An LLC in Luxembourg has a number of benefits. It is particularly beneficial due to the limited liability of the shareholders. Its shareholders are only liable up to the amount of their contribution to the company’s share capital. Thus, creditors cannot pursue personal assets of shareholders to pay business debts. Additionally, an advantage of an LLC in Luxembourg is flexibility in taxation compared to other legal forms. Thirdly, since the business structure of an LLC is simple, the administrative formalities are reduced and the minimum capital is low.

In order to form a Limited Liability Company, the company’s articles of association must be recorded by a notary. After that, these articles of association must be published in the Official Bulletin (Memorial C) and applied to Luxembourg Trade and Companies Register.

For a LLC, there must be at least 1 shareholder and no more than 100. They may be individuals or legal persons. The name, occupations and residence of shareholders of every LLC must be kept in a register and each shareholder must be registered in the Trade and Companies Register.

The minimum capital of an LLC is 12,000 EUR. The minimum capital must be paid in full and can be either cash or non-cash or a combination of both.

At the time of the company registration, the minimum capital is divided into registered shares of the same value. The minimum value of each share is 1 EUR.

A LLC is managed by one or multiple managing directors. This neither person has to be a shareholder nor he or she has to be a resident.

This meeting is attended by all shareholders and is chaired by the managing director of the company. There is an option for annual meetings if the number of shareholders is 60 or less.

There is no requirement for a board of directors in an LLC. Instead, as mentioned prior, there can be one managing director or a few managing directors, if its business activities include commercial activities at least one of the directors has to fill the requirements in order to obtain business permit.

When the number of shareholders of an LLC exceeds 60, an internal supervision is required. This person can be a shareholder or not.

An independent auditor is required to inspect the company’s books if an LLC exceeds two of the following:

    a balance sheet sum is more than 3,125 million EUR
  • a net turnover of 6,25 million EUR
  • 50 full-time employees (average of the year)

Liquidation occurs after a decision is made to dissolve the company in an extraordinary general shareholders meeting at the presence of a notary. A liquidator and a liquidation auditor are required in order to provide appropriate reports to the shareholders. After all creditors are paid, the remaining assets are distributed to the shareholders.

An LLC is liable to corporate taxation (IRC) at the rate of 16.05% per year for profit up to 15,000 EUR (profit = income – expenses) and 19.26% for profit exceeding 15,000 EUR. This tax includes contribution to the employment fund at the rate of 7%. The municipal business tax (ICC) will be due for commercial activities at the rate of 6.75% per year for profit exceeding 17,500 EUR. The dividends will be liable to withholding taxation at the rate of 15% per year (this rate can be reduced depending on the Double Taxation Agreements that Luxembourg has with your country.)

 

SARL

SECA

SA

SE

Conditions

Minimum EUR 12,000 fully subscribed and paid up

Minimum EUR 30,000 fully subscribed with ¼ paid up on formation

Minimum EUR 120,000 fully subscribed with ¼ paid up on formation

Contributions

Contributions in cash or in kind (valuation by a statutory auditor, except for SARLs)

Contributions in industry (services or expertise) are not generally considered to form the part of the share capital, but they can be recorded in the statutes and benefit from remuneration in the case of an SA or an SARL.

Company shares

Registered company shares that can be transferred under strict conditions

Freely transferable registered or bearer shares/bonds or dematerialized securities

Constitutional document

Notarial deed published in full

Notarial deed published in full in the electronic compendium of companies and associations (Recueil électronique des sociétés et associations - RESA) and in the Official Journal of the European Union

Legal personality

Each capital company has a legal personality which is distinct from that of its partners. As a legal person, it has rights and obligations under commercial, accounting and fiscal law

Assets

A capital company holds its own assets

Decision-making bodies

General meeting + business manager or management board

General meeting

General meeting and board of directors meeting or general meeting, management board and supervisory board

Monitoring and legal auditing of accounts

Internal auditor (commissaire aux comptes) or statutory auditor (réviseur d’entreprises) for SARLs with more than 60 partners

Obligation to audit the company by a statutory auditor depends on size criteria

Internal auditor or approved statutory auditor

Obligation to audit the company by a statutory auditor depends on size criteria

Accounting and financial information

Annual accounts lodged with the Trade and Companies Register (Registre de Commerce et des Sociétés - RCS)

Number of partners

between 1 and 100

at least 2 (one limited partner and one general partner)

at least 1

Financial liability

Liability limited to the amount of contributions

Limited liability for the limited partner but unlimited liability for the general partner

Liability limited to the amount of contributions

ULTIMATE

  • Statutes and bylaws drafting
  • Notary fees
  • Power of attorney
  • Application for VAT
  • Capital bank account
  • Tax advise
  • Business permit

PREMIUM

  • Statutes and bylaws drafting
  • Notary fees
  • Power of attorney
  • Application for VAT
  • Capital bank account
  • Tax advise
  • Business permit

BASIC

  • Statutes and bylaws drafting
  • Notary fees
  • Power of attorney
  • Application for VAT
  • Capital bank account
  • Tax advise
  • Business permit