Private Limited Liability Company in Luxembourg
A Private Limited Liability Company (Société à responsabilité limitée – SARL) is one of the most common company types in Luxembourg.
A company, being a distinct legal entity, can gain, own, enjoy and alienate property in its own name. The shareholders aren’t the owners of the SARL’s property. The company itself is the true owner. In the company form of organization, it is possible for a company to make a valid and effective contract with any of its members. It is also possible for a person to be in control of a company and be in its employment. Thus, a person can at the same time be a shareholder, creditor, director and also an employee of the company. An SARL can be formed for any business purpose. However, insurance companies, savings companies and investment companies cannot be formed as Private Limited Liability Company.
Private Limited Liability Company incorporation procedure
Here is Private Limited Liability Company incorporation procedure divided into 3 main stages:
Stage 1: Bank account
The first step to register a SARL in Luxembourg is to open a corporate bank account where the share capital will be deposited.
Stage 2: Company name
The second step is to choose and reserve the company name, followed by preparation of the Articles of Association, which together with the shareholders and directors or managers’ details have to be filed with the RCS. Lawyers in Luxembourg or a public notary must prepare the incorporation documents.
Stage 3: Business license
The last steps of the company registration process comprise applying for the business license with the Ministry of Economy and filing with the tax authorities in Luxembourg.
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Private Limited Liability Company registration conditions
Private Limited Liability Company with more than 60 shareholders are subject to compulsory oversight by one or more internal auditors, whose names are specified in the articles of association. The auditors can or cannot be shareholders.
Any SARL company which, on the balance sheet closing date after two consecutive years of operation, exceeds the thresholds specified in two of the three criteria mentioned below, is legally obligated to have their accounts verified by a statutory auditor:
- balance sheet total: EUR 4.4 million;
- net turnover: EUR 8.8 million;
- average number of full-time employees: 50.
Share capital
Incorporating as an Private Limited Liability Company requires a minimum share capital of 12 000 Eur. The share capital has to be fully subscribed and paid up at the time of incorporation. An SARL can issue shares either with or without a nominal value. Contributions can be made in both cash and kind. Kind contributions must be valued in the articles of association.
Contributions “in industry”, such as services, do not form part of the share capital and don’t need to be valued separately by a statutory auditor. Industry contributions:
- entitle the contributor to non-transferable shares;
- entitle the contributor to share in the profits and net assets of the SARL entity, and obligates them to contribute to covering its capital losses.
Form of company shares
The shares in the capital are issued as registered shares, with or without a nominal value. An SARL may issue profit shares. The profit shares don’t form part of the company’s share capital. The rights attaching to the profit shares have to be specified in the articles of association. Bonds or public issues of shares are not permitted. Private bond issues are allowed, but demand the shareholders’ approval with convertible bonds.
Transfer of company shares
SARL shares are not freely negotiable. They may only be transferred inter vivos to non-shareholders with the permission of the general shareholders’ meeting representing at least 75% of the share capital. However, if provided for in the articles of association, the proportion of the share capital needed for approval can be lower (but not less than 50 %). Unless otherwise specified in the articles of association, the shares can be freely transferred between the shareholders. Share transfers must be recorded in a private deed or in a notarized deed.
Documents
An SARL must be set up in the presence of a notary.
The deed of incorporation must contain certain legally demanded information:
- the identity of the natural or legal person/s who signed the deed, or on whose behalf the deed was signed;
- name and the form of the company;
- the address of the company’s head office;
- the company/business purpose;
- the amount of subscribed share capital;
- the different classes of shares;
- details of contributions in kind;
- details of any other non-cash considerations at the time of company registration;
- the sum of securities or shares that do not form part of the share capital, and the rights attached thereto, if applicable;
- when not provided for by law, the obligations governing the operation, administration and oversight of the SARL company;
- the duration of the company;
- at least an approximation of the company’s costs.
The articles of association have to be filed in full with the Trade and Companies Register for publication.
Company name
An SARL must have a company name that is formed in its deed of incorporation. The name must differ from that of any other existing company. Availability of company name can be found in RCS.
Cost
Setting up an SARL involves certain costs, including:
- a share capital contribution of at minimum at EUR 12,000;
- notary fees;
- the address of the company’s head office;
- trade and Companies Register (RCS) publication cost;
- statutory auditor fees (if statutory audits are required);
- any costs relevant to the issuance of administrative permits.
Value Added Tax
VAT, based on the following norms:
- if its annual turnover excluding taxes is less than 112 000 Eur: VAT returns must be filed annually;
- if its annual turnover excluding taxes is between 112 000 Eur and 620 000 Eur: VAT returns must be filed quarterly;
- if its annual turnover excluding taxes exceeds 620 000 Eur: VAT returns must be filed monthly.
Timeline
The period of register LLC Company in Luxembourg engagement approximately 4 weeks. It is consisting of Engagement planning company incorporation, corporate bank account approval, corporate internet banking approval, engagement completion.
Consultation about Private Limited Liability Company registration
Our consultation services are specifically tailored to assist you in setting up a Private Limited Liability Company in Luxembourg, providing support with all aspects of the process. Our experienced advisors will help you with all the necessary paperwork, permits, and registrations, ensuring a streamlined and effective process. We offer personalized advice on legal obligations, share capital, and corporate structure to help you make well-informed decisions that are in line with your business objectives.
Ownership management
Managing the ownership of a Private Limited Liability Company can be challenging yet necessary. Our services involve dealing with ownership changes, overseeing beneficial owners, and managing transfers of ownership. We guarantee that all ownership revisions are accurately recorded and adhere to current regulations.
Corporate structure changes
As your company grows, your corporate organization may also need to evolve. If you need to alter directors, revise nominee details, or make other structural modifications, we offer thorough services to help you navigate these changes seamlessly and effectively.
Share capital management
Managing the share capital of your company is essential for its financial well-being. Our services can assist you in enhancing, decreasing, selling, and transferring share capital, guaranteeing that all activities are conducted accurately and in compliance with legal regulations.
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