Last reviewed October 7, 2026 · By the NYBACS advisory team
Short answer
Yes — non-residents and foreign companies can fully own a Luxembourg SARL or SA. A SARL needs at least €12,000 of fully paid capital and an SA at least €30,000 subscribed, and both are created by notarial deed, registered with the Luxembourg Business Registers (RCS) and published in the RESA gazette. Commercial activities also need a business permit from the Ministry of the Economy, while pure holding companies generally do not.
Key takeaways
- The SARL requires €12,000 of fully paid share capital; the SA requires €30,000 subscribed, with at least a quarter of each share paid up at incorporation.
- SARL and SA are formed by a deed signed before a Luxembourg notary, who files the incorporation with the RCS kept by Luxembourg Business Registers (LBR).
- Beneficial owners must be declared in the Register of Beneficial Owners (RBE), also run by LBR, shortly after registration and kept up to date.
- Trading, craft and many service activities require a business permit (autorisation d'établissement), which depends on the qualifications and good repute of the designated manager.
- For 2025 the headline corporate income tax rate fell to 16%, giving a combined rate of about 23.87% in Luxembourg City once solidarity surtax and municipal business tax are included.
Luxembourg at a glance
| Common entity for foreign owners | SARL (société à responsabilité limitée) for subsidiaries and SMEs; SA (société anonyme) for larger or regulated structures; SARL-S for individual micro-founders |
|---|---|
| Company registry | Trade and Companies Register (RCS), operated by Luxembourg Business Registers (LBR); publication in the RESA electronic gazette |
| Foreign ownership | Generally 100% permitted; regulated sectors such as finance need separate licensing |
| Local director / resident requirement | No general nationality or residency rule for managers, but the business permit and tax substance expectations favor real local management |
| Registered office | Required in Luxembourg; can be provided by a licensed domiciliation agent |
| Key tax registrations | Direct tax file with the ACD, VAT with the AED (Enregistrement), social security (CCSS) on hiring |
| Recurring compliance | Accounts approved within six months and filed with LBR within seven months of year-end; tax returns; RBE updates |
| Typical setup timeline (indicative) | Often two to four weeks for a holding SARL; longer when a business permit or bank onboarding is involved |
Indicative only. Rules, filings, fees, ownership restrictions and timelines vary and change — confirm the current position before acting.
SARL, SA or SARL-S: which Luxembourg structure fits?
| SARL | SA | SARL-S | |
|---|---|---|---|
| Minimum capital | €12,000, fully paid | €30,000, at least 25% of each share paid | €1 to €12,000 |
| Formation | Notarial deed | Notarial deed | Private deed allowed |
| Owners | 1 to 100 shareholders | One or more shareholders | Individuals only |
| Typical use | Operating subsidiaries, holding companies | Larger groups, listed or fund-related vehicles | Small owner-run businesses |
The SARL is the default for foreign-owned subsidiaries and many holding companies (often called Soparfis). The SA suits structures expecting share transfers, a board of directors or a capital-markets dimension. The SARL-S is designed for individual entrepreneurs, cannot be held by a company, and is therefore rarely suitable for a foreign group.
How incorporation works step by step
- Confirm the name with an LBR name search and decide the activity, which determines whether a business permit is needed.
- Arrange the registered office, either through a lease or a domiciliation agreement with a licensed domiciliation agent.
- Open a bank account and pay in the capital; the bank issues a blocking certificate (certificat de blocage) that the notary needs. Contributions in kind require an independent auditor's (réviseur d'entreprises) report in certain cases.
- Sign the deed of incorporation before a Luxembourg notary, in person or through a proxy holding an apostilled power of attorney. The articles are usually in French, German or English.
- Notary files with the RCS. LBR registers the company and it is published in the RESA electronic gazette.
- Declare beneficial owners in the RBE within the statutory period after registration.
- Apply for the business permit through the MyGuichet platform where the activity requires one, before trading.
Documents needed from foreign shareholders
- Individuals: passport, proof of address and, for managers subject to the business permit, evidence of professional qualifications and an extract of criminal record from each country of residence in recent years.
- Corporate shareholders: a recent extract from the parent's registry, its articles, a board resolution approving the investment and a power of attorney for the notarial signing, generally apostilled.
- Source of funds and structure chart: banks, notaries and domiciliation agents all apply anti-money-laundering checks and will ask who ultimately owns and controls the company.
