Luxembourg company formation
Luxembourg company formation for residents and non-residents: SARL (€12,000), SA (€30,000) or SARL-S (€1). Partner lawyer. Free consultation.
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In summary: Company formation in Luxembourg takes 3-4 weeks. Minimum capital: €12,000 (SARL), €30,000 (SA), or €1 (SARL-S). Foreigners can form companies without restrictions. Total cost: €3,000 to €8,000. Business establishment authorization is required for commercial activities.
Written and reviewed by the yet.lu legal editorial team · Updated on
Q: How to create a company in Luxembourg?
To create a company in Luxembourg, first choose your legal form (SARL with €12,000 capital, SA with €30,000, or SARL-S with just €1). Reserve your company name with the RCS, draft articles of association, deposit share capital in a bank, then sign before a notary. After RCS registration and obtaining business establishment authorization, your company will be operational in 3-4 weeks. Total cost: €3,000 to €8,000.
Which legal form fits your project?
Before any notary appointment or bank deposit, the first real decision when incorporating in Luxembourg is the legal form. Almost everything that follows — the capital you must commit, whether a notarial deed is required, who is allowed to be a shareholder — flows from that single choice. Three forms cover the overwhelming majority of cases: the SARL for most trading companies and subsidiaries, the SA for larger or listing-bound structures, and the SARL-S for solo entrepreneurs starting lean.
One recent change makes the SARL noticeably easier to launch. Since the reform in force on 2 June 2026, the €12,000 minimum capital must still be fully subscribed, but the cash payment can now be deferred by up to 12 months rather than paid in full on day one — removing the capital-deposit bottleneck that used to slow the opening weeks of formation.
SARL - Private Limited Liability Company
The SARL is the most popular legal form in Luxembourg, representing approximately 66% of businesses. It is perfectly suited for SMEs and subsidiaries of international groups.
| Characteristic | Details |
|---|---|
| Minimum capital | €12,000 (fully subscribed; cash payment deferrable up to 12 months) |
| Number of shareholders | 1 to 100 |
| Liability | Limited to contributions |
| Shares | Not freely transferable (approval required) |
| Corporate bodies | Manager(s) + Shareholders' meeting |
| Incorporation deed | Notarial deed required |
SA - Public Limited Company
The SA is intended for larger companies, particularly those considering a stock exchange listing or requiring a structure with multiple shareholders.
| Characteristic | Details |
|---|---|
| Minimum capital | €30,000 (minimum 25% paid up) |
| Number of shareholders | 1 minimum, unlimited |
| Liability | Limited to contributions |
| Shares | Freely transferable |
| Corporate bodies | Board of Directors or Management Board + Supervisory Board |
| Stock exchange listing | Yes |
SARL-S - Simplified Limited Liability Company
Introduced in 2017, the SARL-S is designed for individual entrepreneurs and small businesses. It offers fast and economical setup with a minimum capital of only €1.
| Characteristic | Details |
|---|---|
| Minimum capital | €1 to €12,000 |
| Number of shareholders | 1 to 100 (natural persons only) |
| Legal reserve | 5% of profits until €12,000 |
| Incorporation deed | Private deed possible |
| Limitation | A person can only be sole shareholder in one SARL-S |
Formation Process
Step 1: Preparation
- Choice of legal form
- Name reservation with the RCS
- Drafting of articles of association
- Opening a bank account for capital deposit
Step 2: Incorporation
- Signing of articles before notary (except SARL-S)
- Deposit of share capital
- Publication in the Mémorial C (RESA)
Step 3: Registration
- Registration with the RCS (Trade and Companies Register)
- Application for business establishment authorization at the Ministry of Economy
- Tax registration (Administration of Direct Taxes)
- VAT registration if necessary
Formation Costs
| Item | SARL | SA | SARL-S |
|---|---|---|---|
| Notary fees | ~€1,500 | ~€2,000 | €0 - €500 |
| RCS registration | ~€200 | ~€200 | ~€75 |
| Establishment authorization | ~€50 | ~€50 | ~€50 |
| Legal fees | €1,500 - €3,000 | €2,500 - €5,000 | €500 - €1,500 |
| Minimum capital | €12,000 | €30,000 | €1 |
Corporate Taxation
Luxembourg companies are subject to several taxes. In 2025, the overall effective rate for companies established in Luxembourg City is approximately 23.87%.
| Tax | 2025 Rate |
|---|---|
| Corporate income tax (IRC) | 16% (income > €200,000) / 14% (income < €175,000) |
| Employment fund contribution | 7% of IRC |
| Municipal business tax | ~6.75% (Luxembourg City) |
| Net wealth tax | 0.5% (net wealth > €500M) |
Advantages of Luxembourg
- Attractive taxation: Among the lowest CIT rates in Western Europe
- Holding regime: Exemption on dividends and capital gains (participation exemption)
- Tax treaties: 88 treaties to avoid double taxation
- IP Box: Favorable regime for intellectual property (4.774%)
- Political stability: Stable and predictable legal environment
- Multilingual: Administration in French, German, and English
- EU access: European passport for financial services
Required Documents
For individuals
- Copy of passport or ID card
- Proof of address less than 3 months old
- Criminal record extract (for the manager)
- CV and professional qualifications
For legal entities (corporate shareholder)
- Extract from the trade register
- Certified articles of association
- List of directors and beneficial owners
- Board resolution authorizing the incorporation
Frequently Asked Questions
The minimum capital depends on the company type: €12,000 for an SARL, €30,000 for an SA, and only €1 for an SARL-S (simplified limited liability company). The capital must be fully subscribed (cash payment deferrable up to 12 months) up at incorporation.
Company formation typically takes 3 to 4 weeks. This includes document preparation, name reservation, notary appointment, registration with the RCS (Trade and Companies Register), and obtaining the business establishment authorization if required.
Yes, foreigners (EU and non-EU) can create a company in Luxembourg without restriction. There is no residency requirement for shareholders. However, the manager must be able to demonstrate professional integrity.
The SARL is suitable for SMEs (1-100 shareholders, min. capital €12,000, shares not freely transferable). The SA is for larger companies (min. capital €30,000, shares freely transferable, can be listed on stock exchange). The SARL offers more flexibility for daily management.
The SARL-S (Simplified Limited Liability Company) is designed for individual entrepreneurs and small businesses. Advantages: minimum capital of €1, no mandatory notarial deed (private deed possible), fast and economical setup.
Yes, to conduct commercial, artisanal, or industrial activities in Luxembourg, a business establishment authorization from the Ministry of Economy is required. This authorization verifies the professional qualifications and integrity of the manager.
Required documents: ID of shareholders/managers, proof of address, business plan (for certain activities), proof of capital (bank certificate), diplomas/professional qualifications for the establishment authorization.
The total cost ranges from €3,000 to €8,000 depending on the company type. This includes: notary fees (~€1,500 for an SARL), RCS registration fees (~€200), legal fees, and establishment authorization fees (~€50).
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