Luxemburg Company Formation

Opening a company in Luxembourg

Why start a company in Luxembourg? What are the advantages in the country of Luxembourg?
Luxembourg, a country that is part of the European Union, is a convenient solution for many entrepreneurs.

The local currency is the Euro (EUR), and living is very cheap in the country.

Luxembourg is a convenient gateway to the European market, with cheap maintenance costs and a local market that understands the English language very well.

The country is in Western Europe, close to Germany, Belgium, the Netherlands and France. And this is a very important strategic location for import/export operations to Europe.

Luxembourg is a perfect place for investment and business expansion, because the small country allows companies to establish themselves there and provide services to the whole world.

Luxembourg is good for the establishment of holding companies, due to the low taxation on the one hand and the location in Europe on the other hand.
Luxembourg is also a convenient place for technology companies. For example, WIX is located in Luxembourg.

The process of opening a company in Luxembourg
Opening a company in Luxembourg begins with the signing of a notarial power of attorney to open a company by a local agent. The document was then sent with a courier urgently to Luxembourg to be processed by a local Luxembourg notary. After several processes in Luxembourg, the customer is required to sign the application for registration in the commercial register, and again send the document to Luxembourg. At this stage the company already exists legally and can start business activities.

local director
In order to establish a company in Luxembourg, a local director is required with whom it will be possible to open a bank account, register with the tax authority, etc. We can help you with this requirement.

In Luxembourg there is no need for a local shareholder. Moreover, in Luxembourg you also do not need any European citizenship to open a company. That means you can open a Luxembourg company even if you are a foreign citizen. This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign together with the local director.

Opening a bank account in Luxembourg - current account for the company
Since this is a European country, more or less starting in 2018, those who want to open a bank account are required to come to the country.

However, there is an alternative, and that is opening an internet bank account. Indeed, similar to our "Zero One" bank, there are Internet banks in Europe that would be happy to accept your company in Luxembourg as a client.

Equity Capital
In order to open the company, a minimum deposit of equity capital of 12,500 euros is required.

In Luxembourg, it is required to make an actual deposit of the aforementioned equity amount. However, it is not required to open a bank account for it, and a deposit can be made to the notary's account to prove that the money exists at the time of the company's establishment.

After opening the bank account and depositing the equity capital, the company is opened and a company charter is issued from the commercial register (this is the Luxembourg certificate of incorporation).

VAT registration
After the opening of the company, at the same time as the opening of the current bank account for the company, the registration of the new company in VAT will also be carried out. The company will receive a VAT number and can start trading.

EORI number
If you need to, we can obtain an EORI number for you so that you can import or export with the company within Europe.
EORI is an abbreviation of Economic Operators Registration and Identification number.

Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.

Tax in Luxembourg
Corporate tax in Luxembourg varies according to income.
For sales to the local Luxembourg market, the VAT is 15% - one of the lowest in Europe.
The tax on the dividend is 15%.

Questions and answers
Question: Is it necessary to physically fly to Luxembourg to open a company in Luxembourg?
Answer: The entire process is carried out remotely and at no stage is it necessary to physically come to Luxembourg. There is no need to fly to Luxembourg to open the company. The entire process of opening the company and in most cases also the company's bank account, are carried out remotely without setting foot on Luxembourg soil.

Question: Who provides the local address for the company in New Luxembourg?
Answer: We will provide the local address.

Question: How can I find a good accountant to handle our new Luxembourg company?
Answer: We will connect you with a local accountant.

Question: If I want to come to Luxembourg to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch in order to sign the account opening forms, so that everything will be in order before you arrive, so that you will not wander around the city in order to find a branch that will accept you and open a bank account for your new Luxembourg company.

Question: What type of company in Luxembourg should I open?
Answer: In Luxembourg there are two types of companies:
The first type is a limited liability company ("SARL"). This is the LLC.
SARL companies are considered more flexible in terms of organizational structure and easier to operate on a daily basis. They are suitable for investments of different scopes.
The minimum equity capital of the SARL company is 12,500 euros as mentioned above.

The second type is "joint stock company", that's how I imagine it can be translated into Hebrew. In English this type is called Joint Stock Company (JSC) and in Luxembourg it is called S.A.
S.A. companies are generally intended for large-scale investments. As a result, they are less flexible from a legal point of view and much more formal in terms of organizational structure and day-to-day operations. On the other hand, they are great for raising capital, because their shares can be issued on the Luxemburg Stock Exchange, and they can issue securities of various types.
The minimum equity capital of the S.A. company is 31,000 euros.

Foreign investors often choose SARL companies, i.e. companies of the first type, unless their business requires the company to be of the S.A type (for example, if it is planned to establish a new bank or insurance company).

Question: Do you need a European passport to open a company in Luxembourg?
Answer: There is no need for a European passport. We can open a company in Luxembourg for any foreign citizen as long as he has a valid passport.

Question: How long does it take to open a company in Luxembourg?
Answer: The process of opening the company, including signing the power of attorney and sending it, should be very fast, up to 2-3 weeks. After that, the process of opening a bank account takes between 2-3 weeks, depending on the readiness of the banks to accept the new company as a customer. Of course, these are times that depend on third parties, so this is only an estimate.

Question: Is it possible to open a company in Luxembourg for a person with American citizenship or a person living in the USA?
Answer: Yes. We know how to open a company in Luxembourg for a person with American citizenship or a person living in the USA.

On the face of it, it seems trivial that a person with ties to the USA could open a company in Luxembourg, but we assure you that this is not the case. Today, all banks in Luxembourg without exception refuse to open an account for a new Luxembourg company if its owner has any ties to the USA. Therefore, we are probably the only ones, and certainly one of the few in Luxembourg, who know how to open a company in Luxembourg for a person with American citizenship or who lives in the USA.

Question: How much does it cost to open a company in Luxembourg?
Answer: Click here and get in touch and get a current quote without obligation!