Having spent many long months working on your plans to set up a company, you finally feel ready to make it official. You may be feeling a little lost about how to go about things in terms of getting the necessary authorisations and affiliations, registering the company, etc., so myLIFE has put together a checklist of the key administrative and financial formalities that must be completed when setting up a company in Luxembourg, to ensure that you don’t miss anything.
Check out the requirements associated with your business
Before getting started, it’s important to be aware that some professions are subject to specific requirements, and you will need to check that you have: the necessary qualifications; any obligatory insurance cover; and any specific licences, authorisations or approvals. Check out the regulations governing your business sector to ensure that the various stages in setting up your business run as smoothly as possible.
→ Useful info: third-country nationals must check with the Ministry of Foreign and European Affairs whether their residency permit allows them to act as a business owner.
Before getting started on the first formalities to set up your company and start your business, it’s an excellent idea to draw up a business plan. It will help you structure your plans, define your strategy and objectives, get to know the market and your competitors better, and identify your funding needs.
Choosing the legal form
A sole proprietorship (self-employed in your own name) or commercial company (SA, SARL, SARL-S, etc.)? On your own or with other partners? The legal form of your company must be chosen to suit the nature and requirements of your business. It will affect how the business is run, your legal responsibilities and obligations, and how you are taxed as a business owner.
A business permit is compulsory for skilled craft, industrial and commercial businesses, and for some self-employed professions.
Business permit application
An application for a business permit is one of the first formalities you will need to carry out when setting up your company. It is compulsory for skilled craft, industrial and commercial businesses, and for some self-employed professions. The application can be submitted by post to the General Directorate for the Middle Classes, online at MyGuichet.lu, or by appointment with the House of Entrepreneurship (at the General Directorate for the Middle Classes counter). You must fulfil the conditions relating to qualifications, professional integrity and establishment, and provide the following supporting documentation:
- Application form: “Business permit application (including the declaration of honour)”.
- Proof of professional integrity:
- A criminal record certificate (record no. 3): to be requested from the Luxembourg Ministry of Justice (if you have a Luxembourg social security number). If you are non-resident or have been living in Luxembourg for less than 10 years, you must present a recent criminal record certificate issued by the country or countries in which you have lived in the last 10 years.
- A declaration of non-bankruptcy: only required if you are non-resident or have been living in Luxembourg for less than 10 years.
- Proof of qualifications: for certain regulated professions, you must provide justification of your professional qualifications and, where applicable, your degree or recognition of your degree.
- Proof of permanent establishment in Luxembourg:
- a copy of a lease agreement in the Grand Duchy of Luxembourg (shop, warehouse, office, workshop, etc.): the registered office of your company must be appropriate to the nature of your business.
- Or a residency certificate for Luxembourg: the company may be registered at your home address, but only under strict conditions (it must be in Luxembourg, include an office or workshop appropriate to your profession, and you must have the approval of your municipality, owner and/or co-owners’ association, etc.).
- Copy of identity papers: ID card/passport/residency permit.
- Payment of stamp duty: proof of payment of the stamp duty (Droit de chancellerie) of EUR 24.
- Draft Articles of Association of your company.
Verification that the name of the company is available
Don’t forget to check that the corporate name of your company or brand is not already taken. Make a request to the Luxembourg Trade and Companies Register for a “Certificate of trade name availability”. This procedure is subject to administration fees of between EUR 4.75 and EUR 10.
Open a bank account for the company
You must open a bank account in the name of your company. You must pay in the share capital of your company before you can use the account to pay money in or out for sales and expenses. It will be blocked until the company is officially incorporated. The minimum amount of share capital is EUR 12,000 for an SARL and EUR 30,000 for an SA.
→ Useful info: the bank will need several documents to open your professional account: draft Articles of Association, the company’s organisational chart, the list of authorised signatories, etc.
Articles of Association are required in order to incorporate a company. They define how your business will operate.
