Legal form. Registered office. Authorization. Administrative procedures.
In 2021, more than 500 startups have been set up in Luxembourg and the numbers are still increasing. That said, setting up a startup in Luxembourg, as in Europe for that matter, requires following a certain number of steps that we will detail here:
Define the legal form of your startup
You will have to choose between the different legal forms of companies, the most well-known is the SARL, there are others and each has its own specificities.
- Sole proprietorship: you finance the business and make the decisions alone. There is no legal distinction between the company and its creator, from a legal point of view.
- LLC (limited liability companies): a differentiation is made between your personal assets and those of the startup. This means that in the event of debt, you will only be liable to the extent of what has been invested in the startup.
Minimum capital: 12,500 euros.
- The S-LLC (simplified limited liability companies): this jurisdiction is a new one, created in 2017. If it operates as a SARL, the difference is about the minimum capital necessary to obtain it. This is set at 1 euro, whereas in the case of an LLC it takes 12,500 euros.
- The SJSC (Simplified Joint Stock Company): the startup can include at least two partners or shareholders.
- Public limited company (PLC): can be integrated with several shareholders.
Register head office
The head office of your startup must be located in the Grand Duchy. This means that it will be necessary to rent premises in order to have a physical address. One of the most famous incubators in the country is the House of Startups. Having an address is highly important because it is the one that will appear on the startup’s contracts and invoices.
Obtain an authorization
There are the following conditions to be met in order to obtain this authorization:
- Provide a criminal record extract.
- A sworn statement regarding your business experience three years before sending your application.
- A declaration of non-bankruptcy is validated by a notary in order to certify that you have never been subject to bankruptcy. This document is necessary if you have been in Luxembourg for less than 10 years.
Note that all these documents will be used to verify your professional integrity with the Ministry of the Economy. Also, you will have to prove that you have the appropriate professional qualifications to set-up such a startup.
As a foreign national, the request for authorization must be supported by your residence permit and sent to the Ministry of Immigration. In addition to these different steps, you will have to pay the chancellery fees which amount to 24 euros. But all the rest of the procedure is free.
Other administrative procedures
Regardless of the legal status of your startup, you will need to complete a few additional formalities:
- It will be necessary to join the Social Security Center
Have the start-up registered at the level of the administration of direct contributions to be taxed.
Share your goals with us & ask how we can help you get there. Questions about trends, regulations & requirements or anything related to taxing digital? Curious about Luxembourg? Fiduciary Tucci & Partners can help answer your queries & find solutions.