Luxembourg (LU)
Luxembourg is a tiny but remarkably prosperous constitutional monarchy at the heart of Europe — a founding member of both the EU and NATO — celebrated as the world's most productive economy per capita, the EU's premier financial centre, and home to the highest minimum wage on the continent.
Capital: Luxembourg City
Region: Europe
Language: Luxembourgish
Currency: EUR (€)
Cost of living: Very expensive (index 90)
Emergency: 112
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Business Setup
Start a business or go freelance in Luxembourg.
🧑💻 Freelancer / Self-Employed Guide
Steps to register:
- 1 Obtain an autorisation d'établissement (business establishment permit) from the Ministère de l'Économie — this is MANDATORY before starting any self-employed activity in Luxembourg and is unique to Luxembourg vs. most EU countries. Apply via guichet.lu.
- 2 Register at the Registre de Commerce et des Sociétés (RCS — company register) at the Administration de l'Enregistrement, des Domaines et de la TVA (AED).
- 3 Register with the SECU (Centre Commun de la Sécurité Sociale) as a travailleur indépendant for social security contributions.
- 4 Register with the ACD (Administration des Contributions Directes) for income tax.
- 5 If annual turnover exceeds €30,000, register for TVA (VAT) with the AED.
- 6 Open a Luxembourg business bank account (recommended — not legally required for sole traders).
- 7 Set up your accounting (comptabilité) — use accounting software or a fiduciaire (accountant). Full bookkeeping is required.
- 8 If you will work for EU institutions or major employers, register with CCSS for your exact contribution class.
Tax registration
Self-employed persons (travailleurs indépendants) pay income tax at standard progressive personal rates (8%–42%). Tax is paid as advance payments (avances) quarterly based on estimated income. File annual declaration d'impôts with the ACD by 31 March for the previous year. Social contributions are paid to SECU based on your declared income.
VAT threshold
€30,000 annual turnover threshold for TVA (VAT) registration. Below this, you are exempt from charging TVA. Above this, you must register, charge 17% (or applicable reduced rate) TVA on your invoices, and file quarterly TVA returns. Many professionals prefer to register voluntarily even below the threshold to reclaim input TVA on purchases.
Invoicing
Luxembourg invoices must include: your name/company name and address, business registration number (RCS), TVA number if registered, date, sequential invoice number, description of services/goods, unit price, any applicable TVA rate and amount, total including TVA. For professional services, client name and address are required. Electronic invoices are legally valid in Luxembourg. Public sector clients require e-invoicing via government portal (chorus-pro equivalent).
Social security
Self-employed persons must register with SECU and pay social security contributions as travailleur indépendant. Contributions are calculated based on your declared income: pension (16% total — 8% employee + 8% "employer" both paid by self-employed), health (6.10%), long-term care (1.4%), plus accident insurance (AAA). The total is approximately 24–27% of income. Minimum contributions apply even if income is low. This is a significant cost for new freelancers — budget carefully.
💡 The mandatory autorisation d'établissement is a critical difference between Luxembourg and most other EU countries — you CANNOT legally start self-employed activity in Luxembourg without this permit from the Ministry of Economy. Regulated professions (doctors, lawyers, accountants) require additional professional authorisations. Many freelancers in Luxembourg use a fiduciaire (accounting and administrative services company) to manage their administration — the complexity of Luxembourg's system makes professional help worthwhile. The SARL-S (€1 minimum capital limited company) is increasingly popular as an alternative to sole trading as it limits personal liability while keeping setup costs low.
🏢 Business Structures
SARL · Société à Responsabilité Limitée
Private limited liability company
€12,000 minimum share capital (can be reduced to €1 under SARL-S variant for startups)
Min. capital
1–3 weeks for standard SARL. SARL-S: 5–7 business days with online process. Requires notarial act (acte notarié) for standard SARL.
Setup time
Liability: Limited — shareholders are not personally liable beyond their capital contribution.
Setup cost: €75 notary fee for standard deed + approximately €250–300 registration. Legal fees: €500–3,000. SARL-S (simplified variant): reduced fees.
Best for: Most small and medium businesses wanting limited liability. The most common business entity in Luxembourg for SMEs. Required for most trading and service activities.
SA · Société Anonyme
Public limited company
€30,000 minimum (25% must be paid up at incorporation)
Min. capital
2–4 weeks including preparation of articles of association.
Setup time
Liability: Limited — shareholders not personally liable beyond investment.
Setup cost: €150–300 registration fee. Legal/notary fees: €2,000–10,000+. Plus minimum capital.
Best for: Larger companies, holding companies, investment funds, and those requiring a public company structure. Luxembourg SAs are heavily used in international holding and finance structures — Luxembourg is one of the world's top holding company jurisdictions.
SARL-S · Société à Responsabilité Limitée — Simplifiée
Simplified private limited company
€1 minimum (but in practice should be sufficient to start operations)
Min. capital
5–7 business days with online registration at guichet.lu.
Setup time
Liability: Limited — same as SARL but with reduced capital requirement.
Setup cost: Reduced registration fees. No notary required — online process. Approximately €200–400 total.
Best for: Startups and entrepreneurs who want limited liability without the €12,000 capital requirement of a standard SARL. Created specifically to encourage entrepreneurship. Maximum 1–5 shareholders required to be natural persons.
Entreprise individuelle · Entreprise individuelle / Travailleur indépendant
Sole trader / Self-employed individual
None
Min. capital
2–4 weeks (must obtain autorisation d'établissement from Ministry of Economy before starting)
Setup time
Liability: Unlimited personal liability — the owner is personally responsible for all business debts.
Setup cost: Autorisation d'établissement fee: €24–100 depending on activity. Business registration: approximately €50–150.
Best for: Freelancers, consultants, artisans, and individuals testing a business. Simplest structure but exposes personal assets. Most common for tradespeople and professionals.
SCS / SNC · Société en Commandite Simple / Société en Nom Collectif
Limited partnership / General partnership
None
Min. capital
1–2 weeks.
Setup time
Liability: SNC: unlimited for all partners. SCS: unlimited for general partners, limited for limited (silent) partners.
Setup cost: Lower than SARL — no minimum capital. Notarial/legal fees: €500–2,000.
Best for: Professional partnerships (lawyers, architects, some consultants). Less used than SARL but favoured in some professional service sectors.
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