Luxembourg
Key entity, tax, banking, visa, and compliance guidance for foreign founders incorporating in Luxembourg.
Foreign Ownership Eligibility
Luxembourg welcomes 100% foreign-owned companies
Fully remote formation — you never need to set foot in the country.
- 100% foreign ownership permitted
- 1 manager/director minimum, no residency requirement
- Minimum capital: EUR 1 (SARL-S) / EUR 12,000 (S.à r.l.) / EUR 30,000 (S.A.)
- S.à r.l. recommended for standard SMEs
- SOPARFI structure for holding companies with participation exemption
Ownership
100% Foreign OK
Formation
100% Remote
Tax at a glance
Luxembourg Tax Overview
23.87%
Corporate Income Tax (CIT)
14%
CIT (< EUR 175K income)
Progressive
CIT (EUR 175K–200K)
0%
SOPARFI participation exemption
0%
Withholding tax (dividends)
0%
Withholding tax (interest)
5.76%
IP Box effective rate
82
Tax treaties
Pros & cons
Advantages & Considerations
Key Advantages
#1 investment fund domicile in Europe — EUR 5+ trillion AUM
82 tax treaties — favorable WHT rates and treaty access
SOPARFI participation exemption — 0% on qualifying dividends/capital gains
Political & economic stability — AAA credit rating, founding EU member
Central European location — strategic access to EU Single Market
Multilingual workforce — Luxembourgish, French, German, English widely spoken
Strong legal framework — civil law (French/German influence), clear corporate governance
IP Box regime — 5.76% effective tax rate on qualifying IP income
No thin capitalization rules — flexible debt-to-equity ratios (subject to ATAD limits)
EU passporting for financial services — access to entire EU market
Considerations
High costs — EUR 4K–5K formation, EUR 7K–12K+ annual compliance (vs Ireland/Cyprus)
Complex substance requirements — post-BEPS must demonstrate genuine economic presence
Small domestic market — population ~650K, limited local consumer base
Expensive labor costs — high salaries + ~30% employer social security contributions
BEPS & EU scrutiny — continuous review by OECD/EU Commission
Bank account delays — strict KYC can extend to 6–8 weeks for complex structures
Language barrier — some government services primarily in French/German/Luxembourgish
Limited real estate — office space in Luxembourg City expensive and competitive
High cost of living — among highest in Europe
Reputation risk — historically associated with tax optimization; increased transparency under DAC6, CRS, FATCA
Incorporation Process
The process is strictly digital. Each stage builds on the previous one.
Initial setup & KYC
Documentation
Share capital deposit
Notary execution
Formation completion
What you'll pay
Cost Architecture
Government Fees
Annual Ongoing
Professional Services
Total formation: EUR 4,150–4,450 (~USD 4,475–4,800). Add EUR 12,000 share capital deposit for S.à r.l.
Still unsure about costs?
These are estimates — your actual cost depends on your structure
Every Luxembourg setup is different. A 15-minute call with one of our specialists will give you a personalised cost breakdown — completely free.
Fintech & Banking
Can non-residents open accounts without visiting? YES.
Banking options for non-resident founders in Luxembourg. Remote account opening availability varies by institution.
| Institution | Type | Ease for Non-Residents | Notes |
|---|---|---|---|
| 115 international banks from 25 countries. Key banks: BGL BNP Paribas | Traditional bank | Low (Visit Required) | 2–8 weeks (varies by bank, strict KYC for foreign-owned companies) • EUR 15–80/month • EUR 0–5,000 (varies by bank) • Articles of Association, RCS extract, beneficial ownership register, shareholder/director ID, proof of address, business plan, proof of income/wealth source • All major banks offer internet banking and mobile apps |
| Banque et Caisse d'Épargne de l'État | Traditional bank | Low (Visit Required) | 2–8 weeks (varies by bank, strict KYC for foreign-owned companies) • EUR 15–80/month • EUR 0–5,000 (varies by bank) • Articles of Association, RCS extract, beneficial ownership register, shareholder/director ID, proof of address, business plan, proof of income/wealth source • All major banks offer internet banking and mobile apps |
| ING Luxembourg | Traditional bank | Low (Visit Required) | 2–8 weeks (varies by bank, strict KYC for foreign-owned companies) • EUR 15–80/month • EUR 0–5,000 (varies by bank) • Articles of Association, RCS extract, beneficial ownership register, shareholder/director ID, proof of address, business plan, proof of income/wealth source • All major banks offer internet banking and mobile apps |
| Spuerkeess | Traditional bank | Low (Visit Required) | 2–8 weeks (varies by bank, strict KYC for foreign-owned companies) • EUR 15–80/month • EUR 0–5,000 (varies by bank) • Articles of Association, RCS extract, beneficial ownership register, shareholder/director ID, proof of address, business plan, proof of income/wealth source • All major banks offer internet banking and mobile apps |
| Revolut Business | Fintech | High (Remote) | 2–8 weeks (varies by bank, strict KYC for foreign-owned companies) • EUR 15–80/month • EUR 0–5,000 (varies by bank) • Articles of Association, RCS extract, beneficial ownership register, shareholder/director ID, proof of address, business plan, proof of income/wealth source • All major banks offer internet banking and mobile apps |
| Wise Business | Fintech | High (Remote) | 2–8 weeks (varies by bank, strict KYC for foreign-owned companies) • EUR 15–80/month • EUR 0–5,000 (varies by bank) • Articles of Association, RCS extract, beneficial ownership register, shareholder/director ID, proof of address, business plan, proof of income/wealth source • All major banks offer internet banking and mobile apps |
Regulatory requirements
Annual Compliance Matrix
| Requirement | Deadline | Details |
|---|---|---|
Annual financial statements | Ongoing | File within 7 months of fiscal year-end. |
Corporate tax return | Ongoing | File within 5 months of fiscal year-end (extensions available). |
VAT returns | Ongoing | Quarterly or monthly depending on turnover. |
Registered office (mandatory) | Ongoing | EUR 2,500/year for virtual office + mail handling. |
Nominee Director Service (optional) | Ongoing | EUR 6,000+/year for professional director + corporate governance. |
Annual accounting services | Ongoing | EUR 4,850+/year (balance sheet, P&L, tax returns, filing). |
Statutory audit | Ongoing | Required if thresholds met or for S.A. |
Total annual compliance cost | Ongoing | EUR 7,350–12,000/year for basic compliance (depends on company size and complexity). |
Frequently Asked
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