In short
Most operating companies are SARLs (private limited companies) with €12,000 of capital, fully paid and set up before a notary; a simplified SARL-S can start from €1 without a notary but only for individuals, one per person. Most trading activities need a business permit from the Ministry of the Economy (€50, decision within 3 months), which requires a fixed establishment and effective management in Luxembourg. Companies in Luxembourg City pay a combined 23.87% on profits (14% rate up to €175,000), plus a minimum net wealth tax from €535 a year. VAT is 17%, with an optional exemption up to €50,000 turnover. Dividends carry 15% withholding (5% or 0% for US companies under the treaty). Owning a company does not give you residence — non-EU founders need a self-employed or other permit.
Luxembourg company: key facts
Last verified 28 September 2026| Usual company type | SARL: €12,000 capital fully paid, set up before a notary; SARL-S: €1–12,000, individuals only, no notary# Source: Guichet.lu: private limited company (SARL) · Guichet.lu: simplified SARL (SARL-S) |
|---|---|
| Business permit | Most trading activities need a business permit from the Ministry of the Economy (€50; decision within 3 months): integrity, qualifications, a fixed establishment and effective management in Luxembourg# Source: Guichet.lu: business permit (autorisation d'établissement) |
| Corporate tax | 23.87% combined in Luxembourg City (16% plus 7% surcharge plus 6.75% municipal tax); 14% rate on profits up to €175,000# Source: Tax administration (ACD): corporate income tax scale · PwC Tax Summaries: Luxembourg — corporate income tax |
| Net wealth tax (companies) | 0.5%, with a minimum of €535, €1,605 or €4,815 depending on balance sheet (from 2025)# Source: Tax administration (ACD): net wealth tax for companies |
| VAT | 17% — the lowest standard rate in the EU (14%, 8%, 3% reduced); small-business exemption up to €50,000 since 2025# Source: Guichet.lu: VAT · Guichet.lu: VAT registration and franchise |
| Dividend withholding | 15%; 5% under the US treaty for a US company holding 10% or more, or 0% where exemption conditions are met# Source: PwC Tax Summaries: Luxembourg — withholding taxes |
| IP regime | 80% exemption on qualifying income from patents and software# Source: PwC Tax Summaries: Luxembourg — tax credits and incentives |
| Annual accounts | Filed with the business register within 7 months of year-end; audit above 2 of €7.5M balance sheet, €15M turnover, 50 staff# Source: Luxembourg Business Registers: RCS fees · Mondaq: increase of accounting thresholds (2024) |
| Beneficial owners | Registered in the RBE within 1 month of changes; not publicly accessible since the 2022 EU Court ruling# Source: Elvinger Hoss: RBE and RCS law amendments in force |
| Self-employed permit | Apply from abroad with a business plan, financing, the business permit where required and an economic interest for Luxembourg# Source: Guichet.lu: self-employed residence permit |
| US tax treaty | Signed 1996, in force since 2000; US Social Security is taxed only in the US# Source: IRS: Luxembourg tax treaty documents · HCO: US–Luxembourg treaty and pensions |
| US–Luxembourg Social Security agreement | In force since 1 November 1993 — avoids paying into both systems# Source: SSA: US–Luxembourg Social Security agreement |
| US anti-deferral tax | GILTI renamed NCTI from 2026 — get US advice on whether Luxembourg company profits are taxed in the US each year# Source: IRS: One Big Beautiful Bill provisions |
Not American?
