Luxembourg Business Services Overview About Luxembourg Setting up a Business in Luxembourg Taxation


The Luxembourg corporate legislation defines six forms of entity through which business can be carried out from Luxembourg. Each of these 6 forms has a legal personality distinct from that of its members. The choice of legal form depends on economic and legal considerations (e.g. the extent of members’ liability, the extent to which shares are transferable, etc).

No company may adopt a name giving rise to confusion with that of an existing company.

The principal forms normally used are:

  • Société en Nom Collectif (SENC), considered to be a partnership, which may be formed by two or more persons all of whom are personally, jointly and indefinitely liable for the partnership’s debts. In principle, shares of an SENC are not normally transferable, though the articles of association may provide for departures from this rule.
  • Société en Commandite Simple (SECS) or limited partnership, which is formed by one or more partners (the “general partners”) who are jointly and indefinitely liable for the partnership’s debts and by one or more “limited partners” whose liability, is limited to their contribution. Both SENC and SECS are not subject to tax in their own name, but to personal income tax which is payable by the partners to the extent of their share in the partnership’s income.
  • Société Anonyme (SA), considered to be the equivalent of the public limited company whose members are liable only to the extent of their contribution in the company’s capital.
  • Société à Responsabilité Limitée (SARL) or the private limited liability company.
  • Société en Commandite par Actions (SCA) or the partnership limited by shares. The SCA is comparable to the limited partnership (SECS), the only difference being that the limited partners’ shares are freely transferable.
  • Société Coopérative (SC) or the cooperative company whose members’ responsibility may be limited by the statutes of the company to a certain amount. Shares of an SC are not transferable to third parties.

In practice, the SA and SARL have proved to be the most popular. The main features of these two corporate forms are presented in the summary table below:

Société Anonyme / Public Limited Liability Company Société à Responsabilité Limitée / Private Limited Liability Company
Formation By notary By notary
Minimum subscribed capital € 31,000 € 12,500
Minimum paid-up capital 25% 100%
Currency of the share capital Any Any
Number of shareholders 1 minimum 1 to 40
Legal form of the shareholders Individual or legal entity Individual or legal entity
Type of shares Registered or bearer Registered
Management Board of directors (1 if 1 shareholder, 3 otherwise) Director(s) (minimum 1)
Residence requirements for managers None None
Annual Shareholder's Meeting 1 per year if more than 25 associates
Accounts once per year and submitted to Registrar once per year and submitted to Registrar
Auditor required required if more than 25 associates
Audit if size of the company requires it if size of the company requires it
Report required not required

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Trade Permit

The Luxembourg constitution of 1868 guarantees to every citizen the freedom of trade and industry, as well as the freedom to establish a business.

However, in the interest of industry and commerce and in order to guarantee the administrative supervision of the business environment of the country, local legislation lays down some specific conditions for access to and exercise of trades and occupations.

Under the law of 28 December 1988, a government permit is required for any industrial or trade activity to be carried out in Luxembourg. The permit is issued by the Ministry of Middle Classes based on the applicant’s professional qualifications and good standing. The permit is strictly personal, and cannot be transferred to other persons. Legal entities, including partnerships, must apply in the same way as physical persons, demonstrating necessary professional qualifications and good standing of the firm’s management.

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