Luxembourg

Personal income tax

Progressive rates ranging from 0% to 42% which is increased by a solidarity surcharge (7% or 9% depending on the taxpayer’s situation).

Corporate income tax

24.94% (for Luxembourg-City) in 2022.

Exchange restrictions

No.

Permitted currencies

Any convertible currency.

Minimum authorised capital

EUR 12,000 (SARL) or EUR 30,000 (SA) or equivalent in another currency.

Minimum share issue

Shares must be subscribed at 100% and paid up to at least 25% (SA). Shares must be subscribed and paid up at 100% (SARL).

Shelf companies

Yes.

Timescale for new entities

5 to 7 days (subject to the opening of a bank account).

Incorporation fees

€4,000- €5,000 (notary fees may vary depending on the share capital amount).

Annual fees

€10,000 (depending on the type of company, type of activities carried out, the service providers hired by the company and the services provided by third parties).

Minimum number

One (Three for an SA with more than one shareholder).

Residency requirements

No. It is advisable to have a majority of Luxembourg resident directors for tax substance but it is not a statutory requirement under company law. It is also advisable that board meetings be held in Luxembourg.

Corporate directors

Yes. Need to appoint an individual as permanent representative at the board of directors (SA).

Meetings/frequency

No frequency imposed by law. Meetings each time the company’s interest so requires.

Disclosure

SA: no. SARL: yes. Nominee possible. Ultimate beneficial owner(s) to be disclosed.

Bearer shares

SA: yes (only with a depositary). SARL: no.

Minimum number

One.

Public share registry

No.

Meetings/frequency

Yes, at least once a year.

Annual return

Mandatory annual filing.

Audit requirements

SA requires a supervisory auditor (commissaire aux comptes); SARL requires a commissaire when the number of shareholders exceeds 60. Appointment of an independent statutory auditor (réviseur d’entreprises agréé) if two of the following conditions are exceeded: average number of employees of 50; balance sheet total of €4,400,000; net turnover of €8,800,000. SA and SARL do not require a commissaire if a réviseur d’entreprises agréé is appointed.

Please note that a bill of law suggesting the abolition of the function of commissaire has been introduced on 28 July 2023 and is currently pending.

Recent Legislation

• Law of 21 July 2023 improving and modernising the Luxembourg toolbox relating to investment funds
• Law of 15 March 2023 implementing the EU Regulation 2022/858 on a pilot regime for market infrastructures based on distributed ledger technology
• Law of 7 July 2023 on the use of digital tools and processes in company law and to implement the digitalisation of the notarial profession transposes the Directive (EU) 2019/115
• Law of 14 July 2023 establishing a mechanism for the national screening of foreign direct investments
• Law of 7 August 2023 updating the law of 21 April 1928 non-profit associations and foundations
• Law of 7 August 2023 on business preservation and modernisation of bankruptcy law, implements the Directive (EU) 2019/1023
• Law of 16 May 2023 implementing Directive (EU) 2021/514 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC 7)
• Law of 15 August 2023 implementing Directive (EU) regarding the disclosure of income tax information by certain undertakings and branches
• Law of 22 December 2023 amending the law of 1967 on income tax
• Law of 22 December 2023 ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the European Union, transposing the (EU) Directive 2022/2523 (Pillar II)

Pending Legislation

• Bill of Law 8320 amending the Climate Law of 15 December 2020 in line with the provisions of Directive (EU) 2023/958
• Bill of Law 8185 implementing the Directive (EU) 2021/2167 on credit servicers and credit purchasers (NPL Directive)
• Bill of Law 8053 transposing the Directive (EU) 2019/2121 on cross-border conversions, mergers, and divisions
• Bill of Law 8342 on the use of digital tools and processes in company law, completing the initial implementation of the Digital Company Directive
• Bill of Law 8186 amending the General Tax Law of 1931
• Bill of Law 7961 amending the law of 19 December 2002 on the Trade and Companies Register and the accounting and annual accounts of companies
• Bill of Law 8291 on the digital operational resilience of the financial sector implementing some operational aspects of the Regulation (EU) 2022/2554 (DORA)

Registered office

Luxembourg.

Domicile issues

No.

Company naming restrictions

Different from existing ones.