Canadians, Australians, Brits and other non-EU citizens: the same rules apply
Luxembourg company law is the same for every foreign founder, so Canadians, Australians, New Zealanders and Brits register a Luxembourg company exactly as described here. Only a few points differ:
- Canada
- Australia
- New Zealand
- United Kingdom
- Japan
- South Korea
- + other visa-free countries
| Living in Luxembourg | A company does not give you residence. Non-EU founders need a self-employed permit, a salaried permit with their own company, or the investor permit (repeal pending). |
|---|---|
| Tax treaty | The US treaty reduces dividend withholding from 15% to 5% (or 0% where exemption conditions are met) for US companies holding 10% or more. Other countries' treaties set their own rates. |
| Home-country tax | US citizens are taxed on worldwide income and have extra filings (Form 5471, FBAR, NCTI). Other nationals usually aren't taxed this way. |
| Documents from abroad | Need an apostille; the US, Canada (since 11 Jan 2024), the UK, Australia and NZ issue them.Source: HCCH: Apostille Convention status table |
At a Glance
Luxembourg Company Formation in Numbers
Why Luxembourg
Why Americans Register Companies in Luxembourg
Luxembourg is Europe's largest fund centre — €6.73 trillion of fund assets in June 2026 — with 118 banks, an AAA rating and over 80 tax treaties. Company law, banking and advisers work in French, German and English, and the country is a common EU base for holding, fund and finance structures.
The trade-offs: operating businesses need a business permit with real substance in Luxembourg, set-up and annual service costs are high, and every company pays at least a minimum net wealth tax.
Business Structures
Which Entity Type Is Right for You?
Private Limited Company
SARL — Société à responsabilité limitée
The usual choice for operating businesses. 1–100 shareholders; managers can be individuals or companies and need not be shareholders. Set up before a notary.
- Min. capital
- €12,000 (fully paid)
- Formation
- Notarial deed
- Liability
- Limited to capital
Simplified SARL
SARL-S
From €1 of capital, formed by private deed without a notary. Shareholders must be individuals, and each person can hold shares in only one SARL-S.
- Capital
- €1–12,000
- Shareholders
- Individuals only
Public Limited Company
SA — Société anonyme
For larger businesses, investors and listings. A single director is allowed when there is a single shareholder.
- Min. capital
- €30,000 (25% paid)
Special Limited Partnership
SCSp — Société en commandite spéciale
No legal personality and no minimum capital; widely used for investment funds and holding structures.
- Min. capital
- None
Sole Trader
Entreprise individuelle
No capital but unlimited liability; needs a business permit and registration with the business register.
- Liability
- Unlimited
Tax Environment
Luxembourg's Corporate Tax — 23.87% in the Capital
Corporate income tax is 14% on profits up to €175,000 and 16% above €200,000 (from 2025), plus a 7% solidarity surcharge, plus municipal business tax — 6.75% in Luxembourg City. The combined rate is 23.87% for larger profits. Companies also pay 0.5% net wealth tax, with a minimum of €535, €1,605 or €4,815 depending on the balance sheet. Qualifying IP income gets an 80% exemption, and investment tax credits run at 12% (18% for digital and ecological investments).
The income tax treaty signed in 1996 has applied since 2000 (amended by a 2009 protocol). It cuts dividend withholding to 5% for US companies with 10% or more, or 0% where Luxembourg's exemption conditions are met. The saving clause keeps US citizens fully taxable in the US. The US–Luxembourg Social Security agreement (1993) prevents double contributions.
US citizens and Green Card holders are taxed on worldwide income. Owning a Luxembourg company usually means Form 5471, and an FBAR if your foreign accounts exceed $10,000 in total. From tax years starting in 2026, GILTI is renamed net CFC tested income (NCTI). Whether Luxembourg profits are taxed in the US each year depends on the effective rate and your structure — get US international tax advice before you incorporate.
Step-by-Step Process
How to Register a Company in Luxembourg
An SARL or SA is formed by notarial deed; the notary files it with Luxembourg Business Registers (LBR) and publishes it in the electronic gazette (RESA). Plan the business permit early — it is often the longest step.
Check the business permit Permit
Most commercial, craft and many liberal activities need a business permit from the Ministry of the Economy (€50; decision within 3 months). It requires integrity, any required qualifications, a fixed establishment in Luxembourg and a manager who runs the business effectively and permanently.
Choose the form and name Name
SARL, SARL-S or SA; check the name is free in the register.
Open a bank account and pay in capital Capital
Pay the capital into a blocked account; the bank issues a certificate for the notary (not needed for a SARL-S formed by private deed).
