What are the advantages to set up a company in Luxembourg nowadays? The Grand Duchy of Luxembourg is the country with the highest income of the population. This was made possible thanks to developed banking and corporate law, which attract capital here with unique opportunities.
The total size of Luxembourg investment funds is second only to US funds. This is due to the easy adapting of Luxembourg Government its legislation to the demands of the times. For example, the country was the first to develop and adopt legislation on licensing cryptocurrency exchanges. In addition, Luxembourg prioritizes the development of technology-based businesses. To this end, Luxembourg has tax incentives for investment activities.
Luxembourg is an attractive business location. The country has an active economic policy that encourages international businesses.Atrium Business Solutions
Why set up offshore company in Luxemburg
Luxembourg corporate law is very loyal to foreign entrepreneurs and provides non-resident businessmen with convenient business conditions and not complicated company registration in Luxembourg. First of all, it is worth noting that banking secrecy is guaranteed as this condition is enshrined in the legislation of the country. In addition, there are no restrictions on activities organized with the help of foreign capital. The absence of direct taxation on the property of third parties in the territory of Luxembourg, as well as the absence of a tax for property heirs, are also attractive for foreign investors.
The main business of this country, as mentioned above, is investment funds. Therefore, for those businessmen who would like to manage their assets through investment funds and want to use Luxemburg company registration for this purpose, it is necessary to carefully look at the local legislation and business practices that provide a lot for such a business.
The next type of business that has become widespread there is holding companies registered in Luxembourg. For holding companies there is a regime of partial exemption of income received from subsidiaries of foreign companies in the form of dividends or investment income and capital gains from corporate tax if certain requirements are met.
Ways to register company in Luxemburg
Start company in Luxemburg as a foreign investor is quite simple, given that the same rules apply to local and foreign entrepreneurs. The first step in opening a successful company in Luxembourg is to choose the right type of company.
An important aspect that must be taken into account is that Luxembourg is one of the most important financial centers in the world, and many business structures here are intended for investment purposes. That is why choosing the right type of company is important when deciding on upcoming operations.
Company types you can register
According to Luxembourg Commercial Law, the following several types of legal entities can be chosen to set up company in Luxemburg:
- Société Anonyme (SA) – a joint-stock company with limited liability.
- Societe a Responsabilite Limite (SARL) – limited liability company.
- Société à Responsabilité Limitée Unipersonnelle (SRLU) – Private limited liability company (analogue of an individual entrepreneur).
- Société en Nom Collectif (SENC) – Partnership with unlimited liability.
As in other countries of the world, the most common types of companies are limited liability companies (SARL) and joint-stock limited liability companies (SA).
Requirements for companies
The authorized capital of SARL is 12,000 euros, which must be paid in full when registering offshore company Luxembourg. Share capital can be expressed in a currency other than the euro and paid in cash, but you can also make contributions in the form of real or personal property, depending on the current situation.
Unlike a joint-stock company (SA), contributions (shares) of SARL are not subject to public sale and cannot be offered for trading on the stock exchange. Circulation of shares in SARL is limited, and any transfer is subject to approval by members of such a company. These measures are taken in order to give the company control of its future partners.
The minimum authorized capital of SA is 30,000 euros and must be paid at the time of registration not less than 25% of this amount. The remaining 75% of the authorized capital of the joint-stock company must be paid during the year.
In practice, the authorized capital and SARL and SA are paid in full before the registration of the company, as the initial costs of legal, banking and other services associated with Luxemburg company formation will be significant and it makes no sense to delay the payment of the share capital.
The conditions of starting a joint-stock company (SA) in Luxembourg:
- forming by one director and one shareholder;
- the minimum amount of the authorized capital of €30,000;
- requires a virtual office;
- to run the business most companies require permission from government agencies.
Registering limited liability company (SARL) in Luxembourg commercial register requires:
- minimum of two and a maximum of 40 shareholders;
- minimum authorized capital of €12,000;
- one director is required.
All companies recorded in the register of commerce and companies Luxembourg must be members of the Federation of Luxembourg Industrialists, and the Chamber of Commerce, which mediates between the government and entrepreneurs.
Benefits to open company in Luxemburg
A small state in the very center of Europe has a magical appeal to all corporations in the world. The Grand Duchy captivates foreign investors with its long history of confidentiality, reliability and of course potential profitability. Luxembourg has long assessed its capabilities and has actively taken advantage of its advantages over other jurisdictions. The country has developed preferential taxation attracting foreign investors to open a company in Luxemburg.
Luxembourg is particularly interesting for capital allocation, registration of patents, licenses, and trademarks. The state has developed a taxation system that is optimal for holdings. The companies that are registered in the form of a holding in accordance with the 1929 model are completely exempt from taxes. The only costs for the owners of holdings are stamp duty in the amount of 1% of the constituent capital and the annual quota tax (0.2% of the capital), as well as the state duty for entering company data into the Luxembourg companies registry during registration.
Quick and easy offshore company formation in Luxemburg
Luxembourg is a jurisdiction that provides a stable business and financial environment, which is the most important factor when choosing a jurisdiction for doing business for many people, especially in today’s unstable world. Farsighted government and creative practices preserve and constantly increase Luxembourg’s competitiveness in the world.
Luxembourg offers a variety of forms for doing business, from an individual entrepreneur and limited partnerships to a family and ordinary corporation. Additionally, double taxation agreements are another bonus to Luxembourg companies register being another tool to reduce the tax burden. From the foregoing, it’s possible to conclude that Luxembourg is a small but very interesting and large in potential European country. There the creation of investment structures will be very beneficial for businessmen with a vision of the development prospects of innovative startups.