the necessary steps to comply with each one, but for now, let's see what these requirements are.
- Shareholders An SA must have at least one shareholder, who can be either an individual or a legal entity. There is no maximum limit to the number of shareholders, and they can be either residents or non-residents of Luxembourg. The ownership structure, including the number of shareholders and their contribution percentages, must be defined during the formation process.
- Registered office An SA must have a registered office in Luxembourg, which serves as the company’s principal place of business. This address must be provided during registration with the Luxembourg Trade and Companies Register (RCS). The registered office can be a physical office or, a domiciliation service can be used to provide an official address for the company.
- Business Permit Depending on the company’s activities, a business permit may be required. This permit is mandatory for commercial, industrial, artisanal activities, and certain self-employed professions. The business permit can be obtained online through the General Directorate for Small and Medium-Sized Enterprises at the Ministry of the Economy.
- Special permits and authorizations Depending on the nature of the business, additional permits or authorizations may be necessary. These vary by industry and specific business activities.
- Governance structure An SA must have a Board of Directors or, if a dual system is chosen, a Supervisory Board and a Management Board. The minimum number of directors is one, and these directors can be either individuals or legal entities. There is no requirement for directors to be residents of Luxembourg, but it is strongly recommended, particularly for governance reasons.
- Company statutes The company’s statutes, or articles of incorporation, must be drafted by a notary. These statutes must include essential information such as the company name, registered office address, purpose, share capital, and the duration of the company, among other details.
- Registration with the Luxembourg Trade and Companies Register (RCS) Once all the requirements are fulfilled, the SA must be registered with the Luxembourg Trade and Companies Register (RCS). This registration is mandatory and grants the company legal status, officially recognizing it as a corporate entity in Luxembourg.
How to create a SA in Luxembourg in 2024
We have already seen what the requirements are, this already gives us an idea of the procedure to follow to create a corporation in Luxembourg, however, we will now go back to some of these points but establishing a certain order to get a clearer view of the step by step procedure to create a Public Limited Company.
1. Project preparation
The first step is to define the structure of the company, including its shareholders and governance. You will need to establish the number of shareholders and their contribution percentages. Additionally, you must decide whether the company will have a Board of Directors or a Supervisory Board and Management Board, and who will be part of these governing bodies. For step-by-step guidance, explore company incorporation services.
2. Create a business plan
A solid business plan is essential for any company. It should detail the company’s goals, operational model, target market, marketing strategies, organizational structure, and financial projections. A well-prepared business plan acts as a roadmap for growth, helps secure financing, and guides decision-making.
3. Company domiciliation
The SA must have a registered office in Luxembourg. This can be a physical office space, which you can either rent or buy, or you can use a domiciliation service that provides an official address for the company.
4. Choose a company name and check its availability
Before proceeding with the company formation, choose a name for your SA and ensure it’s available. This can be done by submitting a name availability request online via the Luxembourg Business Registers (RCCL).
5. Draft the company’s statutes
Next, the company’s statutes must be drawn up by a notary. The statutes will include important details such as the company’s name, registered office, purpose, duration, share capital, and structure. These should be prepared in advance, based on the decisions made during the project preparation stage.
6. Open a bank account
Before signing the incorporation documents, you must open a bank account in the name of the company in formation and deposit the required share capital (minimum 7,500 euros of the 30,000 total capital). The bank will issue a certificate of deposit, which will be provided to the notary during the incorporation process.
7. Determine if a business permit is required
Depending on the type of activity the company will carry out, a business permit may be required. This is mandatory for commercial, industrial, artisanal, and some self-employed activities. The permit can be obtained through the MyGuichet.lu online platform or by submitting an application to the Directorate for SMEs, Craft, and Retail. General Directorate for SME, Craft and Retail: - Phone: (+352) 24 77 47 00 - Address: B.P. 535 L-2937 Luxembourg - Working Hours: Monday to Friday from 9:00 to 12:00 and from 13:30 - 16:30
8. Social Security Registration
If the company plans to hire employees, it must register with the Centre Commun de la Sécurité Sociale (CCSS) to meet its social security and pension contribution obligations.
9. Register for VAT (if applicable)
If the company expects to generate more than 35,000 euros in annual revenue, it must register for VAT with the Luxembourg VAT administration. Once registered, the company will receive a VAT number and must comply with VAT reporting requirements.
