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Luxembourg

Steps to Set Up a Company:

Luxembourg

Choose a Business Structure

  1. Sole Proprietorship (Entreprise individuelle): Single owner, full liability.
  2. General Partnership (Société en Nom Collectif - SENC): Two or more partners, shared liability.
  3. Limited Partnership (Société en Commandite Simple - SCS): General and limited partners.
  4. Private Limited Liability Company (Société à Responsabilité Limitée - SARL): Separate legal entity, limited liability.
  5. Simplified Private Limited Liability Company (Société à Responsabilité Limitée Simplifiée - SARL-S): Simplified version of SARL with lower setup costs.
  6. Public Limited Company (Société Anonyme - SA): Separate legal entity, limited liability, shares can be traded publicly.
  7. Special Limited Partnership (Société en Commandite Spéciale - SCSp): Common for investment funds.
  8. Branch (Succursale): A branch of a foreign company operating in Luxembourg.
  9. Representative Office (Bureau de représentation): Limited to marketing and promotional activities, cannot conduct business transactions.

Register Your Company

  1. Choose a Company Name: Ensure it is unique and follows naming regulations.
  2. Prepare the Articles of Association: Outlining the company’s structure and rules.
  3. Notarize the Articles of Association: Required for certain company types.
  4. Open a Bank Account: Deposit the initial capital required for the company type.
  5. Register with the Luxembourg Business Registers: Submit the incorporation documents and pay the registration fee.
  6. Obtain a Business Permit (Autorisation de commerce) from the Ministry of the Economy: If applicable.
  7. Register for Taxes with the Administration des Contributions Directes (ACD): Obtain a Tax Identification Number (TIN) and register for Value Added Tax (VAT) if applicable.
  8. Register for Social Security with the Centre Commun de la Sécurité Sociale (CCSS): For employee social security contributions.

Open a Luxembourg Bank Account

  1. Set Up a Business Bank Account: Necessary for managing business finances.

Obtain Necessary Licenses and Permits

  1. Check Industry-Specific Requirements: Depending on the nature of your business, you may need specific licenses or permits.

Comply with Luxembourg Employment Laws

  1. Employment Contracts: Draft contracts that comply with Luxembourg labor laws.
  2. Register with the Centre Commun de la Sécurité Sociale (CCSS): For social security purposes.
  3. Health and Safety Regulations: Follow guidelines from the Labour and Mines Inspectorate.

Accounting and Reporting

  1. Set Up an Accounting System: Maintain accurate financial records in compliance with Luxembourg accounting standards.
  2. Annual Financial Statements: Prepare and file annual financial statements.
  3. File Annual Tax Returns: Submit annual tax returns to the Administration des Contributions Directes.

Laws and Regulations to Consider

Corporate Law

  1. Company Law (Law of 10 August 1915): Governs the formation and operation of companies.
  2. Civil Code: Governs contracts and obligations.

Tax Law

  1. Income Tax Law: Governs corporate income taxation.
  2. Value Added Tax (VAT) Law: Governs VAT regulations.

Employment Law

  1. Labour Code: Governs the terms and conditions of employment contracts.
  2. Social Security Code: Governs social security contributions.
  3. Occupational Health and Safety Regulations: Sets health and safety standards for workplaces.

Data Protection Law

  1. Data Protection Law (Law of 1 August 2018): Governs data protection and privacy.

Environmental Law

  1. Environmental Protection Law: Governs environmental protection and sustainability practices.

Intellectual Property Law

  1. Patent Law: Governs the protection of patents.
  2. Trademark Law: Governs the protection of trademarks.
  3. Copyright Law: Governs the protection of copyrights.

By following these steps and adhering to the relevant laws and regulations, you can successfully establish and operate a company in Luxembourg. It’s advisable to consult with legal and financial experts to ensure full compliance and smooth setup.

When to Consider Setting Up a Company in Luxembourg:

  1. Strategic Geographic Location: Luxembourg’s location provides access to markets in Europe and beyond.
  2. Favorable Tax Regime: Luxembourg offers a competitive tax regime and various tax incentives for businesses.
  3. Stable Political and Economic Environment: Luxembourg provides a stable political and economic environment conducive to business operations.
  4. Skilled Workforce: Access to a highly educated and skilled labour pool, particularly in finance, technology, and services.
  5. Developed Infrastructure: Luxembourg has a well-developed infrastructure, including transportation, telecommunications, and financial services.
  6. Innovation and Technology: Luxembourg has a focus on innovation and technology, with government support for tech initiatives.
  7. Quality of Life: Luxembourg offers a high standard of living, excellent healthcare, and a vibrant cultural scene, making it attractive for expatriates and international employees.
  8. Access to EU Market: As an EU member state, Luxembourg provides access to the EU single market, facilitating trade and business operations within the EU.
  9. Financial Hub: Luxembourg is known for its robust financial services sector, providing access to global financial markets.

By considering these factors and aligning them with your business goals, you can determine if setting up a company in Luxembourg is the right move for your organization.

DALL·E 2024-07-08 12.02.10 - An illustration promoting Grant and Grahams global support for setting up companies. The image features a globe with various business icons around it
How to Set Up a Company

Step-by-Step Guide: How to set up a Company

Setting up a company involves a series of crucial steps that require careful planning and execution. From choosing the right business structure to understanding legal and tax obligations, each stage is vital to the successful launch and operation of your business. This step-by-step guide provides a comprehensive overview of the key processes involved in establishing a company, ensuring you have the knowledge and tools needed to navigate the complexities of business formation.