Notaries and domiciliation agents are obliged entities under Luxembourg AML law, so expect KYC from them as well as from the bank. Preparing one consistent pack saves repeat requests.
Tax, VAT and the business permit after registration
After registration the company registers with the Administration des contributions directes (ACD) for corporate income tax and municipal business tax, and with the Administration de l'enregistrement, des domaines et de la TVA (AED) for VAT where it carries on economic activity. Pure holding companies often have limited VAT status, which needs case-by-case review.
The tax picture for an operating company combines:
- corporate income tax (16% from tax year 2025) with a solidarity surtax;
- municipal business tax, which depends on the commune;
- an annual net wealth tax, including a minimum charge for many companies.
The business permit is granted to the company but tied to a designated manager who must meet good-repute and, for some activities, professional-qualification conditions and have a real link to the business. A fixed physical establishment in Luxembourg is generally expected for permit-holding activities.
Banking, substance and annual compliance
Luxembourg banks are experienced with international structures but selective. Expect detailed KYC on the group, its beneficial owners and the expected flows; holding companies with no operations may find onboarding slower than operating companies.
Substance matters for tax: treaty benefits and EU directive protections depend on the company being genuinely managed in Luxembourg. Typical indicators are local board meetings, decision-makers with relevant expertise, local records and, for operating companies, staff and premises.
Each year the shareholders approve the annual accounts within six months of year-end, and the accounts are filed with LBR within seven months. Larger companies need an approved statutory auditor. Tax returns are filed with the ACD, VAT returns with the AED, and changes in managers, address or beneficial owners must be filed with the RCS and RBE.
Is Luxembourg the right destination for you?
Luxembourg is strongest for holding, financing, investment and fund-adjacent structures that benefit from its treaty network and EU membership, and for companies serving the Benelux, French and German markets from one base. It is less suited to a lightweight trading entity with no local presence, because of capital levels, notarial costs and substance expectations.
Compared with the Netherlands, both are established EU holding locations; the Dutch BV has no meaningful minimum capital, whereas Luxembourg requires €12,000. Compared with Switzerland, Luxembourg offers full EU single-market access but no cantonal tax competition. The right choice depends on where decisions will actually be taken and where income arises.
Common mistakes to avoid
- Trading before the business permit has been granted, or appointing a manager who does not meet the permit conditions.
- Treating a Luxembourg holding company as a mailbox entity and losing treaty or directive benefits for lack of substance.
- Missing the RBE declaration deadline after incorporation or after a change in ownership.
- Assuming a SARL-S can be owned by a foreign parent company — it is reserved for individuals.
- Filing annual accounts with LBR after the seven-month deadline and incurring late-filing consequences.
- Overlooking the minimum net wealth tax when budgeting for a dormant or low-activity company.
Documents and records to prepare
- Draft articles of association in French, German or English
- Bank blocking certificate confirming the paid-in capital
- Domiciliation agreement or lease for the registered office
- Passports and proof of address of shareholders and managers
- Apostilled parent-company extract, articles and investment resolution
- Apostilled power of attorney for the notarial signing
- Criminal record extracts and qualifications of the business-permit manager, where applicable
NYBACS 360° support
How NYBACS helps
- Assesses whether a SARL or SA fits your holding, financing or operating plan, and whether a business permit will be needed.
- Coordinates the notary, domiciliation agent and bank through our Luxembourg partners and keeps one consistent KYC pack.
- Maps beneficial owners across multi-tier groups for the RBE and the bank.
- Builds a substance checklist — board composition, meetings and records — aligned with your tax adviser's recommendations.
- Sets up the annual calendar for accounts approval, LBR filing, tax and VAT returns.
Frequently Asked Questions
Do I need a Luxembourg-resident manager?
There is no blanket residency rule in company law. In practice, the business permit and tax-substance expectations often make at least one locally based manager advisable, especially for operating companies and holding companies relying on treaty benefits.
Does a holding company need a business permit?
A company limited to holding and managing participations generally does not. Once it provides services, trades or carries on other commercial activity, the permit question must be revisited.
Can the articles be drafted in English?
Yes. Notaries commonly execute deeds in English, though some may attach a French or German version. Publication in RESA follows the language of the filed documents.
What does the minimum net wealth tax mean for a new company?
Many Luxembourg companies are subject to a minimum annual net wealth tax regardless of profit, with the amount depending on the size and composition of the balance sheet. It should be included in the budget even for a low-activity company.
