Luxembourg at a glance
Luxembourg is one of the EU jurisdictions founders most often use today, especially while the EU-wide 28th Regime (EU Inc) is still a proposal. Below are the verified essentials: company types, tax, capital, timing and whether you can set up remotely.
Company types in Luxembourg
- SARL (Societe a responsabilite limitee) The private limited company and Luxembourg's most common form (about two-thirds of companies). 1 to 100 shareholders, EUR 12,000 capital fully paid at incorporation, formed by notarial deed.
- SARL-S (simplified SARL) The simplified one-euro SARL for first-time entrepreneurs (natural persons only): EUR 1 to EUR 12,000 capital, formed by private deed without a notary, and it requires a business permit.
| Corporate tax | Combined corporate tax of about 23.87% in Luxembourg City for 2025 (down from 24.94%), made up of a 16% corporate income tax, a 7% solidarity surtax and a 6.75% municipal business tax. The total varies by municipality, roughly 24% to 25% elsewhere. |
|---|---|
| VAT rate | Standard VAT is 17%, the lowest standard rate in the EU, with reduced rates of 14%, 8% and 3%. Registration is mandatory above EUR 50,000 of turnover. |
| Dividends & payroll taxes | Dividend withholding is 15%, often treaty-reduced and widely exempt for corporate parents. Personal income tax reaches the low 40s, employer contributions add roughly 12% to 15%, and companies pay a small net wealth tax with a minimum amount tied to the balance sheet. |
| Minimum share capital | SARL: EUR 12,000, fully paid at incorporation (a 2026 reform allows the paid-up amount to be deferred up to 12 months). SARL-S: EUR 1 to EUR 12,000. SA: EUR 30,000, with at least 25% paid up. |
| Setup time | Typically about one to three weeks. Expedited online providers advertise around 5 business days, while the full route (name reservation, notarial deed, capital deposit, RCS registration and business permit) runs 3 to 4 weeks. The SARL-S can be quicker as it needs no notary. |
| Remote setup | Yes. No nationality or residency rules apply, so non-residents can incorporate without travelling by granting a notarised power of attorney to a local agent. A Luxembourg registered office is required, and bank KYC for the blocked capital account is the main hurdle. |
| Director / residency | No residency or nationality requirement for directors or shareholders. A SARL needs at least one manager (gerant). In practice the business permit for commercial or regulated activities needs a qualified manager and genuine substance. |
| Banking options | Formation first needs a blocked capital account; the bank issues a deposit certificate used for registration. Banks include Spuerkeess (BCEE), BGL BNP Paribas, BIL and ING Luxembourg. Wise and Revolut Business and non-resident IBAN providers are widely used because traditional KYC can be slow. |
| Our formation service | from around €100 to €200 (estimated). You get a fixed quote in your free plan before you commit. |
Luxembourg has the EU's lowest standard VAT (17%) and is a AAA-rated financial centre, the world's second-largest investment fund domicile. The SARL dominates, and the SARL-S one-euro company lets first-timers start with minimal capital. The SOPARFI holding regime makes it a major hub for holding structures. Business is done in French, German and English.
How to register a company in Luxembourg
Step by step, this is how a Luxembourg formation actually runs:
- Choose SARL or SARL-S. The classic SARL needs EUR 12,000 fully paid; the SARL-S (simplified) starts from EUR 1 by private deed but is limited to individuals.
- Block the capital. For a SARL the capital sits in a blocked account until the notary confirms incorporation.
- Sign the deed. SARL deeds are notarial (power of attorney works from abroad); the SARL-S skips the notary entirely.
- Register with the RCS. The company enters the trade and companies register and receives its numbers within days.
- Business permit and VAT. Most commercial activities need an establishment authorisation tied to a qualified, Luxembourg-connected manager; VAT registration follows activity.
We handle each step with licensed local counsel, so the paperwork, registered address and filings are done correctly the first time.
What company formation in Luxembourg costs
A notarial SARL typically costs EUR 1,000 to 1,800 in notary and registry fees; the SARL-S brings setup down to a few hundred euros. Domiciliation or office costs in Luxembourg are comparatively high, and accounting for a small company commonly runs EUR 200 to 400 a month.
Form your Luxembourg company in days
Tell us where you live and what you are building. Our formation service starts from around €100 to €200 (estimated); we confirm the right structure for Luxembourg, give you a fixed quote, and form the company with licensed counsel.
Get your free planWho can form a company in Luxembourg
Founders from outside the EU can own and run a Luxembourg company, with the cross-border requirements handled for you. We flag any residency or local-agent rule for Luxembourg up front, so there are no surprises.
Luxembourg fits funds, holdings and financial-sector adjacents that use its treaty network and stability, and cross-border groups needing a respected EU base. For small operating startups the establishment-permit substance rules and high local costs usually point elsewhere.
After registration: what Luxembourg expects each year
Annual accounts are filed with the RCS using the standard chart of accounts, the corporate tax return follows year end, and VAT filings scale with turnover. The business-permit conditions (qualified manager, real establishment) are checked over time, not just at setup. Small companies avoid audit below thresholds.
Luxembourg and the 28th Regime (EU Inc)
EU Inc, the proposed 28th Regime, would let you register one company valid across all 27 EU member states. It is not law yet (expected around 2027-2028), so a Luxembourg company is one of the ready options you can use today. Forming an EU company now also positions you to adopt EU Inc later, as we cover in how to prepare an EU Inc company. To weigh Luxembourg against other countries, see company formation in Europe.