Doing business

Luxembourg

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Private Limited Company EUA 12,500 totaly subscribed	Minimum 2 partners Maximum 40 partners. NB: 1 member for a sole proprietorship. Liability is limited to the amount contributed.
Public Limited Company EUR 31,000 with 1/4 released at the creation.	Minimum 2 shareholders. Liability is limited to the amount contributed.
General Partnership. No minimum capital.	Minimum 2 partners. Partners' liability is joint and several on obligations and debts of the company.
Limited Partnership. No minimum capital.	Minimum 2 partners. Two types of partners: active partners and sleeping partners. Active partners' liability is joint and several. Liability of sleeping partners is limited to the amount contributed.
Cooperative Company No minimum capital	Minimum 7 partners Partners' liability is joint and several or divided, unlimited or limited to amount contributed depending on the status.

Business setup procedures

Setting up a company	Luxembourg	OECD
Procedures (number)	6.0	5.6
Time (days)	19.0	13.8

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Luxembourg.
Trade Register, in French.
The competent organization: The Trade and Companies Registry.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	9,288	30,196	20,350
FDI stock (millions USD)	85,352.9	101,517.9	114,691.4
Performance Index*, ranking on 141 economies	7	1	-
Potential Index**, ranking on 141 economies	6	-	-
Number of Greenfield investments***	17	13	-
FDI inwards (in % of GFCF****)	83.4	12.2	-
FDI stock (in % of GDP)	148.1	214.7	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Luxembourg

Strong points: Incoming foreign investment is made easy by the policy established by the authorities. In effect, Luxembourg is one of the most open economies in the world, and has a very attractive taxation system. Luxembourg is also one of the biggest financial centers of the European Union (155 banking establishments). There are minimal exchange controls and foreign capital circulates freely. Additionally, communication networks are extremely developed and connect the country to the main foreign cities and capitals (highways, plane and train), and the labor force is highly qualified.
Weak points: The main hindrance to investment in Luxembourg is in the high cost of living and high level of consumer demands.
Government measures to motivate or restrict FDI: The government took a number of measures to attract business establishment:
- Subsidies granted to SMEs (retail, restauration or hotels) through the National Society of Investment Credit (SNCI);
- Up to 25% exemptions from Corporate Income Tax and Commercial Tax, for 8 years, for start-ups.

Procedures relative to foreign investment

Freedom of establishment: Yes
Acquisition of holdings: A majority holding interest in the capital of a local company is legal in Luxembourg.
Obligation to declare: Whatever may be the form of investments chosen (momentary commercial association, Economic Interest Grouping - EIG, an independent agent's activity or a branch), access to an economic profit-making activity on the Luxembourg territory is subject to:
1) the same formalities (registration/enrollment at the Companies' Trade Register, application for a VTA number, initial declaration at the Direct Taxes Administration, etc.)
2) the same obligations (obtaining an establishment authorisation for commercial activities, crafts, industrial activities and liberal professions) as in the case of a creation of an entreprise in Luxembourg.
Competent organization for the declaration: Companies' and Trade Register
Direct Taxes Administration

Finding assistance for further information

Investment aid agency: Economic Development Agency (DELUX)
Other useful resources: Doing business in Luxembourg