Luxembourg Company Formation

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Set up a company in Luxembourg

January 28, 2013, 7:59 pm
BridgeWest

Establishing a company in Luxembourg could prove to be quite profitable, as entrepreneurs can benefit from the tax advantages of the country, the well-organized business structure and prosperous economy. Another advantage for entrepreneurs willing to set up a company in Luxembourg consists in finding a friendly business environment and the foreign investors are well-treated.

 

Preliminary activities before registering joint stock and limited liability companies in Luxembourg

The law provides certain actions that must be accomplished prior to registering process in order to set up a company in Luxembourg.

The founders of both joint stock companies or a limited liability company must firstly open a bank account in the name of the company and deposit the minimum capital requirement. The account must be blocked by the bank which will remit an escrow certificate (certificat de blocage).

When a certified copy of the deed of incorporation is provided before the bank, the bank account is unblocked.

An entrepreneur must deposit EUR 12,400 as share capital for a limited liability company and EUR 31,000 for a joint stock company.

The entrepreneur must also choose a name for the new business and must verify the uniqueness of the company name with the Trade and Companies Register. The entrepreneur may ask the Trade and Companies Register for the uniqueness of the name using four different forms, each of it being charged with a different tax and the most expensive fee is EUR 10.

When the name required to set up a company in Luxembourg is unique, it must be registered. This process takes around one day.

In Luxembourg commercial activities require an establishment permit which is issued by the Ministry of Middle Classes. In order to obtain this permit, the entrepreneurs must file an application form and submit the articles of association, educational proof of abilities, diploma or certificates from educational institutes and other copies after identification card of the applicant, and police record.

This procedure is charged with a stamp tax of EUR 24 and the business license is issued in about 15 days.

 

 

Registering joint stock and limited companies with the Commercial Register in Luxembourg

 

An important step in setting up a company in Luxembourg consists in the company registration process, which is done with the help of a public notary.

In this sense, the public notary registers the statutes with the tax administration at the Registry one-stop shop and incorporates the company within the Commercial Registry and the taxes charged for this procedure rise to about EUR 1100.

The entrepreneur must provide the public notary with the articles of association, the certificate from the bank and the business license.

The registration procedure is completed in one day and the Commercial Registry provides an official registration identification number (matricule). This ID represent the basis for the other numbers issued by other authorities: tax number, VAT number, the number for social security service and employee number. When the company's ID is issued, the Commercial Registry informs the Official Gazette of the company formation within two months of registration.

By the previous registration procedure, the company is automatically registered with the Chamber of Commerce.

The entrepreneur may also apply for VAT and social security at the one-stop shop.

 

Unblocking the bank account and the foundation capital

After registration with the Luxembourg Commercial Registry, the notary public issues a release certificate (certificat de déblocage) that proves the company's existence and the identity of the founders. The certificate issued by the notary public is sent to the bank within 24 hours and the bank account is unblocked once the document is received. There are no fees or taxes charged for this process.

 

Setting up a company in Luxembourg from abroad

In Luxembourg, foreign investors have to obey the same rules and will benefit from the same advantages as national entrepreneurs.

The government of Luxembourg encourages foreign investments that lead to setting up company in Luxembourg.

The process of registration is simple and requires minimum effort, since the company is incorporated and set by a notary public.

A foreign entrepreneur willing to set up a company in Luxembourg must also know that a permanent office located in Luxembourg is not necessary, nor is the presence of the entrepreneur in this country in order to run the business.

The minimum registration requirements include an assignee and certified signatures, which can be submitted electronically.

The foreign entities willing to open a branch or a subsidiary here must be aware that the full responsibility for its actions is taken by the foreign parent company and the full capital must be submitted by them.

 

How long does it take to establish a company in Luxembourg?

 

The overall process of setting up a company in Luxembourg is not complicated and each procedure is basically completed in one to two days, except applying for a business license, procedure accomplished in a maximum of 20 days and registration at the Commercial Register which takes 4 days. A Luxembourg company is set up and ready to function in approximately 25 to 30 days.

 




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