Europe · Company formation
Company formation in Luxembourg
An EU holding company, the Soparfi, offering participation exemption and wide treaty access.
At a glance
- Entity
- Société à responsabilité limitée (Sàrl) — private limited company
- Corporate tax
- ~23.87% aggregate in Luxembourg City (2026): 16% corporate income tax + 7% solidarity surcharge + 6.75% municipal business tax; lower brackets from 14% below EUR 175,000. A qualifying Soparfi holding pays 0% on exempt dividends and capital gains. Confirm current municipal rate outside the capital.
- Incorporation time
- ~2–4 weeks (name/authorisation, notarial deed, RCS registration)
- Minimum capital
- EUR 12,000, fully subscribed; since 2 June 2026 the cash payment may be deferred up to 12 months after incorporation
- Resident director
- Not required by law — managers may be of any nationality or residence; local substance advisable to secure tax residence
- Audit
- Small-company exemption; statutory audit by a réviseur d'entreprises agréé only if 2 of 3 thresholds are exceeded — EUR 7.5m balance-sheet total, EUR 15m turnover, 50 employees (thresholds raised by the October 2024 reform)
- Remote set-up
- Mostly; a notarial deed is mandatory but can be signed by proxy under a power of attorney, so no travel is required
- Government fee
- EUR 75 fixed registration duty (AED) plus RCS filing of roughly EUR 15–200 (as of 2026); the notary's fee is separate and typically EUR 1,800–3,000
- Best for
- An EU holding company, the Soparfi, offering participation exemption and wide treaty access.
The process
- Reserve the company name with the RCS and, for a trading company, obtain a business-establishment authorisation from the Ministry of the Economy
- Draft the articles of association and subscribe the EUR 12,000 capital — the cash payment may now be deferred up to 12 months, so a blocked bank account is no longer required at incorporation
- Execute the constitutive deed before a Luxembourg notary, in person or by proxy under a power of attorney
- The notary registers the deed with the AED and files it with the RCS/RESA; the company acquires legal personality on registration
- Register for VAT and, if employing staff, with the tax and social-security authorities
What can go wrong
- Substance matters: securing Luxembourg tax residence and treaty and participation-exemption benefits requires genuine local substance (resident managers, office, decisions taken in Luxembourg); thinly-staffed holdings are increasingly challenged under EU/ATAD rules
- The Soparfi participation exemption requires a 10% holding (or EUR 1.2m acquisition cost) held for 12 months in a subject-to-tax subsidiary; anti-hybrid, interest-limitation and general anti-abuse rules apply
- Corporate bank-account opening is a separate, KYC-heavy step that can take several weeks; the June 2026 deferred-capital reform now lets you incorporate before the account is open
- A low-taxed Luxembourg holding can be caught by the founder's home-country CFC rules — confirm the position before use
Popular relocation routes
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Form a company in Luxembourg?
One named person on the file, an honest read on tax and substance, and a fixed quote before you commit.