General information
Located in western Europe, between France and Germany, Luxembourg has a population of approximately 486,006 The official language is Luxembourgish, whilst French and German are both administrative languages. The currency used is the Euro and the legal system used is based on civil law system; accepts compulsory ICJ jurisdiction. Luxembourg is a constitutional monarchy with a Prime Minister and an elected Chamber of Deputies.
Types of company
The most popular type of company for overseas investments is the 1990 Soparfi Company, which is one of the leading holding companies in Europe. This type of company can also carry out commercial, financial or industrial activities but needs a trading authorisation from the Luxembourg Ministère des Classes Moyennes.
Company names
The company name must end in Société Anonyme, SA or AG. No company can be incorporated with a name that is identical to, or closely resembles the name of a company already in existence. Furthermore, names such as bank, building society, savings, insurance, assurance, reinsurance, fund management investment fund, council, municipal, co-operative, in French, German or any other foreign language equivalent will require approval and/or licensing.
Restriction on activities
Licensing is required for business activities related to banking, insurance, and investments. Furthermore, the Soparfi is normally set up as a holding company. If it is to act as a trading company then authorisation is required.
Approval of names & time required to incorporate a company
Subject to certain criteria, a company can be incorporated in a few days.
Share capital
The standard authorised share capital is Euro 31,000. This must be issued and fully paid up. The share capital may be divided into different classes and can be denominated in any recognised hard currency. Bearer shares are allowed.
Company officers
Shareholders: minimum of 2.
Directors: minimum of 3 which can be physical persons or corporate entities. The directors can be of any nationality, but for reasons of substance, it is advisable for the majority to be resident in Luxembourg.
Company Secretary: This is optional and can be a physical person or corporate entity.
Registered Office & Registered Agent
A registered office must be maintained within Luxembourg.
Corporate records & public filings
Companies must keep registers of the company officers (shareholders, directors, company secretaries) and the registered offices at the registered office. The disclosure of the beneficial owner(s) is not required. Companies are required to produce audited annual financial statements which need to be filed and are publicly accessible.
Corporate taxation
Companies are subject to:
- Capital Registration Duty of 1% on incorporation and subsequent increases of capital.
- Domestic tax payers are liable to tax on their worldwide income. Non-resident taxpayers are liable to tax on the income of their Luxembourg permanent establishment.
- Net worth tax on gross assets (minus liabilities). This can be offset against the Corporate Income Tax liability.
- Dividends received from a foreign subsidiary, in which the Soparfi has at least a 10% shareholding, which has been held for at least 12 months are excluded from taxable profit.
- Capital gains derived by a Soparfi from the sale of shares in other companies is excluded from taxable profit, subject to the two conditions in the previous point.
- Luxembourg has transposed into its legislation the EU Parent Subsidiary Directive.
Outline Map: Source: http://www.worldatlas.com
Jurisdictions