Création de SARL au Luxembourg

How to create a company (SARL) in Luxembourg?

The Limited Liability Company is the favorite legal status of companies in Luxembourg, just like in France. 

Working with an operation that nearly equals it, it remains more advantageous to create your SARL in Luxembourg.

What is an SARL?

An SARL, like its counterpart in France, the Belgian SRL or the LTD in United Kingdom, is a commercial company established in the form of capital contributed by partners against the issuance of shares. In the event of any loss, each partner's liability is limited to that person's contribution amount.

The SARL: definition

A minimum of 2 partners and a maximum of 100 partners can create the SARL, it can also be a one-person company: The EURL does not exist in Luxembourg ! 

The general operation is defined by the Statutes, offering flexibility and freedom in company organization. The minimum capital is €12,000.

The minimum capital must be 12000 €. 

Unlike in France, where managers must be natural persons, in Luxembourg, managers may be legal persons. The manager, or "administrator" in Luxembourg, doesn’t have to be a Luxembourg national; however, they must be of legal age.

A SARL with over 60 partners must undergo mandatory statutory auditing.

The simplified SARL

The Simplified SARL (SARL-S) has differences aimed at easing the administrative burden, particularly for young entrepreneurs. The minimum share capital is €1, the maximum is €12,000, and creation formalities are simplified. This form is reserved for natural persons, as legal persons cannot manage the company.

The minimum share capital is set at €1 symbolic, the maximum is €12,000, and the formalities for creation are simplified. The simplified form is reserved for natural persons, the management of the company cannot be carried out by a legal person. 

Moreover, to help you with the legal structure, you can analyze the different offers according to several fundamental criteria and choose the legal partner that suits you for your creation of an SARL. 

The benefits of the SARL in Luxembourg

An SARL in Luxembourg, rather than in France, enjoys several fiscal and social security advantages. With social security contributions considered, Luxembourg’s rates are among the lowest in the EU, at 25-28%. 

Corporate tax rates are 20% on operating income under €15,000 and 21% above this amount. Municipal business tax applies with an allowance of €17,500 for companies, and membership in the Chamber of Commerce is compulsory. Luxembourg's VAT is favorable compared to France: 3% for food, 8% for fashion, 14% for intermediate costs, and 17% for services.

Income tax (IR) on annual income up to €9,750 is not taxed, while income above €34,500 is taxed at 38%.

Establishing a SARL in Luxembourg

The conditions for creating a SARL in Luxembourg

To set up an SARL, its statutory office and place of operation must be in Luxembourg; a simple address won’t suffice. The minimum capital of €12,000 must be fully paid up at incorporation and deposited in a Luxembourg bank.

Steps to Set Up an SARL in Luxembourg

1.Prepare Your Business Project

Before diving into paperwork, take the time to lay a solid foundation for your SARL:

• Define Your Company’s Activities: Clearly outline what your company will do. This definition isn't just a formality, it will shape your entire venture, from the drafting of your articles of association to the type of permits and licenses you'll need. 
• Draft a Business Plan: Prepare a comprehensive business plan detailing your strategy, target market, financial goals, and projected capital requirements. A well-structured business plan is essential, not only does it provide you with a roadmap, but it’s also crucial for attracting investors or securing financing from banks.
  

2. Business Permit

Apply for a business license required for commercial, industrial, craft, and certain liberal activities, via the General Directorate for SMEs and Entrepreneurship of the Ministry of the Economy. The manager, director, and majority shareholder must meet legal qualifications and good repute. If no response within three months, authorization is granted. 

Depending on your planned activities, you may also need to obtain additional licenses or permits. For example, if you intend to conduct commercial activities, a commercial license from the Ministry of the Economy is essential. Be sure to research all regulatory obligations relevant to your business sector to ensure full compliance and avoid future penalties.

3. Check Company Name Availability:

Verify the name availability with the Luxembourg Trade and Companies Register. Before drafting articles of association, block the capital in a Luxembourg bank account. The account is unblocked upon registration with the RCS.

Before drafting articles of association, block the capital in a Luxembourg bank account. The account is unblocked upon registration with the RCS.

