Setting up a company in Luxembourg: steps, timelines and real costs

Luxembourg attracts many entrepreneurs thanks to its stable legal framework, its clear tax system and its dynamic economic environment. Setting up a company there nonetheless follows a precise path, marked by mandatory steps. This article gives a concrete and realistic picture of it: the available legal forms, the sequence of formalities, the actual costs and the timeframes genuinely observed.

I. Choosing the right legal form

The choice of structure determines the capital to be raised, the level of liability and the credibility of the business. The table below summarises the most common forms.

The sole proprietorship is the quickest to launch but exposes personal assets. The SARL-S allows a low-cost start while being reserved for individuals. The SARL remains the benchmark for most projects, whereas the SA targets larger structures. Limited partnerships (SCS, SCSp) are favoured by private equity for their contractual flexibility.

II. Preparing the draft articles of association

For companies, draft articles must be prepared even before the authorisation is requested. The ministry indeed checks that the stated corporate object matches the intended activity. This is not yet the final deed, but a working document that will be fixed once the authorisation is obtained. The sole proprietorship escapes this step, since it is carried on directly in the individual’s own name.

III. Obtaining the business permit

The business permit is essential to carry on a commercial, craft, industrial or consulting activity. Issued by the Ministry of the Economy, it rests on three criteria: the manager’s qualification or experience, their professional standing, and the existence of a registered office. Its cost is modest — EUR 50 in chancellery fees — but the timeframe generally runs from two to six weeks depending on the complexity of the file. As the permit is attached to the person managing the business, any change of manager must be reported to the ministry.

IV. Opening a bank account and paying up the capital

Once the authorisation is granted, a professional bank account can be opened in the name of the company in formation, and the capital is paid up in accordance with the articles. Formalities are lighter for the SARL-S. For the sole proprietorship, a professional account is not mandatory, but remains strongly advisable to keep private and business flows clearly separate.

V. Signing the articles and registering the company

This step formalises the birth of the company. SARLs and SAs must be incorporated before a notary, whereas the SARL-S can be set up under private agreement using standardised articles. The notary checks the capital, refers to the business permit and proceeds with registration in the Trade and Companies Register (RCS). The business permit then becomes final.

VI. Tax registration and initial obligations

The launch of the activity comes with several formalities. A VAT number must be requested from the Registration Duties, Estates and VAT Authority where the activity is subject to VAT. On direct taxes, the sole trader declares the start of activity to the Direct Tax Authority (personal income tax), while the company has its tax file opened after registration in the RCS (corporate income tax). Finally, affiliation to social security (CCSS) is required whatever the form, for the self-employed manager and, where applicable, for employees. As a benchmark, a fully taxable company in Luxembourg City bears in 2025 an overall burden of approximately 23.87% on its profits.

VII. Actual costs and timeframes

Excluding share capital, setting up a company represents a cost of between EUR 1,000 and 1,600 depending on the chosen form, to which is added a professional domiciliation, generally charged between EUR 150 and 300 per month. This domiciliation must be provided by a regulated professional — accountant, lawyer or bank — within the limits of the services they are authorised to render: an accountant, for instance, cannot offer a ‘pure’ domiciliation detached from any professional service.

In terms of timing, a complete incorporation takes on average four to eight weeks.

VIII. Points to watch

• the registered office must exist as of the filing of the permit application;
• the corporate object must correspond precisely to the actual activity, failing which it is refused;
• foreign managers must provide complete supporting documents (criminal-record extract, proof of experience);
• the allocation of a VAT number may be refused if economic substance is not demonstrated.

Conclusion

Setting up a company in Luxembourg is a clear and relatively quick process once it is well prepared: the sequence of draft articles, permit, capital, notary, registration and then tax and social filings makes it possible to launch the activity within one to two months. At Ease Advisory, we help you choose the right form, build a solid permit application and carry out all the formalities through to registration and the opening of the tax files. Planning to set up a company? Let’s talk before you start — that is where time is saved.