Articles of Association
Articles of Association are required in order to incorporate a company. They define how your business will operate. Articles of Association must be drawn up before a notary for all limited liability companies (SARL, SA, etc.), with the exception of an SARL-S. This is subject to a fee calculated in accordance with the fee schedule of the Chamber of Notaries. Several documents must be presented: the Articles of Association, the blocking certificate, the business permit, etc.
|Shareholders’ agreement (pacte d’actionnaires or pacte d’associés)
It may sometimes be appropriate to draw up a shareholders’ agreement, a pacte d’actionnaires (for an SA) or a pacte d’associés (for a SARL), in addition to the Articles of Association of the company. This document allows you to define the commitments of the various parties and their rights and obligations regarding the company, in order to restrict the potential for any disagreements.
Registration with the Luxembourg Trade and Companies Register (RCS)
Most companies must be registered with the Luxembourg Trade and Companies Register (RCS) and file their Articles of Association there. The information required varies depending on the legal form, business activity and size of the company. If the company has been established before a notary, the notary takes care of the registration formalities of the company, and for registering and filing the Articles of Association. Otherwise, it’s up to you to take care of this in the month following the incorporation of your company. You can do this online using your LuxTrust certificate. The registration costs can be consulted on the RCS website.
Registration of the beneficial owners
Since 2019, all companies registered with the RCS must register their beneficial owners in the Register of Beneficial Owners (RBE), with the exception of sole traders, temporary commercial companies (sociétés commerciales momentanées) and joint ventures (sociétés commerciales en participation).
Once incorporation is complete, you must register your company with the Luxembourg Centre Commun de la Sécurité Sociale (CCSS)
Registration with the CCSS
Once incorporation is complete, you must register your company with the Luxembourg Centre Commun de la Sécurité Sociale (CCSS) If your company is a sole proprietorship you must fill out the “Declaration form – self-employed persons”. For a commercial company, you must use the “Declaration of start of employment for a private-sector employee” and an “Operating declaration” to be able to hire staff. NB: you cannot be an employee of your own company if you hold a business permit and at least 25% of the shares. In this case, you will be registered as self-employed. For more information visit the CCSS site.
→ Useful info: if the revenue generated by your business is less than one third of the minimum wage, you can request exemption from affiliation. However, you will have no social security cover (sickness, pension, accident or disability).
Registration with the AED
Most start-up companies in Luxembourg must register for VAT (value added tax) with the Luxembourg Registration Duties, Estates and VAT Authority (AED). To do this, you must complete a “VAT – Initial declaration natural persons” or “VAT – Initial declaration legal persons” based on the legal form of your company. You will then receive your VAT identification number. If your annual turnover is less than EUR 35,000, you can opt for a VAT exemption. Formalities can be carried out with your responsible tax office or via MyGuichet.lu.
Initial declaration with the Luxembourg tax authorities (Administration des Contributions Directes)
Income generated by your company is subject to tax, so you must register with the Luxembourg tax authorities (Administration des Contributions Directes). In principle, after filing your Articles of Association in the Trade and Companies Register (for companies) or receiving your business permit (for sole proprietorships), you will receive a letter from the relevant tax office. If the tax authorities don’t contact you, you will have to make your initial declaration yourself.
|Financial assistance for entrepreneurs
There are several financing schemes available to support start-up businesses in Luxembourg: bank loans, government subsidies, the Société Nationale de Credit et d’Investissement (SNCI), private investors, financing programmes, etc. Find out about the different types of help and financing schemes that are available in the article: Funding your start-up in Luxembourg
There are a number of bodies that can provide help and advice on setting up your company in Luxembourg: the House of Entrepreneurship at the Chamber of Commerce, the Business Contact team at the Chamber of Trades, and Luxinnovation (the National Agency for Innovation and Research). Don’t hesitate to contact them. Good luck!
Be aware that the stages listed in this article are provided on an indicative basis and may vary depending on the type of business and the legal form of the company. Check out which requirements apply to your business.