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Company registration in Luxembourg

Gateway Luxembourg

Ease of Doing Business rank

#72 out of 190 countries around the globe

Index of economic freedom

#19out of 186 countries the globe

International Tax Competitiveness Index rank

#5out of 36 countries the globe

Why Luxembourg

Luxembourg is one of the most economically developed countries in Europe with a highly attractive taxation system. Luxembourg is one of the EU founder countries and located in the heart of central Europe between Germany, France and Belgium. With plenty of highly educated labor force and a small area of the country, Luxembourg is especially attractive for investors from the financial and IT sectors.

Item

Rate

Value Added Tax (VAT)

17%

VAT Reduced rate

0% - 14%

Corporate income tax

15-17%

Capital Duty

Land Tax

0.7-1%

Tax on dividends for individuals (approx.)

15%

Individual income tax (tax on salary)

0-42%

Payroll tax

Social Security Contribution (50/50 - employer and employee)

25-28%

Minimum salary (per hour)

12.08 EUR

Minimum salary per month (brut)

2,071.10 EUR

Average rental price for class A office spaces/ per 1 sq. meter

28.75 EUR

Share capital requirement for LLC

12,500 EUR

Share capital requirements

The main legal forms in Luxembourg are Limited Liability Company (LLC), locally named Société à Responsabilité Limitée (S.à r.l.) and Public Limited Company (PLC), locally named Société Anonyme (S.A.). LLC and PLC have different minimum share capital requirements. For LLC it is 12,500€ and for PLC it is 31,000€. However, there is a difference in the fact that the minimum share capital required to register an LLC must be paid in whole upon incorporation while for PLC only 25% of the contribution is required.

Timeline to set up a company

Depending on the method is used to set up a company, the time required for the process may vary. If a private person establishing a company is a non-resident, the formation process might be done using a power of attorney or by physical presence:

By the PoA: 10 days after we get all the documents
By physical presence: 10 days

Business climate

Luxembourg is a founding member of the European Union and one of its modern capitals located in the center of Western Europe between Belgium, France and Germany. Such location places Luxembourg between the largest European cities and major economic centers such as Paris, Frankfurt, Amsterdam and Brussels.

A small area of the country simplifies the interaction between companies established in Luxembourg as well as the collaboration with Clients. The government of Luxembourg pays special attention to the fintech sector, research, innovation and technology development. There are a number of research centers financed by the government aimed at the development of information technologies, medicine and the efficient use of natural resources. Luxembourg also offers several conditions to support new businesses, such as providing land at attractive prices (plots of land equipped with the necessary infrastructure and are close to international highways, railways and airports), business centers (supporting innovative startups and companies that have recently entered the Luxembourg market), favorable tax environment (low VAT rate, accelerated depreciation and various tax incentives which leads to a high return on investment) etc.

Customs duties

As Luxembourg is a member of the EU, custom duty rates are decided by TARIC - the common customs tariff in the European Union. Custom duty rates are based on the value of the goods and dependent on the type and the country of origin. Imports from EFTA countries, Switzerland and EU candidates are generally free of duty. Usually, duty rates stay between 0% and 10%.

2Free Trade Zones

3Labor force

4Business migration opportunities

Luxembourg is highly favorable as a gateway to Europe due to its friendly business environment and might be great for setting up a company in the fields of financial services or technology. Our team can assist you to establish and maintain a business in Luxembourg. We would be glad to become a one-stop-shop for your needs and with help with the entire company formation process including bank account opening and many other related services.

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What is included in the company formation service package

Company formation

Full turn-key assistance with setting up a company in EU by Power of Attorney (remotely) or by physical presence including such steps as verification of the company name; preparation of individual AoA, coordination of all necessary legal formalities and handling of the company entry into the commercial register.

Bank Account

The issue of opening a corporate account in the Bank for the company where non-EU residents are acting as directors and shareholders is still urgent. Our services for opening an account include an analysis of your business model, risk assessment and selection of the optimal Bank in the EU, collection and preparation documents package (in accordance with the requirements of the chosen Bank), representation of your interests in negotiations (if necessary).

Registered and Virtual Office

In order to set up a company in EU jurisdiction, the address of registration and virtual box services are required. In the frames of our solution, we provide an address in EU and assist with mail forwarding and other incoming physical correspondence from governmental authorities, Banks and third parties. Upon request, we could assist with EU phone number and receptionist answering on the calls.

Legal Templates

As soon as the company registration procedure is fully completed, the question of starting operating activities becomes relevant. In order to accelerate the process and save money on local advisors, we will provide all the necessary legal document templates drafted in accordance with EU law (NDA, employment agreement, service agreement, policies etc.)

Tax number obtainment

Registration of your entity within EU tax authorities and acquisition of VAT number and internal tax number (if applicable)

Dedicated consultant

Our aim is to make the moment of launching your business maximum simple, so it would be possible to concentrate on important matters and operate efficiently. Therefore, you will be provided with an individual consultant who will lead you through the entire process of the company formation and further will be assisting with other business-related issues and unique needs

Auxiliary services

Accounting and Taxation

Legal entity registered in EU obliged to conduct bookkeeping records and submit reports to the state authorities (Income tax and social security contribution report on employees, VAT reports on a monthly basis and annual reports). Jointly with our partners, we will be happy to assist your company on this matter and develop an optimal taxation model individually under your business.

Trademark registration

Registration of trademark within European Union Intellectual Property Office (EUIPO). Word mark, figurative mark, figurative mark containing word elements, shape mark, shape mark containing word elements, position mark, pattern mark, single color mark, sound mark, motion mark, multimedia mark, hologram mark.

Local Director

The need for local hired director often in demand across our Clients since it resolves issues with Bank compliance (if any arise) and makes it possible to conduct remotely operating activities more efficiently. We will carefully analyze your needs and weigh all the risks in order to conduct a search for a suitable candidate for the position.

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