Luxembourg

General Business Information

Founded in 963, Luxembourg became a grand duchy in 1815 and an independent state under the Netherlands. It lost more than half of its territory to Belgium in 1839 but gained a larger measure of autonomy. Full independence was attained in 1867. Overrun by Germany in both world wars, it ended its neutrality in 1948 when it entered into the Benelux Customs Union and when it joined NATO the following year. In 1957, Luxembourg became one of the six founding countries of the European Economic Community (later the European Union), and in 1999 it joined the euro currency area. In January 2013, Luxembourg assumed a nonpermanent seat on the UN Security Council for the 2013-14 term. [Source: CIA World Factbook]

The United States and Luxembourg historically work in tandem on almost every major U.S. foreign policy priority, including and importantly on business and trade issues. While Luxembourg represents a small market of about half a million people, it counts as a “high-value” market purchasing valuable American exports such as Boeing commercial aircraft, information and communications technology equipment but also services and intellectual property such as medical research and entertainment. Luxembourg has one of the most open and competitive economies in the world and is a strong development center for business, research and technology. [Source: US Embassy in Luxembourg]

Fast Facts

[Source: Wikipedia, CIA World Factbook]

Establishing a Business

PREREQUISITES

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

• Professional integrity
  1. professional qualification with regard to the planned activity
  2. on-going commercial activities (including industrial activities)
  3. identification as “liberal” professions
  4. identification as in the crafts sector
• 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:
  1. 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 authorized to commit the business, is not enough to make up for the absence of the business permit holder;
  2. Be connected to the business (as an owner, associate, shareholder or salaried worker of the business).
  3. 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.

OBTAIN A BUSINESS PERMIT

Most commercial activities, the crafts sector or certain liberal professions require a business permit from the Luxembourg Ministry of Small and Medium Sized Businesses.

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 Ministry of Small and Medium-Sized Businesses before they start.

INCORPORATION AND REGISTRATION

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

REGISTRATION WITH THE SOCIAL SECURITY ADMINISTRATION

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

REGISTRATION WITH THE TAX AUTHORITIES

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.
For income tax queries, the Luxembourg Inland Revenue contacts the business directly by post. [Source: Luxembourg for Business]

American Corporate Services offers experience and expertise for astute investors who wish to establish offshore businesses. Whether an investor wishes to immigrate or simply to establish a business entity, our network of professionals has the ability to advise, assist, direct and enable clients to understand and navigate the process for Luxembourg company formation.

Our services include everything you need for starting a new business in Luxembourg. In addition to helping to establish a Luxembourg business bank account, helping you set up your business to conform to Luxembourg accounting standards and to comply with Luxembourg taxes, we also offer boutique amenities such as Luxembourg secretarial services. We can even help you to create a Luxembourg virtual office that will appear to others as though you are actually in Luxembourg, even though you may be just about anywhere else on the globe at the time. Our business is making your investment a success.