There are a few steps to forming your Luxembourg company and we can assist you in all stages of the process. The steps taken to incorporate your company in Luxembourg are as follows: Check the company name for uniqueness with the Registre de commerce et des sociétés du Luxembourg Open a bank account in Luxembourg and deposit the minimum share capital EUR 12.500. The bank will then issue a money blocking certificate for the incorporation before notary The incorporation must be done before notary Provide power of attorney to a mandatory if the shareholders cannot attend the incorporation meeting Article of association could be prepared with the collaboration of the notary The Registration and publication of the incorporation of the company with to appropriate authorities is done by the notary After the incorporation meeting, the notary issues the money releasing certificate to make money on bank account available for the Luxembourg company Incorporation taxes are paid by the notary and invoiced to the company
Company Name
Your unique company name can be in any language using the Latin Alphabet. However the Luxembourg registry may request a French or German translation if a foreign language is used. The Luxembourg Registrar will reject the registration of a company if the name already exists. Any name which in the opinion of the Trade Registry is offensive will not be allowed. Your company name will need to end with Sàrl and it is normal practice for the Trade Registry to refuse names that are associated with the banking, insurance industries and any name that would suggest Government patronage. Names requiring consent or a license: French and German names for Bank, Buildings Society, Savings, Insurance, Assurance, Re-Insurance, Fund Management, Investment Fund, Council, Municipal, Co-operative or the foreign language equivalent.
Share Capital
The minimum share capital for a Sàrl is fixed at the equivalent of €12,500 and has to be fully paid up and the capital may be expressed in any currency. Shares are not freely transferable, transfers require the agreement of all shareholders.
Registered Office and Secretary
Your company requires a registered office in Luxembourg. Your company does not require a secretary by law, however it is allowable.
Company Directors
A director can be of any nationality, however many business licences are easy to obtain if one of the directors is a resident of the European Union and only one director is required. The names of directors do appear in public records: in the protocol of the Notary and in the records of the Commercial Registry: the "Registre de Commerce et des Sociétés" There is no requirement for a company secretary. A Financial Accounts Manager (Commissaire des Comptes) is required to present the accounts at the company general meeting.
Company Shareholders
The shareholders can be any nationality and only requires one shareholder for an Sàrl. The maximum number of shareholders cannot exceed forty and if your company has under twenty-five shareholders you do not have to hold Annual General meetings. Corporations are allowed as shareholders.
Shareholder confidentiality
Names of the subscriber shareholders and subsequent change of shareholders are entered in the Registry, the 'Registre de Commerce et des Sociétés'. Details stating the name, occupation and residency need to be lodged, however confidentiality can be obtained by: Using our service of nominee shareholder.
When incorporating your business in Luxembourg
The company does not have to keep records in Luxembourg. But you are required to file annual accounts and an annual tax returns with the tax authorities: "Administration des Contributions Directes".
Ongoing management of the company
Your unique company name can be in any language using the Latin Alphabet. However the registry may request a French or German translation if a foreign language is used. The Registrar will reject the registration of a company if the name already exists. Any name which in the opinion of the Trade Registry is offensive will not be allowed. Your company name will need to end with Sàrl and it is normal practice for the Trade Registry to refuse names that are associated with the banking, insurance industries and any name that would suggest Government patronage.
Registration of the Deed
This must be effected with the Administration de l'Enregistrement et des Domaines, within 15 days by the notary, or within three months by the parties.
Publication
The articles of incorporation and the names of all directors must be published – Publication is in two stages: first by being deposited with the business register (Registre de Commerce et des Sociétés) within one month of completion of the deed of incorporation, and secondly by formal publication in the official journal of the Grand Duchy – the Mémorial du Grand-Duché de Luxembourg, Recueil Spécial des Sociétés et Associations; within a month of deposit with the registrar.
Company taxes
One reason for incorporating in Luxembourg is that the standard rate of VAT is one of the lowest in the EU. This has attracted many companies to locate distance selling operations there. Profits from commercial activities are taxed at rates from 16%. There is a mixture of local and national taxes, so the rates depend on the location of your registered office. Companies with Soparfi status are taxed on commercial companies in the normal way. Holding companies can be exempt from paying tax on dividend income and capital gains. There can be no withholding taxes on bringing dividend income into a Luxembourg company and paying it out again to a final holding company. This exemption depends on: Meeting certain conditions and Use of Double Tax Treaties and possible use of the EU directive on Parent and Subsidiary companies.
Main features of the company's capital
The company's capital is divided into equal equity interests with a par value which may not be less than €25. The transfer of shares to parties who are not shareholders is subject to strict conditions laid down in Article 189 of the Act on Commercial Companies. The capital must be at least €12,500, fully subscribed for and paid up in full, and there must be no more than 40 shareholders.
General meetings of the shareholders
In companies with fewer than 25 shareholders, it is not mandatory to hold an ordinary general meeting of the shareholders. In this case, each shareholder must receive the text of the resolutions or decisions to be taken, and he or she votes in writing. Unless the charter lays down stricter provisions, decisions are taken by shareholders representing more than half the capital. An extraordinary general meeting of the shareholders must be held for the following reasons, to amend the charter (increase or reduction of the capital, change of the company's objects, etc.), All shareholders are entitled to attend general meetings (whether they are ordinary or extraordinary) and to take part in votes with a number of votes equal to the number of shares they own.
Supervision of the company
No internal control body is required unless there are more than 25 shareholders, in which case supervision must be entrusted to one or several statutory auditors (commissaires aux comptes), who may but need not be shareholders.
Limited Liability Company – Société à Responsabilité Limitée – Sàrl
The liability of the shareholders is limited to the amount of the capital they have paid, and their shares may be transferred only as provided for by the law. The company's articles of incorporation must be drawn up by a notary and published in full. The company's capital must not be less than €12,500 paid up. Société à Responsabilité Limitée – Sàrl – Once all the relevant information and certificates have been received and the formation capital has been deposited on a bank account, a Luxembourg company can be incorporated within 7 days. The statutes or Articles of Incorporation must be published in either French or German. Among other items, they must specify the objects of the company, the share capital and shareholders, directors, year end date and details on the annual general meeting. The minimum paid-up capital must be deposited with a Luxembourg or foreign bank, which will then issue a certificate confirming that the relevant amount has been secured for this purpose. This certificate is sent to the Notary drawing up the statutes in order to confirm that the capital is held in the company's bank account. Shareholders may be individuals or companies of any nationality or residence. Directors may be individuals or companies of any nationality or residence. They are elected for up to six years and can be re-elected, unless otherwise specified by the company statutes.
Registered Office
The registered office must be in Luxembourg.
Annual General Meeting:
The first AGM must be held no later than 18 months from the date of incorporation and then each year on the date specified in the statutes. If all the shares are registered, the meeting can be convened by registered letter containing the agenda of the meeting; otherwise, notice must be published (in the Mémorial and a Luxembourg newspaper) at eight day intervals, the second notice appearing at least eight days before the meeting.
Trading Permit
All Luxembourg companies other than holding companies and SoParFis must obtain a trading authorisation or permit from the Luxembourg Government (Ministère des Classes Moyennes).
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