Opening a Bank Account

Opening a bank account in the company’s name is a necessary step for managing your business’s finances. This account will be used to deposit the share capital, manage operational expenses, and receive payments from clients. Ensuring this is set up early streamlines your financial operations and is required before completing company registration.

4. Draft Articles of Association

SARL requires notarial drafting of articles. For SARL-S, notary involvement is optional but recommended for accuracy. If the notary handles the draft, they will register it with the RCS within a month. For SARL-S without a notary, articles can be registered online for €20-€80.

Engage professionals: Establishing an SARL is a complex process that often benefits from the expertise of professionals such as lawyers, accountants, and business formation specialists. Their guidance can help you avoid costly mistakes and ensure that all procedures are correctly completed, from drafting the articles to navigating registration requirements.

Signing the Deed of Incorporation

Once the articles are prepared, the deed of incorporation for the SARL must be signed before a notary. This step is essential, as the notary formalizes the creation of your company and ensures that all legal formalities are properly completed. The notary will also take care of registering your company with the appropriate authorities, providing peace of mind that all procedures are correctly followed from day one.

5. Register with the Trade and Companies Register (RCS)

Once the deed of incorporation is signed, you must register the company with the RCS. This step is essential, as registration grants your SARL legal personality, allowing you to conduct business activities lawfully in Luxembourg. Registration is the official green light for your company to operate.

Practical Recommendations for Successfully Creating Your SARL

Setting up a SARL in Luxembourg goes more smoothly when you approach it with practical strategies:

Consult with Experts Early: The administrative landscape can be intricate, so consider involving specialists, whether solicitors, chartered accountants, or company formation advisors, right from the outset. Their local know-how can help navigate not just the paperwork, but potential pitfalls, ensuring you meet all legal requirements the first time around.
Stay Ahead of Compliance: Luxembourg’s legal and fiscal landscape is robust and regularly updated. Make a habit of keeping abreast of rules around accounting, tax obligations, labor laws, and company filings. Building in routine checks or calendar reminders for recurring obligations (think annual reports, VAT submissions, payroll taxes) will help you avoid last-minute stress, and heavy penalties.
Keep Your Documentation Organized: From share capital proof to employee contracts and business permits, compiling and maintaining a well-documented file (digital and/or physical) can save considerable headaches, especially in case of audits or compliance verifications.
Network with Local Business Associations: Tapping into resources from the Chamber of Commerce or local entrepreneurial circles can not only help you stay informed but also open doors to support, workshops, and updates on regulatory changes relevant to your industry.
Monitor Financial Health Proactively: Regularly reviewing your company’s accounting, whether through cloud-based software or with the help of a professional, will alert you to emerging tax obligations, optimize cash flows, and support better strategic decisions.
Following these practical steps can position your SARL for long-term stability and compliance, so you can focus more energy on growth and opportunity.

Legal and Regulatory Requirements When Managing an SARL in Luxembourg

Running an SARL in Luxembourg comes with a responsibility to fulfill several ongoing legal and regulatory duties. Staying on top of these obligations not only keeps your company in good standing but also helps you avoid hefty fines and administrative headaches.

• Accounting and Bookkeeping: SARLs must maintain accurate accounting records that comply with Luxembourg’s standards. Annual accounts should be drawn up and, depending on company size and turnover, may need to be audited, especially if your SARL has more than 60 partners.
• Tax Filings: All companies are required to file annual corporate tax returns and adhere to VAT requirements. Keeping up with deadlines is crucial; late or incorrect filings can result in penalties.
• Social Security and Employee Law: If you hire staff, you’ll need to comply with Luxembourg’s social security regulations, register your employees properly, and make timely contributions. Labor laws covering contracts, working hours, and employee rights are strictly enforced.
• Statutory Changes and Reporting: Any significant company changes, such as amendments to articles of association, appointing or replacing managers, or altering share capital, must be reported to the Luxembourg Trade and Companies Register.

Given the detail and precision required, many entrepreneurs partner with professionals such as accountants and lawyers to ensure nothing falls through the cracks during setup and ongoing management. This upfront diligence is an investment in peace of mind and smooth business operations.

