--- canonical: "https://euincnow.com/company-formation-luxembourg" dateModified: "2026-10-11" --- # Company Formation in Luxembourg: Types, Taxes and Costs Forming a company in Luxembourg takes roughly one to three weeks, with the popular SARL (private limited company) needing EUR 12,000 subscribed capital and a notary, with minimum cash-capital payment eligible for deferral under the current rules, while the simplified SARL-S can be set up by private deed from just EUR 1. Companies pay a combined corporate tax of about 24% (23.87% in Luxembourg City) plus the EU's lowest standard VAT at 17%. There are no nationality or residency rules for directors, so non-residents can incorporate remotely through a notarised power of attorney as long as the company keeps a Luxembourg registered office. ## Luxembourg at a glance - Luxembourg is an EU member state with its own national company forms and registration rules. Compare company types, capital, tax, timing and signing requirements before you choose. The proposed 28th Regime (EU Inc) is a separate option that is not available yet. ### 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 minimum subscribed capital, with payment subject to the current cash-contribution deferral rules, 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. Cash contributions can use the statutory deferred-payment option under the articles; confirm the chosen payment schedule. * Company formation in Luxembourg: key facts (last reviewed July 2026) - 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 A SARL needs at least EUR 12,000 fully subscribed capital. Since 2 June 2026, payment of the minimum cash capital can be deferred for up to twelve months after formation, unless the articles or formation deed set an earlier deadline. Amounts above the statutory minimum, in-kind contributions and any share premium must be paid at formation. A SARL-S has EUR 1 to EUR 12,000 capital; its subscribed cash contributions can use the deferral option. An SA needs 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, any capital payment due at formation, 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 the notary must confirm the accepted representation and capital-payment route. The minimum cash contribution may use the statutory deferred-payment option; account checks remain separate. - 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 Confirm the capital-payment schedule with the notary. A SARL can use the statutory deferral option for its minimum cash capital, so an upfront blocked capital account is not a universal formation requirement. For any contribution due at formation, arrange the accepted payment evidence with the notary and provider. Banks include Spuerkeess (BCEE), BGL BNP Paribas, BIL and ING Luxembourg. Review account eligibility and KYC for your owners, residence and activity; approval is not guaranteed. * 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: 1. **Choose SARL or SARL-S.** The classic SARL needs EUR 12,000 subscribed capital; the SARL-S starts from EUR 1 by private deed and is limited to individuals. Confirm the applicable cash-payment deferral conditions. 2. **Agree the capital-payment schedule.** For a SARL, the minimum cash contribution can be deferred for up to twelve months after formation unless the articles or deed require earlier payment. Excess capital, in-kind contributions and premiums are due at formation. A SARL-S can defer its subscribed cash capital under the statutory option. Arrange evidence for any amounts due now. 3. **Sign the deed.** SARL deeds are notarial (power of attorney works from abroad); the SARL-S skips the notary entirely. 4. **Register with the RCS.** The company enters the trade and companies register and receives its numbers within days. 5. **Business permit and VAT.** Most commercial activities need an establishment authorisation tied to a qualified, Luxembourg-connected manager; VAT registration follows activity. ## 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. ## Who can form a company in Luxembourg - Check ownership eligibility separately from director, local-address and licensing requirements. Permission to own shares does not automatically give you permission to live or work in Luxembourg. The director and residency information above identifies the main formation conditions to review. - 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 add a harmonised company form in EU member states. Registration is not open and no launch date is confirmed. A national company in Luxembourg is available under existing rules, but a later EU Inc conversion would depend on the adopted law and eligibility. Read how to prepare an EU Inc company, or compare current options in company formation in Europe. ## Sources and review scope - Use the linked registries, authorities and specialist references to check the requirements for your company. A review of formation costs and filings does not replace a review of your tax position. ### Topics checked - These dates apply to the named topics. Other figures and indicative service prices have separate review needs. * **SARL and SARL-S cash capital payment deferral** Checked 11 October 2026. [Source 1][1] ### Reference links - [guichet.public.lu][2] - [taxsummaries.pwc.com][3] - [legilux.public.lu][1] ## Frequently asked questions ### Can a foreigner open a company in Luxembourg? - 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. ### How long does company formation in Luxembourg take? - Typically about one to three weeks. Expedited online providers advertise around 5 business days, while the full route (name reservation, notarial deed, any capital payment due at formation, RCS registration and business permit) runs 3 to 4 weeks. The SARL-S can be quicker as it needs no notary. ### What corporate tax does a company in Luxembourg pay? - The headline summary is \~24% combined, with standard VAT of 17%. Company form, activity, size and where the business operates can change the treatment. Read the detailed tax information and confirm the rules for your case. ### Can I form a company in Luxembourg remotely? - 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 the notary must confirm the accepted representation and capital-payment route. The minimum cash contribution may use the statutory deferred-payment option; account checks remain separate. ## Source URLs [1]: https://legilux.public.lu/eli/etat/leg/loi/2026/05/18/a266/jo [2]: https://guichet.public.lu/en/entreprises/creation-developpement/forme-juridique/societe-capitaux/sarl-s.html [3]: https://taxsummaries.pwc.com/quick-charts/corporate-income-tax-cit-rates