Choosing a legal form: SARL, SARL-S, SA or partnership
The SARL (private limited liability company) is Luxembourg's workhorse — roughly two thirds of all companies. Minimum capital €12,000, fully subscribed and fully paid up at incorporation, notarial deed required, 1 to 100 shareholders (individuals or companies).
The SARL-S — the "€1 company" — lowers the barrier to entry: capital anywhere between €1 and €12,000, incorporated by private deed, no notary needed. The constraints: shareholders and managers must be natural persons, one person may hold only one SARL-S at a time, the business-permit application must precede RCS registration, and 5% of yearly profits go to a reserve until capital plus reserve reach €12,000 — which simply ends the reserve obligation; converting into a full SARL is only required if the share capital itself is raised above €12,000.
The SA (public limited company) targets larger projects and fundraising: minimum capital €30,000, at least 25% paid up (€7,500), notarial deed, freely transferable shares, a single shareholder and a single director allowed. Contributions in kind require a report from an approved statutory auditor.
The SCS and SCSp (limited partnerships) have no minimum capital and no notary requirement — the SCSp, with no separate legal personality, is the vehicle of choice for investment funds. Finally, operating as a sole trader requires no capital, no deed and no articles — but it comes with unlimited personal liability.
The eight steps, in order
- Name availability certificate from the LBR (lbr.lu) — processed in days, downloadable for 20 days. Optional in law, expected by notaries in practice.
- Business permit (autorisation d'établissement) from the Ministry of the Economy — required for commercial, craft and most professional activities. Conditions: professional integrity, qualification where the activity demands it, real premises in Luxembourg and effective day-to-day management. Filed online via MyGuichet.lu, €50 chancellery fee. Legal deadline 3 months — silence counts as approval — but 2-4 weeks in practice for a complete application.
- Bank account and capital blocking: the share capital is deposited in a Luxembourg account; the bank issues the blocking certificate the notary requires. Funds are released right after registration.
- Notarial deed (SARL and SA) — since the 2023 digitalisation law, incorporation can be done entirely by videoconference with qualified e-signature, no in-person appearance required. SARL-S and partnerships skip this step.
- RCS registration — the notary files the deed with the trade register within days; publication in the RESA is included. Since November 2024, every individual appearing in the register needs a Luxembourg national identification number (13-digit matricule), requested through the RCS form if you don't have one.
- VAT registration with the AED within 15 days of starting activity — free of charge, the LU number typically arrives within 2-4 weeks. Below €50,000 of annual turnover you may opt for the small-business VAT exemption scheme.
- Social security (CCSS) — the manager registers as self-employed; employer registration and each hire must be declared within 8 days.
- Beneficial owners (RBE) — declaration of every individual holding more than 25% within one month of registration, €15 fee (plus VAT). Fines for non-compliance can reach €1,250,000.
Realistic end-to-end timeline for a standard SARL: 3 to 6 weeks — the permit and, for non-residents, the bank account are the pacing items.
What it really costs
Official and market figures, excluding share capital. SARL-S: about €70-200 total — €50 permit, ~€17 RCS filing (official LBR tariff: €14.61 + VAT), no notary. Classic SARL: notary fees of €1,000-1,800 for a straightforward incorporation (€2,500-3,000+ with shareholder agreements or contributions in kind), €75 fixed registration duty, ~€124 RCS filing (€105.91 + VAT), €50 permit — so roughly €1,250-3,300 in fees, plus the €12,000 capital, which remains available to the business as working capital. SA: €1,750-3,500+ in fees, plus at least €7,500 of paid-up capital.
Also budget for year one: accounting from a fiduciaire (typically €250-400/month all-in for a small company — see our guide to accountants in Luxembourg), Chamber of Commerce membership (minimum €70/year for a SARL, €140 for an SA), €22 for the annual-accounts filing, and domiciliation if you have no premises — with the caveat that a pure letterbox does not satisfy the business-permit substance requirement.
Taxes your company will pay (2026)
Since the 2025 tax cut, corporate income tax is 16% (14% below €175,000 of taxable profit). With the 7% employment-fund surcharge and municipal business tax added — 6.75% in Luxembourg City — the aggregate rate comes to 23.87% in the capital, and about 21.7% for smaller profits. Each municipality sets its own business-tax rate (Esch-sur-Alzette: 8.25%).
