Luxembourg

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Luxembourg

General information about the jurisdiction

The Grand Duchy of Luxembourg is a small state in Western Europe which has one of the highest level standards in the world. It is a part of Benelux, the EU, the Schengen area.

The main sources of state income are industry, agriculture, financial services, and tourism. The headquarters of many international organizations are located here.

1. Legislation

Company activities in Luxembourg are regulated by Commercial Companies Law 1915.

2. Company formation

2.1 Types of companies

The legislation provides the following corporate forms:

  • joint stock company  (SA);
  • limited liability company (SARL);
  • unlimited partnership (SENC);
  • limited partnership (SCA, SCS) etc.

Joint Stock Company (SA) and Limited Liability Company (SARL) are the most useful. Partnerships (both unlimited and limited) are not convenient because of necessity to have partners with unlimited liability.

2.2. Joint Stock Company (AG):

  • The minimum authorized capital – 31.000€, 25% of which must be paid by the moment of incorporation. 
  • Shares – registered, bearer.
  • Director–there must be the Board of Directors consisting at least 3 individuals or legal persons, no residency required. The Board may appoint a director.
  • Members – at least 2, individuals or legal persons, no residency required.  
  • Secretary – not required.
  • Publicly available information: information about directors and shareholders. The information may be hidden by using nominee service.
  • Company is obliged to keep and submit an annual financial report. An audit is required for companies with annual turnover – more than 4 600 000€, balance sheet – more than 2 300 000€, the number of employees exceed 50 per year.
  • Registered office in Luxemburg is required.

2.3. Limited Liability Company (SARL):

  • The minimum authorized capital – 12 500€, 100% of which must be paid in cash by the moment of incorporation. 
  • Shares – bearer shares are not allowed.
  • Director – at least 1, individual or legal person, no residency required. A nominee director may use. 
  • Members –1 - 40, individuals or legal persons, no residency required.  
  • Secretary – not required.  
  • Publicly available information: about directors and shareholders.
  • Company is obliged to keep and submit an annual financial report, an audited is not required.
  • Registered office in Luxemburg is required.
  •  Annual meetings of shareholders are not required if there are less than 25 shareholders in the company.

3. Taxes

Corporate tax depends on the amount of the profit:

20,8 % - less than 15 000€;

21,8 % - more than 15 000€.

Municipal tax – 6.75% in the capital, may be different in other cities.

VAT – 15% (3% and 6% for some goods).

Tax on dividends – 15% (two residents), 0% - on dividends paid to the parent company which owns at least 10% of shares during 1 year.

LLP is not subject to corporate tax and partners pay income tax.

4. Currency control

None

5. Agreements on avoidance of double taxation

Luxembourg concluded more than 50 agreements on avoidance of double taxation, including Ukraine (the Convention is signed but not ratified).

6. Features

Luxembourg is not in the tax havens list of Ukraine.