Luxembourg Company Formation

How does the Luxembourg company formation process work?

Luxembourg company formation takes the SARL format, and you can carry out the process without visiting the country. The process requires seven working days.

The company requires a unique business name. Following verification, the business should open a bank account and deposit a minimum amount for share capital, which varies depending on the bank you choose.

There only needs to be one director, who can be of any nationality and reside in any country, however, it is generally advisable to have a director who is an EU resident for the business licence processing.

The names of directors do not appear on public records.

Additionally, companies in Luxembourg only need to have one shareholder, who may be from any nationality. Corporations can serve as shareholders, and nominee shareholders are permitted. 

You must perform the incorporation process in the presence of a notary. If the shareholders are not able to attend the incorporation meeting, you may grant a power of attorney. The notary participates in the preparation of the Articles of Association and handles all relevant authority requirements.

Following incorporation, the money-blocking certificate placed on the initial share capital is released so the company can access its funds. The company shall undertake the responsibility to pay the applicable taxes to the Luxembourg Tax authorities and ensure compliance of laws and regulations

Companies with fewer than 25 shareholders do not have to hold annual general meetings, and a maximum of 40 shareholders are permitted.

A Financial Accounts Manager must present accounts at company meetings however, a company is not required to hire a secretary.

Luxembourg levies taxes against foreign corporations, but its VAT is among the lowest in the EU. The tax rate for commercial activities on profits is generally set at 16 per cent. You may also be able to obtain income and capital gains tax exemptions if your company meets certain conditions. These cases include if it qualifies under double tax treaties or if the company meets EU requirements regarding parent and subsidiary companies.

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