Luxembourg enjoys an excellent international reputation, but current taxation rates are no lower than in other European countries. The latter are very generous for holdings and on-shore companies. Luxembourg holdings are tax-exempt, and this applies also to the dividends paid to them. In Luxembourg, holdings like SOPARFI, identified with number 12.000, are often referred to. However, it is possible to set up a limited liability company, joint-stock company (so-called anonymous company), venture capital investment company, subsidiary or representative office. Luxembourg also guarantees its own companies a good level of confidentiality and high-quality banking secrecy.
To establish a company in Luxembourg, it is necessary to complete 6 procedures and wait 19 days.
|Types of company||Capital||Number of partners|
|Limited Liability Company (SARL)||Minimum 12,394 euros||Minimum of 2 and maximum of 40 partners. Liability limited to contributions|
|joint-Stock Company or Anonymous Company (SA)||Minimum 30,986 euros||Minimum 1 person. Liability limited to contributions|
|General Partnership (SNC)||No minimum capital||Minimum 2 partners. Partners are jointly and severally liable without limitations|
|Simple Limited Partnership (SC)||No minimum capital||Minimum 2 partners (active partners or limited partners). Active partners are jointly and severally liable without limitations; liability is limited to contributions for limited partners.|
|Cooperative Society (SCOP)||No minimum capital||Minimum 7 partners. Unlimited liability|
The director (Administrator) of a company must be resident in or of Luxembourg nationality.
In Luxembourg, company taxation varies according to different criteria, which can change depending on region. The basic rate is 20%, with the exception of companies with taxable income over 15,000 euros, which are taxed at 21%. A 7% employment contribution and a communal tax ranging from 6 to 12% are added to this tax.
|Company income||Taxation (basic rate + contribution and communal tax)|
|Less than 15,000 euros||33-39%|
|Over 15,000 euros||34-40%|
Capital gains are taxed as corporation tax. Certain taxes and amortisations are tax deductible for payments to subsidiaries.
Sales tax (VAT) is 15%, but there are specific rates for particular sectors: 6% for bicycles and domestic services; 3% for pharmaceuticals, newspapers, food, books and entry fees for cultural and sports activities, as well as for hotel and restaurant activities; 0% for exports and financial, real estate and medical services.
|Average start-up times||5-10 days|
|Availability of pre-established (ready-made) companies||Yes|
Corporate income tax (IRC), applicable to resident and non-resident companies, is set at 20% for a tax base lower than € 15,000; 21% for a tax base higher than € 15,000.
|Published information about the company's directors||The names of directors and shareholders appear in the Public Register.|
|Legislation and controls||
The Business Register (Registre de Commerce et des Sociétés (RCS)) is an official repository of all natural and legal persons exercising trade and other activities under the law of 19 December 2002 in its current version.
The operation of the RCS is delegated to the authority of the Minister of Justice. Its management is entrusted to the Minister of Justice and a group of economic interest, the GIE RCSL, consisting of the State, the Chamber of Commerce and the Trades Union Centre.
|Confidentiality||Bearer shares are not permitted|
|Risk indicators||Average political risk: 5%