Luxembourg, a small yet powerful economic hub in the heart of Europe, has become an increasingly attractive destination for foreign entrepreneurs. With its strategic location, multilingual workforce, robust legal system, and favourable tax framework, the country offers an ideal environment for starting and growing a business. This guide walks through the key steps and requirements for foreigners who wish to launch a business in Luxembourg.
Why Choose Luxembourg?
Luxembourg consistently ranks among the top countries globally for its economic stability, high GDP per capita, and welcoming business climate. It boasts double taxation treaties with over 80 countries and is home to a thriving finance, ICT, and real estate sector.
Beyond financial incentives, Luxembourg’s multicultural population and central European location make it a launchpad for companies aiming to scale across the EU. Moreover, whether you’re an EU citizen or a third-country national, setting up a business in Luxembourg is entirely possible—with the right preparation.
Legal Requirements Based on Citizenship
The process of starting a business in Luxembourg differs depending on whether you are an EU/EFTA citizen or a non-EU national.
| Citizenship Type | Visa Needed | Business Permit | Residence Requirements |
| EU/EFTA | No | Yes | Register if staying 3+ months |
| Non-EU | Yes | Yes | Residence permit required before trading |
EU and EFTA nationals (including citizens of Iceland, Liechtenstein, Norway, and Switzerland) do not require a visa but must register with local authorities if residing in Luxembourg for over three months.
Non-EU citizens, however, must first obtain a temporary authorisation to stay, apply for a long-term visa (type D), and complete medical and background checks. Once in the country, they can apply for a self-employment residence permit valid for up to three years, renewable based on business activity.
Choosing the Right Business Structure
Luxembourg offers various legal forms for businesses, from simple sole proprietorships to public limited companies. Your choice will depend on factors such as liability, funding, and administrative complexity.
Common Legal Structures:
- Sole Proprietorship (Entreprise individuelle): Easy to set up but offers no separation between personal and business assets.
- Partnership (SENC or SCS): Suited for businesses with multiple founders; some forms offer limited liability.
- SARL (Private Limited Company): Most popular choice; requires a minimum share capital of €12,000.
- SARL-S (Simplified SARL): Designed for small entrepreneurs, with capital starting from just €1.
- SA (Public Limited Company): Suitable for large enterprises; requires a minimum capital of €30,000.
Steps to Start a Business in Luxembourg
Foreigners should follow these fundamental steps to legally establish a business in Luxembourg:
1. Define Your Business Idea and Legal Structure
Begin by refining your business plan and selecting the appropriate legal form. Ensure the chosen structure matches your growth goals and resources.
2. Secure a Business Permit
Most commercial, skilled trades, and liberal professions require a business permit. You must demonstrate:
- Relevant qualifications
- Financial capacity
- A clean criminal record
- Knowledge of French, German or Luxembourgish
Applications can be submitted via the MyGuichet portal. Expect a processing time of up to three months.
3. Open a Business Bank Account
To register a SARL or SA, you’ll need to deposit the required capital into a business account. This account remains blocked until the company is legally registered.
4. Register Your Company
All businesses must register with the Registre de Commerce et des Sociétés (RCS). SARLs and SAs also need notarised articles of association. Check your business name availability through the Luxembourg Business Registers (LBR).
5. Tax and VAT Registration
Once your company is registered, you must:
- Register for tax with Administration des Contributions Directes (ACD)
- Register for VAT if turnover exceeds €35,000
6. Social Security Registration
Register with the Centre Commun de la Sécurité Sociale (CCSS). Contributions depend on your income and whether you employ staff.
7. Apply for a Residence Permit (Non-EU Citizens)
If not already completed, follow the immigration process detailed earlier to secure your long-term legal stay in the country.
Administrative Considerations
Running a business in Luxembourg involves ongoing compliance. This includes bookkeeping in line with the standard chart of accounts, filing annual financial statements, and adhering to labour laws if hiring staff. Having liability and professional insurance is strongly recommended.
Support and Resources
Luxembourg offers a wealth of resources to assist foreign entrepreneurs:
- House of Entrepreneurship: One-stop advisory hub for startups.
- Luxinnovation: Public-private initiative for supporting innovation-driven businesses.
- Microlux: Specialised in financing and advising microenterprises.
- Chamber of Commerce: Offers training, networking, and support services.
- Luxembourg-City Incubator: Provides office space and mentorship for startups.
Key Advantages of Doing Business in Luxembourg
- Multilingual, skilled workforce
- Access to the European single market
- Transparent legal and regulatory system
- Competitive tax regime
- Strong government support for entrepreneurs
Summary: Checklist for Foreign Entrepreneurs
Here’s a quick checklist to make sure you’re on track:
- ✅ Develop your business plan
- ✅ Choose a legal form
- ✅ Apply for necessary permits and visa
- ✅ Open a business bank account
- ✅ Register your business with the RCS
- ✅ Sign up for tax and social security
- ✅ Get support from local business hubs
Final Thoughts
Luxembourg may have a high barrier to entry in terms of paperwork and compliance, but it more than makes up for it with its exceptional business environment. Whether you’re a solo entrepreneur or launching a startup, with the right guidance and resources, your venture in Luxembourg can thrive.
Source: https://easybiz.lu/en/blog/register-a-company-in-luxembourg