Two specifics worth knowing. The minimum net wealth tax, reshaped in 2025, now depends only on balance-sheet size: €535 (up to €350,000), €1,605 (up to €2 million) or €4,815 per year. And VAT runs at the EU's lowest standard rate — 17%, with reduced rates of 14%, 8% and 3% — with a small-business VAT exemption below €50,000 of annual turnover.
The company is only half of the tax picture: once you draw a salary or dividends as a manager, a personal filing obligation often follows — our guide to the tax return in Luxembourg covers the thresholds, the deadline and the deductions worth claiming.
Non-residents: what nobody warns you about
Ownership is unrestricted — any non-resident, EU or not, can hold 100% of a Luxembourg company. The conditions attach to management: since the law of 26 July 2023, no residence condition applies to the permit holder, but must run the company day-to-day with regular physical presence — a cross-border manager from France, Belgium or Germany is fine; managing from 800 km away is not. Non-EU citizens who want to be that manager need a self-employed residence permit, applied for from abroad, often taking months — the pragmatic alternative is appointing a qualified local or cross-border manager.
The real bottleneck is the bank account. The capital must be blocked in a Luxembourg account, KYC on foreign beneficial owners is strict, refusals and multi-week delays are common — and most neobanks do not issue the notarial blocking certificate. Banks expect substance and a business plan. This is where a well-connected local fiduciaire earns its fee: preparing the file, making the introduction, and running the permit, notary, VAT, CCSS and RBE steps in parallel rather than in sequence.
Frequently asked questions
What is the cheapest way to start a company in Luxembourg?
The SARL-S (simplified limited liability company): share capital from €1, no notary required — it can be incorporated by private deed — and registration fees of roughly €70-200 in total (€50 business permit + ~€17 RCS filing). The trade-offs: shareholders and managers must be natural persons, one person may only hold one SARL-S at a time, 5% of annual profits must be set aside until capital plus reserve reach €12,000, and the activity must fall under the business permit regime.
How long does it take to register a company in Luxembourg?
Realistically 3 to 6 weeks for a standard SARL. The business permit is the pacing step: the legal maximum is 3 months (silence counts as approval), but a complete application is typically processed in 2-4 weeks. The notarial deed takes days once the bank has issued the capital-blocking certificate, and the notary files with the RCS within days. For non-residents, opening the bank account is often the real bottleneck and can add weeks.
Can a foreigner own 100% of a Luxembourg company?
Yes. There are no nationality or residence conditions for shareholders — a non-resident, EU or non-EU, can own 100% of a SARL or SA. The conditions attach to the person holding the business permit: since the law of 26 July 2023 no residence condition applies to them, but they must genuinely run the company day-to-day with regular physical presence, and the company needs real premises (a pure letterbox is refused).
Do I need to live in Luxembourg to be the manager?
No — since the law of 26 July 2023, no residence condition applies, though any change in the manager's habitual residence must be notified within a month. What the Ministry of the Economy checks instead is a real link with the business and effective day-to-day management with regular physical presence: a manager commuting from France, Belgium or Germany is acceptable; one based 800 km away is not. Non-EU citizens who want to manage the company from Luxembourg need a self-employed residence permit, applied for from abroad, which can take several months.
What taxes will my Luxembourg company pay?
For 2025-2026: corporate income tax of 16% (14% below €175,000 of taxable profit), plus a 7% employment-fund surcharge and municipal business tax (6.75% in Luxembourg City) — an aggregate rate of 23.87% in the capital, among the most competitive in Western Europe. Add the minimum net wealth tax (€535, €1,605 or €4,815 per year depending on balance-sheet size) and, from €50,000 of annual turnover, VAT at the EU's lowest standard rate of 17%.
Do I need an accountant to set up the company?
Legally, no — practically, almost everyone uses one. A fiduciaire handles the business-permit file, coordinates the notary and bank, registers the company for VAT and social security, and files the RBE declaration within the one-month deadline. Expect €250-400/month all-in for a small company's ongoing accounting, VAT returns and annual accounts. Our directory lists the 555 OEC-certified firms, and 295 of them work in English.
SARL or SARL-S: which one should I choose?
Choose the SARL-S to test a business idea with minimal capital and cost — knowing it is limited to natural persons and must convert into a full SARL only if its share capital is raised above €12,000 — reaching €12,000 in capital plus reserves merely ends the 5% reserve obligation. Choose the classic SARL (€12,000 minimum capital, fully paid up, notarial deed) for credibility with banks and clients, corporate shareholders, or any structure involving holding companies. Most advisers see the SARL-S as a stepping stone rather than a destination.