Benefits of Company Registration in Luxembourg
Most entrepreneurs strive to register their businesses in Luxembourg due to the following:
High level of jurisdiction;
Opportunity to cooperate with EU counterparts;
Well-developed banking system;
Impact of tax incentives and one of the lowest tax rates in Europe;
Stability in politics, economics and legislation;
When using the nominee service, the company information will be confidential;
Simple and swift registration provided by our company;
High development of the exchange and insurance market.
Luxembourg is known for the pleasant investment climate in terms of taxation. The VAT rate is only 17% and is one of the lowest in Europe. In addition, tax benefits are established that apply to companies in the field of gas supply, advertising services, wine production, printed materials, etc. Exporting and delivery of goods to EU is allowed at zero rates.
The minimum value of income tax starts from 20%, additional rate on dividends is not specified since they are covered by the corporate profit when calculating the base for taxation. In addition, the country ratified the double taxation agreement.
Company registration in Luxembourg should keep copies of financial statements in their corporate documents, both in and outside the country. Each year, authorized bodies are submitted with balance sheets certified by auditors, loss and profit statements. Companies created as holdings should report on a quarterly basis on their profit, and companies like SOPARFI should file and submit financial statements at the end of the year.
Types of companies
Although there is no standard offshore area in Luxembourg, the state sets loyal requirement to company registration in Luxembourg and pay taxes. We can recommend the appropriate legal form for you and choose the best tax regime.
Here you can open such types of enterprises like holding. This form of business is completely exempt from taxes, if subsidiaries are based in countries where the profit tax is rated up to 11% and thus they receive profit at over 5%. This form allows you to protect yourself against double taxation
SICAR is the most attractive option in terms of tax payment – the tax on investment and capital gains obtained due to the sale of subsidiaries is not the basis of taxation. Such scheme may be used to create limited partnerships – SeCS. The fixed amount of deposit of the authorized stock capital – 1250 Euro.
SOPARFI are holding structures of specific regime, but are taxed by all taxes. And SCA are partnerships the liability of which is limited to number of shares.
SA – joint stock company with limited authorized capital of at least 31 thousand Euro and the number of participants of at least 2 persons (can be both residents and non-residents). Prior to registration procedure ¼ of the claimed amount should be paid and ompanies may Issue bearer and registered shares, have nominee representatives and are subject to audits.
SARL have the lower limit of the authorized capital at 12.5 thousand Euro, and it should be paid in full prior to issue shares. Only registered shares are allowed under the Luxembourg law. If the number of participants is over 25 persons, the meeting should be held annually. The size of the authorized stock affects the reporting, auditing is not a must.
The specialists of Private Financial Services are willing to render assistance in document filing to open your own business in one of the most loyal countries of Europe, namely, Luxembourg. The client business registration and management abroad is the key trend of activity of our agency.
Our agency offers a wide range of opportunities for investors: you may become a shareholder to a company chosen for you by our experts from the list of registered firms in Luxembourg, or open your own company from scratch.
You need to find the name of the company, inform of your personal data and effect the advance payment for services delivered. We have developed an anti-crisis offer for you: at the initial stage of cooperation full payment of services is not required. you only need to pay 50% that is the guarantee of transaction. The remaining part of payment shall be made to the account as you receive all the necessary documents for registration (you receive them by Mail).
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FAQ (Frequently Asked Questions)
1. How long does it take to register a company in Luxembourg?
After receiving all the necessary documents proving your identity, it takes about five working days to set up a company.
2. What type of company is most popular in Luxembourg?
Among the most common types of companies that are most often registered in the territory of Luxembourg, the following can be distinguished: A public company with limited liability, a private company with limited liability.
3. Can a foreigner be the owner and director of a Luxembourg company?
Private limited liability company (Société à responsabilité limitée or S.à r.l.) No nationality or residency requirements for both managers and shareholders from a corporate perspective.
Public limited liability company (Société anonyme or S.A.) No nationality or residency requirements both for directors and shareholders from a corporate perspective.
Special limited partnership (Société en commandite spéciale or SCSp) No nationality or residency requirements both for managers and partners from a corporate perspective.
4. What are the requirements for setting up a public limited company?
A limited liability company must have a share capital of at least 31,000 euros. The company must have at least one director and one shareholder. ¼ of the declared amount must be deposited before the company is registered.
5. What are the requirements for setting up a private limited company?
There are many advantages to having a private limited company in Luxembourg and one of them is related to registration requirements. Only two shareholders are required to register this type of company. ONR can be local or foreign representatives. Shareholders can be individuals or legal entities. The minimum authorized capital for this type of company is 12,500 euros. A shareholder can establish a company in Luxembourg. The company may be managed by a foreign citizen. There is also the possibility of setting up a simplified limited liability company in Luxembourg, where the minimum capital is only 1 euro.
6. What is the required minimum capital required to open a company in Luxembourg?
There are three options for opening a company, and for each type, they feel their requirements for the minimum capital.
Private limited company – minimum capital of 12,000. Funds are paid in full at registration.
Joint-stock company with limited liability – 30,000 euros. Full signing and payment of at least one-fourth of the total amount.
Special Limited Partnership – no minimum capital.
7. Are there any annual expenses for maintaining a company in Luxembourg, and if so, what are they?
Incorporation costs in Year 1 start from EUR 5000.
8. Are there any restrictions on company activities?
Foreign investment is not subject to restrictions. However, since 2019 there have been changes — mandatory direct verification of investments that come from abroad.
On 25 March 2020, the Commission issued new guidance on foreign investment screening in response to the COVID-19 crisis. Luxembourg has put in place some sanitary restrictions to ensure the safety of its inhabitants and travelers. Please see below some regulations and recommendations and for more information please visit the government’s website
9. How can I get more information?
Private Financial Services provides a full range of corporate services in Luxembourg, including company registrations, bank accounts, license assistance, cryptocurrency and fintech projects, the gambling industry, and much more.
The Private Financial Services team will be happy to discuss matters in more detail.