Doing business in Luxembourg

Set up a business

Step 1: Prerequisites

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Before applying for a business permit, it is essential that applicants ensure they satisfy the following business permit conditions:

  • professional integrity;
     
  • professional qualification with regard to the planned activity:
  • establishment in Luxembourg; the business permit is only granted if there is a physical installation in Luxembourg that includes an infrastructure suitable for the nature and scale of the concerned activity;
     
  • effective and permanent management of the business by the business permit holder who must:
    • effectively manage and run the company in person, on a regular and daily basis (a distant home address could be detrimental to the application). The permanent presence of a third person, even if authorised to commit the business, is not enough to make up for the absence of the business permit holder;
    • be connected to the business (as an owner, associate, shareholder or salaried worker of the business);
       
  • compliance with tax and business obligations: the business manager must not have evaded business and tax obligations in his previous or current business activities, whether these activities were carried out under his own name or through a company run by said person.


 

Step 2: Business Permit

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Most commercial activities, the crafts sector or certain liberal professions require a business permit from the Directorate General for SMEs and Entrepreneurship of the Ministry of the Economy.

  Applying for a business permit

Certain liberal professions are subject to a specific business permit.

Before they enter Luxembourg, third-country nationals must apply for a temporary residence permit together with their business permit application. EU nationals are entitled to free circulation within the EU. They can live and work anywhere in the EU.

EU-based companies may provide temporary and occasional services in Luxembourg without any business permit. Craftsmen and manufacturers must nevertheless notify the Directorate General for SMEs and Entrepreneurship before they start.


 

Step 3: Incorporation and registration

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Whatever their legal form, Luxembourg-based businesses must be registered with the Luxembourg Trade and Companies Register.

  Setting up and registering a business


 

Step 4: Registration with the Social Security Administration

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The holder of the business permit must register with the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS) either as a self-employed worker or as a salaried employee.

  Registering as a self-employed worker

  Registering a salaried employee

Before they register salaried workers, the business must register as an employer.


 

Step 5: Registration with the Tax authorities

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Luxembourg-based businesses must register for VAT with the Luxembourg Land Registration & Estates Department (Administration de l'enregistrement et des domaines - AED).

The Luxembourg Inland Revenue (Administration des contributions directes -ACD) should be contacted.

  Registering for Value Added Tax (VAT)

For income tax queries, the Luxembourg Inland Revenue contacts the business directly by post.

Investor settlement support

Luxembourg offers a full range of custom-made support designed to give a head start to new ventures.

 

Industrial sites

Land may be provided at favourable rates in one of the numerous national, regional or municipal industrial parks. The industrial sites are fully equipped with all public infrastructures and utilities: connection to transport and telecommunications networks, supply of water, sewer, electricity and natural gas. All are located close to major international highway, railway and airport networks.

 

Incubators

Business and innovation centres offer a platform to host and assist entrepreneurs or technology-based companies wishing to establish a new and innovative activity in Luxembourg. Incubators provide the appropriate support and advice to new projects facilitating their development and growth. They also serve as relay-centres offering a temporary location to foreign companies setting up their business in Luxembourg.

 

Financial support

Financial support may be granted for the funding of specific projects in order to complement equity and bank financing. Support may be granted to small and medium-sized companies, to companies located in development areas. Financial support for research, development and innovation investment focusing on new products, services or processes, as well as for environmental protection or efficient energy utilisation is possible. Capital grants from the Government as well as medium and long-term loans from the public-law banking institution (SNCI) are available.