Creating a company in Luxembourg

The creation of a company in Luxembourg requires at least one shareholder and one director regardless of their nationality or residence. Depending on the legal form chosen, there is a capital amount to be paid. For example, for a public limited liability company (Sarl), the minimum is €12,000.

By creating a company in Luxembourg, you will benefit from the lowest VAT in the European Union (3 to 17%).

Offshore companies in Luxembourg that carry out commercial activities with a profit not exceeding €175,000 per year, pay a corporation tax of 15% and 17% if the profits exceed €200,000 per year. 

Luxembourg has created a fund for the unemployed where all companies pay 7% of their income.

The Grand Duchy of Luxembourg is considered the second country in the world after the United States to host investment funds. And this is due to the strength of their banking sector as well as the ease of obtaining regulation for such activities. More information (Link hacia el blog).

Holding companies benefit from an exemption on capital obtained from branches they have abroad.

The different legal forms that an offshore company can take in Luxembourg are:

• Public limited company (SA), Public limited liability company (SARL), General Partnerships (SNC), Civil Company (SC), SOPARFI


Luxembourg, officially called the Grand Duchy of Luxembourg (in Luxembourgish, Groussherzogtum Lëtzebuerg; in German, Großherzogtum Luxemburg), is one of the twenty-seven sovereign states that make up the European Union. It is a landlocked state, without access to the sea, surrounded by Germany, Belgium, and France.

The government of Luxembourg is a unitary parliamentary constitutional monarchy, making it the only sovereign Grand Duchy at present. The country has a highly developed economy, boasting one of the highest gross domestic products per capita in the world, according to the World Bank and the International Monetary Fund.

Luxembourg is a member of the European Union, the North Atlantic Treaty Organization, the Organization for Economic Co-operation and Development, the United Nations, and Benelux, which reflects its political orientation in favor of economic, political and military integration. Its capital, Luxembourg, is home to many institutions and agencies of the European Union.

Luxembourg has a liberal system based on the stability of political ideas. The creation of companies is not subject to any prior administrative control. Instead, the law subjects the exercise of a certain number of professions to a request for Trade Authorization which must be obtained from the Ministry of Middle Classes, based on diplomas and/or professional experience.

The most common companies are sole proprietorships and LLCs. However, a more in-depth analysis reveals the possibility of obtaining specific tax advantages.


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Uses of an offshore company in Luxembourg

  • Intellectual property

    Useful to register your intellectual property and for the protection of assets.

  • Asset protection

    An SPF is very attractive for individuals or families who want to protect their assets from the tax authorities.

  • Investment funds

    Considered the second best country in the world after the United States to host an investment fund, due to the legal framework that offers different options to create funds, SLP, SICAV, SICAF, etc. (Link blog funds LX).

  • Holding

    Can be considered as an investment vehicle, as it is a company that is a shareholder of other subsidiaries of the group, and it is due to the tax exemption on income obtained abroad.

  • International trade

    A vehicle prepared to carry out foreign trade operations, although not highly recommended due to the high percentage of tax on profit.

Advantages of incorporating a company in Luxembourg

  • Share Capital

    The minimum capital required is 12,500 euros.

  • Accountancy

    Mandatory annual accounting.

  • Residence

    There is no restriction regarding the residence and/or nationality of the directors and/or shareholders.

  • Taxation rate

    Total exemption from capital gains tax and inheritance tax.
    The company tax varies from 15% to 17%.

  • Confidentiality and stability

    A modern, flexible, stable legislation, with a digital vocation and bureaucratic ease to create a company with the highest secrecy and confidentiality for the investors.

  • Investment fund licenses

    Ease of obtaining a license for FIA, RAIF and other investment funds.


Incorporation time frame7-10 days
Type of business entityLLC, public limited company, SLP, Scp, ScS
Corporate tax15-17%
ISO standardsAvailable
Tax performance guidelinesHigh performance structure by transfer price
Investment fundSLP, ScP, AIF, RAIF, UCITS
Valid EU VATAvailable
Information concerning shareholders/directorsAvailable


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