Discover how to open a SARL-S in Luxembourg with only €1 share capital. Learn advantages, limitations, and how Financial Services can guide your setup.

Introduction SARL-S Luxembourg, low capital company

The SARL-S (Société à Responsabilité Limitée Simplifiée) is a simplified form of the classic SARL, created to make entrepreneurship more accessible in Luxembourg. 

With a minimum capital requirement as low as €1 (capped at €11,999), it provides an entry point for individuals who want to start a business quickly and at low cost.

This structure is particularly appealing for freelancers, startups, and small businesses that value flexibility, limited liability, and straightforward administration. However, while the SARL-S removes some barriers, it also carries limitations that entrepreneurs need to understand before choosing this legal form.

In this guide, we explain the advantages, disadvantages, and practical steps of the SARL-S, and why partnering with Financial Services Accountant Luxembourg ensures your business is not only established efficiently but also positioned for long-term success.

What is a SARL-S?

The SARL-S is a simplified limited liability company under Luxembourg law.

• Share capital: €1 – €11,999.
• Incorporation: Can be done by private deed (no notary required in most cases).
• Target audience: Individual entrepreneurs, freelancers, and small businesses.
• Legal framework: Introduced by the Law of 23 July 2016 to encourage entrepreneurship.

Key Insight: Although SARL-S lowers the entry barrier, it still requires compliance with Luxembourg’s accounting, tax, and regulatory obligations.

Advantages of SARL-S in Luxembourg

1. Low Starting Capital

You can create a company with as little as €1. This allows entrepreneurs to launch projects without tying up significant funds.

2. Simplified Formalities

Unlike a classic SARL, incorporation can be completed with fewer legal formalities, reducing costs and saving time.

3. Limited Liability Protection

Partners are only liable up to their contributions, protecting personal assets from business debts.

4. Management Flexibility

The SARL-S allows flexible governance structures suitable for small businesses, enabling decision-making tailored to company size.

Disadvantages of SARL-S in Luxembourg

1. Capital Limitation

The maximum share capital is capped at €11,999, which may limit financing options and credibility with banks or investors.

2. Accounting Obligations

Despite its simplicity, a SARL-S is subject to bookkeeping, annual accounts, VAT, and tax filing requirements. Professional support is recommended to avoid compliance issues.

3. Dividend Restrictions

Dividend distributions are limited until the capital reaches €12,000. This can restrict financial flexibility during growth phases.

SARL-S vs Classic SARL: Key Differences

Why Choose Financial Services to Open Your SARL-S?

Expertise and Personalized Advice

We advise you on the legal structure best suited to your activity and tax profile, ensuring compliance with Luxembourg law.

Time Savings & Risk Reduction

Our experts manage administrative and tax procedures, avoiding costly errors and speeding up registration.

Post-Creation Support

Beyond incorporation, we provide:

• Bookkeeping & accounting.
• VAT and tax compliance.
• Payroll services.
• CFO advisory and business structuring.

Trusted Local Partner

With years of experience, Financial Services Accountant Luxembourg is a trusted partner in the startup ecosystem, helping entrepreneurs scale successfully.

The Flexibility of SARL-S: For Entrepreneurs, Not Bankers

The SARL-S is an excellent choice for entrepreneurs entering the Luxembourg market with minimal investment. However, banks and investors may prefer structures with higher capital. This makes SARL-S ideal for:

• Testing a business idea.
• Freelancers transitioning to corporate structures.
• Early-stage startups.

As your company grows, you may convert your SARL-S into a classic SARL to unlock greater credibility and financing opportunities.

FAQs on SARL-S Luxembourg

1. What is the minimum capital for SARL-S in Luxembourg?

The minimum capital is €1, with a maximum of €11,999.

2. Can foreigners create a SARL-S?

Yes. Both residents and non-residents can create a SARL-S, provided they meet licensing requirements.

3. Does SARL-S require a business licence?

Yes. Most activities require an autorisation d’établissement from the Ministry of the Economy.

4. Can a SARL-S be converted into a SARL?

Yes. Once capital reaches €12,000, the company may convert into a classic SARL.

5. What are the accounting obligations of SARL-S?

SARL-S must maintain books, prepare annual accounts, file taxes, and comply with VAT obligations.

Get expert assistance to set up a SARL-S

The SARL-S in Luxembourg offers a flexible, low-cost pathway to entrepreneurship, making it ideal for first-time founders and small projects. While it has limitations (capital ceiling, dividend restrictions), it remains a powerful tool to launch a business with minimal risk.

At Financial Services Accountant Luxembourg, we handle everything from incorporation to compliance, ensuring your SARL-S is not just launched but also positioned for growth. 

Request your personalized quote today and start your entrepreneurial journey in Luxembourg.

Internal Links

• See also: Set up a company
• See also: Business permit Luxembourg
• See also: Accounting Firm Luxembourg

External Sources

• Guichet.lu – SARL-S Information
• Ministère de l’Économie Luxembourg
• Luxembourg Business Registers (RCS)