The economic performance of Luxembourg as part of its participation in the European Economic Community and in the European Union places it on the top of the member countries of this organization. Luxembourg is also the location of numerous international organizations. The Luxembourg Government offers a variety of incentives to foreign investors and locals, consisting of subsidies, tax cuts, legislation that favors investor rights and a coherent and transparent legislative structure.
One of the main advantages of Luxembourg is its policy of economic diversification by attracting over 100 additional industries, expanding the range of services offered by banks, insurance and reinsurance companies, the emergence of an agri-food sector, the creation of more performing entities in commerce and tradecrafts. Therefore, many entrepreneurs are interested in Luxembourg company formation, regardless it it’s a start-up or a company that expands its business operations on other markets. Regarding the Luxembourg company formation procedure, these are the basic steps:
Selecting a name
There are no special regulations regarding the name selection for a company, as the name mustn’t necessarily be related to its purposes and fictional names are allowed as long as the respective company has a unique name, that isn’t already taken by any other Luxembourg resident company.
Drafting the Articles of Association
The first step in the Luxembourg company formation process is the preparation of the Articles of Association by the company’s founders. The documents must be submitted to a notary and can be written Luxembourgish, German, French or English. However, documents originally written in English must be translated in one of the state’s official languages and the translation must be included with the original documents when it’s submitted to the notary.
Depositing the formation capital
For contributions made to a company’s capital in cash, the respective sum is required to be deposited into a blocked bank account of a European bank. The bank sends a written statement to the notary, confirming that the capital was deposited. For contributions that are not made in cash, an independent auditor must issue a report and send it to the notary. The report is used to verify that the value of the contributions in kind matches the value of the company shares issued in return.
The documentation required for Luxembourg company formation must include a copy of the applicant’s passport or other identification document, an excerpt from the commercial registry – for legal entities, copies of the identification documents of the company directors and representatives, power of attorney for the representatives of the shareholders – the persons who appear in front of the notary and a declaration of the company’s beneficial owner.
In addition, the Articles of Association are signed by the founding shareholders or by their legal representative, in accordance with power of attorney.
Company registration and publication
The final step of the Luxembourg company formation process is the registration of the company’s Articles of Association, which are entered into the commercial registry and afterwards published in the Official Gazette. Usually, a company has full legal capacity after the notarization of its documents and isn’t required to await its publication in the commercial registry.
Obtaining trade licenses
In some cases, it may be necessary to obtain a trading certificate, depending on the type of business activities conducted by the company.
Luxembourg company formation costs
The Luxembourg company formation costs vary, depending on the business structure and the amount of share capital and consist of fees for the drafting of the Articles of Association, notary fees, fees for registering into the commercial register and fees for the publication in the Official Gazette.