Luxembourg Company Setup: The First Step in your Business Journey
One of the first decisions you will make upon your arrival in Luxembourg is which type of business structure best fits your goals: a sole proprietorship or a commercial company.
Each brings its own advantages and constraints, and making sure you select the right option is well worth the effort.
For individuals who intend to finance and operate their businesses alone, a sole proprietorship may suffice. Unlike with a commercial company structure, no distinction is made between the business and the person.
While this setup is fairly simple and sufficient for the average freelancer, it poses certain downsides. Namely, financial liability falls solely on the individual and encompasses his or her personal assets.
Sole proprietorships conduct business in their own name and benefit from no capital minimum or need for articles of association.
Commercial companies can opt for one of two overall formats, each with their own subcategories.
Capital companies include public limited companies (SA), a popular choice among large corporations, but also used by small- to medium-sized enterprises.
Because public limited companies can access financial markets, operate within a wide range of industries and benefit from decreased shareholder liability, they also face increased requirements. These include stricter accounting practices, notary demands, and complex decision-making processes — all of which are commonly handled by fiduciary firms like Fiduciary Tucci & Partners.
Conditions for SAs, such as a €30,000 minimum, assessment reports and a notarized deeds, keep this format better suited for medium- to large-sized businesses.
Other capital company options include SECAs or SCAs (Partnership limited by shares) and European Companies, allowing for frictionless operations within EU territory.
Limited Partnerships (SECs) are ideal for partners looking to maintain control of a company while still taking on additional partners and capital. By differentiating between general and limited partners, SECs can be win-wins for innovators seeking financing or venture capitalists interested in limited liability.
The relatively simple and straightforward SENC partnership is frequently employed by family businesses or those with a small number of partners. It is free of capital minimums and allows for full control of how its articles of association are drafted.
To qualify for any of the above business permits, you must be physically established in Luxembourg and be on site to run your business on a regular basis.
Launching a new business or taking over an existing one is an exciting time for an entrepreneur. When it comes to Luxembourg Company Setup, choosing the right path and adhering to regulations can prevent headaches later on. Examine your options, then consider turning to a professional who has witnessed what works and what does not.
Luxembourg benefits from a host of funding channels, open-minded regulators, an established financial sector and high-quality support services.
If you are considering launching your company in the heart of Europe, you have chosen the right place. We hope you consider reaching out to Fiduciary Tucci & Partners as you make important decisions that will impact the future of your business endeavor.
Share your goals with us & ask how we can help you get there. Questions about trends, regulations & requirements? Curious about Luxembourg? Fiduciary Tucci & Partners can help answer your queries & find solutions.