Luxembourg in Offshore
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Luxembourg Company Formation
For a list of company formation companies please click the 'Company Formation in Luxembourg' tab located above.
Registration in Luxembourg follows this 6-stage process:
- Deposit the minimum required capital into a blocked company bank account. This takes one day.
- Check and reserve the company name with the Commercial Registry. This takes 3 days and costs approximately 10.
- Draft and notarise the company deed, which takes 2 days and costs approximately 1000 to 2000.
- Application to the Ministry of the Middle Classes for a business license, which takes 20 days and costs approximately 30. This can be done at the same time as stage 3.
- Register with the one-stop shop at the Chamber of Commerce, which takes 4 days and can be done at the same time as stage 4. The cost for this process is included in the cost of stage 4.
- Unblock the bank account in which the capital is held. This takes one day.
Whether you want to establish as an individual or as a company, a business permit is required. The Ministry of the Economy or Chamber of Commerce in Luxembourg can provide good advice on setting up a business.
There are six main types of business in Luxembourg:
A general partnership (Socit en nom collectif- Senc)
A partnership is formed under a business name by two or more persons, all of whom are liable for the partnership's debts. The partnership is not subject to tax in its own name, but personal income tax is levied on partners. The partnership is managed by a manager.
A limited partnership (Socit en commandit simple, Secs)
This is a limited partnership which is formed under a business name by two or more partners who are all liable, plus one or more limited partner who merely contributes capital and whose liability is limited to their contribution.
Another form of limited partnership (Socit en commandit par actions, Seca)
The partnership is limited by shares which are freely transferable.
A public company (Socit anonyme, SA)
This type of company is usually used by medium and large sized corporations. The liability of the shareholders is limited to the extent of the capital invested. There is a minimum of two shareholders and the company is managed by a board of at least three directors.
A limited company (Socit a responsibilit limite, Sarl)
The liability of the shareholders is limited to the amount of capital invested. There must be at least two shareholders and no more than forty. The company is managed by one or more managers who may be the shareholders.
A limited co-operative society (Socit co-oprative, Sc)
There must be at least seven members and shares are non-transferable to third parties. The Sc is the only form of company which is subject to oversight by the Ministry of Justice.
EU nationals should find no hardship when employing foreign staff in Luxembourg. EU and EEA citizens do not require a work permit. Other foreign workers may be employed in Luxembourg, but will require a permit issued by the Minister of Labour.
Within one month of establishing your business you must enrol it with the business register. You will also need to register for income tax, value added tax and social security.
By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.
The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:
- Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
- Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
- Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
- Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability
Characteristics of an offshore company:
- Memorandum and Articles of Association
- Certificate of Incorporation
- Registered Office/Agent
- Shareholders / Members
- Directors / Managers
- Company secretary
- Statutory Register
Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.
Organisations that can assist with Luxembourg
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Need to register a company or setting up a company?