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Company Incorporation
Luxembourg
TOTAL ESTIMATION OF COSTS of new
company 16,972 EURO
See here a standard invoice.
In Luxembourg We have two
main types of holding companies:
1) the 1929 Holding company, which is virtually tax free as it is not
subject to the Luxembourg corporate income tax. Due to its special tax status, a
1929 Holding is excluded from the benefit of the double tax treaties signed by
Luxembourg. It can also not benefit from the advantages of the EU
parent-subsidiary directive.
A 1929 Holding company is restricted to owning shares in other companies,
Luxembourg or foreign, and may only lend money to its subisidiaries.
Please see here more
details. (you'll need Adobe Acrobat Reader, pdf password protected file)
to ask for the password.
2) the Soparfi company.
This company is a normal holding company, subject to the income tax in
Luxembourg of 30.38%. It is commonly used for taking participating interests in
EU countries or countries where Luxembourg has a double tax treaty. The Soparfi
company is one of the most efficient holding vehicle in the EU.
Please see here
more details. (you'll need Adobe Acrobat Reader, pdf password protected file)
to ask for the password.
FORMATION PROCEDURES FOR A
LUXEMBOURG COMPANY
Both the 1929 Holding Company and the 1990 « SOPARFI » have similar
formation requirements.
1. Name approval
The name of the company must be different from that of any other company
already existing in Luxembourg. Clearance of the name must be made with the
Companies’ Registrar and is usually available by return of post. It is only
protected, however, after the public deed of incorporation has been drawn up and
published.
2. Share Capital
The minimum share capital for a Luxembourg company is set at 31.000 EUROS or
its foreign currency equivalent and must be transferred on a bank account opened
in the name of the company in formation. The bank will be asked to send a
certificate to the Notary drawing up the deed of incorporation, stating that the
funds for the formation of the company are held in a blocked account.
Note :
The corporate bank account can either be opened with a local bank or with a well
established foreign bank (recognized by the Notary).
3. Shareholders
A minimum of 2 Shareholders is required. Shareholders can either be
individuals or companies with any nationality and place of residence. Their full
name, occupation, and residence or registered office in the case of corporations
must be provided.
Note :
Nominee Shareholders are often used at the time of incorporation.
4. Directors
Minimum of 3 Directors who may be individuals or companies and need not to
be resident in Luxembourg.
5. Auditor
An auditor who is either a « Commissaire aux Comptes » or a « Réviseur
d"Entreprises » must be appointed. The name and address of the Auditor must be
stated in the published deed of incorporation.
6. Domicile
The registered office must be in the Grand Duchy of Luxembourg but may be
transferred abroad temporarily for reasons of war, political upheaval or other «
force majeure » circumstances. A post office box is not sufficient. The
statutory books must be available at the registered office. A holding company
may have its registered office at a bank, a legal firm or an authorised trust
company. According to legal requirements, a domicilation agreement must be
signed.
7. Statutes
The statutes or Articles of Incorporation correspond to the Anglo-Saxon
Memorandum and Articles of Association. They are usually drafted by a Luxembourg
notary and may be in English but must be published with a French or German
translation.
8. Time Scale
A Luxembourg company can be incorporated within 1 or 2 days, as soon as the
share capital is credited on the corporate bank account.
The Grand Duchy of Luxembourg is situated in Western Europe
between Belgium, France and Germany and was created within the German Bund by
the treaty of Vienna of 1815. In 1867 Luxembourg gained independence from
Germany and organized itself as a constitutional monarchy with the legislative
power vested in a democratically elected parliament.
Luxembourg enjoys a mild climate, temperatures are continental
with winter (November to February) temperatures as low as -15C, while the summer
(July, August) temperatures can rise to as high as 35C.
Luxembourg is a member of OECD, the European Union, the Benelux
Union and the Belgium / Luxembourg Economic Union. The capital city is also
called Luxembourg and is the center of government, business and finance.
French and German are widely spoken and used in business circles
with French being the administrative language. English is also widely spoken,
and is used daily in commercial transactions.
Population is approximately 405,000, 20% of whom are foreign
nationals.
The legal system is based on Napoleonic code and is therefore
similar to the Belgium and French legal systems.
Exchange Control
None.
Principal Corporate Legislation
Commercial Companies Act 1915, as amended.
The maximum rate of corporation tax applicable to Luxembourg
companies is 33% but additional municipal taxes can bring the aggregate rate to
as much as 39%. There are, however, different types of companies to which
special tax regimes apply and which are therefore useful for tax planning
purposes:
Type of Company for International Trade and Investment
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1929 Société Anonyme Holding Company
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1929 Société à Responsabilité Limitee Holding Company
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1990 Société de Participation Financière (SOPARFI)
Trading and Holding Company
Powers of Company
As dictated by the objects in the articles of incorporation.
Double Taxation Agreements
Luxembourg companies with SOPARFI provisions may access
Luxembourg's extensive treaty network. The centres include:
Austria, Italy, Belgium, Japan, Brazil, Morocco, Bulgaria,
Netherlands, The Czech and Slovak Republics, Russia, Denmark, South Korea,
Finland, Spain, France, Sweden, Germany, Switzerland, Greece, CIS (air traffic
treaty only), Hungary, United Kingdom, Iceland (air traffic only), United States
of America and Ireland.
Financial Statement Requirements
Yes. An annual audit is compulsory.
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Whilst
every effort has been made to ensure that the details contained herein are correct and
up-to-date, it does not constitute legal or other professional advice. We do not accept
any responsibility, legal or otherwise, for any errors or omissions.
Please go to our Uses of offshore Companies Page where you will
find interesting information on the benefits of using offshore companies and trusts for
business and personal use, links to information on other locations and details of our
products and services.
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