Mandatory Information for the Articles of Incorporation

The articles of incorporation act as the backbone of your SARL, setting out the essential framework for how your business operates. To comply with Luxembourg regulations, your articles should clearly specify:

• Company name: The official title under which your SARL will conduct business.
• Registered office: The physical address in Luxembourg serving as the company's statutory seat.
• Corporate purpose: A concise description of your SARL's primary activities.
• Share capital: The total amount of capital contributed by the partners.
• Share allocation: Details on how shares are divided among the partners.
• Governing rules: Provisions concerning management structures, decision-making procedures, and other operational guidelines.

Ensuring these elements are properly detailed not only meets legal requirements but also helps prevent misunderstandings among partners down the road.

VAT Registration: When and How for a Luxembourg SARL

If your SARL carries out transactions that fall within the scope of VAT (Value Added Tax) in Luxembourg, VAT registration is a legal must. This typically means your company sells goods or provides services subject to VAT, so, if you’re billing clients or buying business supplies, you’ll need to get a VAT number.
Registration is done with the Administration de l’Enregistrement, des Domaines et de la TVA (AED). The process involves submitting your company documents, a business plan, and basic details about your planned activities.
Once registered, your SARL can:

• Invoice clients with VAT
• Recover VAT paid on eligible purchases
• Fulfill tax-reporting obligations required of Luxembourg companies

Timing-wise, make sure you apply as soon as your activities trigger VAT liability. Delaying could result in penalties or missed reclaim opportunities, so it’s wise to tackle this administrative step early in your company’s setup phase.

Defining Your Company’s Activities

When forming an SARL in Luxembourg, one of the most important steps is to precisely describe the activities your company will pursue. This description is not just a formality, it will form the backbone of your company’s articles of association, guide your regulatory compliance, and determine what authorizations or licenses you’ll require down the line.
Take the time to specify your core business operations, using clear, unambiguous language. For example, mention if you will be providing IT consulting, opening a retail store, or operating within the food industry. If your company plans to engage in multiple activities, list each one.
Why is this so crucial? Luxembourg’s authorities, and your future business partners, need to know what your company does. This ensures your SARL is both compliant from day one and set up for smooth relations with suppliers, customers, and local agencies.
A carefully worded definition of your business purpose:

• Helps during permit and license applications.
• Keeps your banking processes straightforward.
• Prevents future legal confusion or administrative delays.

If you are unsure about how to articulate your business activities or whether your planned scope requires special permission, consulting with a legal advisor or accountant familiar with Luxembourgish company law is always a safe bet.

Why a Business Plan Matters for Your Luxembourg SARL

Before you even think about opening your company’s doors, a solid business plan is essential. Think of it as the architectural drawing for your business, a detailed map laying out how you intend to proceed, where you see opportunities, and, most importantly, where the funding will come from and how it will be used.
A compelling business plan doesn’t just help clarify your own vision. It’s often the key document required by banks and investors in Luxembourg if you hope to secure financing or attract partners. By defining your target market, outlining revenue projections, and estimating capital needs, you not only demonstrate a professional approach, but also inspire confidence among potential stakeholders.
This plan also helps to anticipate challenges and establish benchmarks for measuring progress, essential for thriving in Luxembourg’s competitive, multinational environment.

In short 

Ensuring these elements are properly detailed not only meets legal requirements but also helps prevent misunderstandings among partners down the road.

Despite similar operation to France, establishing a SARL in Luxembourg remains advantageous. The Luxembourg SARL is a commercial company in which each partner’s liability is limited to their contribution amount. Two types of SARL exist in Luxembourg: classic SARL and simplified SARL, each offering notable tax and social benefits.

In Luxembourg, there are two types of SARL: the classic SARL and a simplified SARL.

The creation of a SARL in Luxembourg has many advantages, particularly in tax and social matters.

Please note that in order to create your SARL in Luxembourg, its registered office and a place of operation must imperatively be located in Luxembourg: having a simple address there is not enough.

Establishing a holding company in Luxembourg can unlock numerous opportunities for businesses looking to expand in a dynamic and stable environment. One of the first steps is securing a business permit in Luxembourg, which is essential for legally operating within the country.