Sign the deed and register Notary & RCS
The notary executes the deed and files it with the LBR (register fee about €106 + VAT plus small duties).
Register beneficial owners, VAT and staff After registration
File beneficial owners in the RBE within 1 month, register for VAT if needed, and register employees with the CCSS.
Want to run the company from Luxembourg? A company does not give you residence — see the self-employed and other permits on our Luxembourg page.
Costs & Fees
What Does It Cost to Register a Company in Luxembourg?
| Cost item | Notes | Amount |
|---|---|---|
| Notary | Regulated tariff based on capital; market estimates for a standard SARL (SA more). Not needed for a SARL-S. | about €1,000–2,500 |
| Register and registration duties | LBR registration plus fixed registration duty and publication. | about €200–300 |
| Business permit | Ministry of the Economy stamp duty. | €50 |
| Share capital | SARL minimum — stays in the company, not a fee. | €12,000 |
| Domiciliation / office | Only licensed professionals may domicile companies (market estimate). | about €1,500–5,000/yr |
| Accounting | Simple or dormant company to active operating company (market estimate). | about €1,500–12,000/yr |
Official fees from LBR and Guichet.lu; service prices are market estimates. Source: LBR: RCS fees · Guichet.lu: business permit · Luxtoday: company costs
Ongoing Obligations
Post-Registration Requirements
Annual accounts
Approved within 6 months of year-end and filed with the LBR within 7 months (€19 if on time).
Corporate tax returns
Corporate income tax, municipal business tax and net wealth tax returns every year — including the minimum net wealth tax.
VAT returns
Monthly, quarterly or annual depending on turnover, once registered.
Beneficial owners
Keep the RBE up to date within 1 month of any change. Since the 2022 EU Court ruling it is no longer open to the public.
Audit
Needed above 2 of 3 thresholds for 2 years running — €7.5 million balance sheet, €15 million turnover, 50 employees.
Expert Notes
What Americans Should Know Before Registering in Luxembourg
Substance matters
The business permit requires a fixed establishment and effective management in Luxembourg — a letterbox company will not qualify for an operating business.
Budget for annual costs
Domiciliation, accounting and the minimum net wealth tax add up to several thousand euros a year even for a small company.
Plan dividends with the treaty
15% withholding drops to 5% or 0% for US companies with 10% or more — individual US shareholders get less relief.
The US side
Form 5471 and NCTI apply to US owners. Some structures elect pass-through treatment — get US advice first.
A company does not give you residence
Non-EU founders apply from abroad for a self-employed permit, with a business plan and the business permit.
Registering a Luxembourg company is right for you if…
- You need an EU company with real activity or staff in Luxembourg.
- You can budget for notary, domiciliation and accounting costs.
- You have US tax advice on Form 5471 and NCTI.
- You have a separate plan for residence if you will live in Luxembourg.
We work with Luxembourg notaries, corporate service providers and accountants who form companies for non-EU founders. Directories like LocalVouch can help you find more.
FAQ
Frequently asked questions
What is the corporate tax rate in Luxembourg?
23.87% combined in Luxembourg City for profits above €200,000 (16% corporate tax plus 7% surcharge plus 6.75% municipal tax); the corporate rate is 14% on profits up to €175,000.
What company type do Americans usually use?
An SARL with €12,000 of fully paid capital, formed before a notary. A SARL-S can start from €1 but only individuals can own one.
Do I need a business permit?
For most commercial, craft and many liberal activities, yes — from the Ministry of the Economy (€50). It requires a fixed establishment and effective management in Luxembourg. Pure holding companies usually do not need one.
How long does it take to register a company?
The notary and register steps take days to a few weeks; the business permit can take up to 3 months, and bank accounts for non-resident owners often take longer.
When do I need to register for VAT?
Above €50,000 turnover a year (since 2025), or earlier by choice. The standard rate is 17%.
Luxembourg
Everything about moving to Luxembourg
Company formation · other countries
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