Starting a business in Luxembourg: the 5 steps (SARL)

The process at a glance

Setting up a SARL in Luxembourg means completing five steps with different parties: the bank, the notary, the register, the ministry, and the tax and social security authorities.

According to Guichet.lu, the SARL is the most common company form in Luxembourg: about two thirds of existing companies are SARLs. The order matters, because each step relies on a document produced by the previous one. Here is the checklist, from idea to operating company.

Still choosing a legal form? Our article What is a SARL-S? covers the simplified version of the SARL, with share capital between €1 and €12,000.

Capital: €12,000 in a blocked account

Forming a SARL requires minimum share capital of €12,000. Before the instrument of constitution is signed, this capital is paid into a bank account opened in the name of the company being formed. The money stays blocked until incorporation.

• To open the account, the bank asks in particular for the draft articles of association and copies of the company representatives’ ID.
• It may also ask for the registered office address, the representatives’ legal address and, optionally, the business permit.
• Opening the account is subject to “know your customer” anti-money-laundering checks.

Articles signed before a notary

For a SARL, the instrument of constitution must be drawn up before a notary. It must include certain particulars set by law, such as the identity of the signatories, the company’s form and name, its registered office, its corporate purpose and the amount of subscribed capital.

The company name must clearly differ from that of any other business; its availability can be checked by requesting a name availability certificate from the LBR. On costs, Guichet.lu lists notary fees, RCS publication fees and any fees for administrative authorisations, among others.

RCS filing and publication on RESA

Every newly formed company must register with the Trade and Companies Register (RCS), which is managed by Luxembourg Business Registers (LBR). For a notarial deed, the notary takes care of it: they register the deed, then file it electronically with the RCS no later than one month after the articles are signed.

• The registration includes, in particular, the company name, legal form, registered office address, corporate purpose, date of incorporation and duration.
• A SARL’s articles are published in full on the Electronic Compendium of Companies and Associations (RESA), on the day of filing or on a chosen date within 15 days.
• Deeds can only be relied upon against third parties once published on RESA.

The business permit

As a rule, a business permit (autorisation d’établissement) is needed to carry out, as a sole trader or through a company, a commercial activity (including hospitality), a craft activity or certain liberal professions. It is granted if the conditions of professional integrity and, where required, professional qualification are met.

• The stamp duty amounts to €50.
• You can apply online via MyGuichet.lu with a LuxTrust certificate, paying the duty during the procedure.
• The final grant requires the articles to be filed with the RCS. For a company, the application is made by the agent registered with the RCS, which is why this step follows the filing.
• Applications are usually processed within 3 months of receiving the complete file.

VAT and social security: the first registrations

To register for VAT, the company files an initial declaration with the Registration Duties, Estates and VAT Authority (AED). Taxable persons who are not exempt from registration must register within 15 days of starting their activity. To understand how the tax works, read our Luxembourg VAT guide or try the Luxembourg VAT calculator.

On the social side, self-employed workers register with the Joint Social Security Centre (CCSS). Managers of a SARL who hold the business permit are treated as self-employed if they are partners holding more than 25% of the shares. To go further, see our article on CCSS for the self-employed and the CCSS contribution estimator.

Léa’s example, from idea to open café

A fictional example, for illustration only.

1. 1
   Léa drafts her articles, opens an account in the name of her future SARL and pays in €12,000. Her bank gives her a blocking certificate.
2. 2
   She signs the instrument of constitution at her notary’s office, handing over that certificate.
3. 3
   The notary registers the deed and files it with the RCS within the month; the articles are published on RESA. The release certificate then frees up the capital.
4. 4
   A café is a hospitality business: Léa applies for her business permit on MyGuichet.lu and pays the €50 online.
5. 5
   She files her initial declaration with the AED and sorts out her CCSS registration. Five steps ticked: her business is ready.

Once the company is up and running, bookkeeping starts with the very first invoice. Zuelen for companies brings bank, invoices, VAT and the PCN chart of accounts together in one workspace.

This article is general information and does not constitute legal advice. For your own situation, check the official sources or consult a professional.