Foreign investors choose to open a private limited liability company (SARL) in Luxembourg due to its simple and straightforward set up process. Additionally, the inherent characteristics of a private limited liability company (SARL) complement the different types of business activities that international investors typically establish in Luxembourg.
Here are a few advantages of setting up a Private Limited Liability Company in Luxembourg:
- A private limited liability company (SARL) can be formed by legal or natural persons.
- There are only a few steps that investors need to take to incorporate and register the company, ensuring adherence to all commercial and business operation requirements in the country.
- It can be registered under the name of a single natural person who will assume full control of the investment vehicle.
- As the ownership structure of a Private Limited Liability Company is simple and straightforward, all formalities associated with its formation is minimal and easy to accomplish.
- The articles of association of a Private Limited Liability Company (SARL) does not have to contain the name of its stockholders.
- About 75% of companies are incorporated as Private Limited Liability Companies (SARLs), making it a popular form of company ownership in the dukedom.
- A Private Limited Liability Company (SARL) successfully combines the inherent properties of a public limited company (SA) and partnership structure. It borrows beneficial qualities from both these legal forms.
- A Private Limited Liability Company can be established for business purposes, with exceptions in the banking, insurance, and investment sectors.
Private Limited Liability Company (SARL) Company Name
- The name of a private limited liability company must end in GmbH or SARL.
- The name has to receive approval from the Luxembourg Company Register.
- When choosing a company name, you must first check the availability of the chosen name from the Company Register.
- The company must bear a different name from the name of other companies incorporated in Luxembourg.
- After two to three days of placing a request for your company name with the Company Register, you will be notified if the name you have chosen is available.
Change in Company Structure
- A Private Limited Liability Company (SARL) can transform into another company structure in the future.
- In case the number of stockholders exceeds 100, the company will be required to change its ownership structure.
- Merger and acquisition rules are applicable to all Private Limited Liability Company (SARL) incorporated in Luxembourg.
Private Limited Liability Company (SARL) By-Laws
- The founders of a Private Limited Liability Company (SARL) must create its by-laws and file them before a notary public for approval.
- In the case a company’s by-laws are drafted in English, it must be translated in Luxembourgish, French, and German languages as well.
Liabilities of Private Limited Liability Company (SARL) Company Owners
- The liabilities of the founders and/or stockholders of a Private Limited Liability Company (SARL) will be limited to the amount of their contributions to its share capital.
Private Limited Liability Company (SARL) Lifespan
- A Private Limited Liability Company (SARL) can remain in operations for an unlimited period, or the term specified in the company by-laws.
- Death, bankruptcy, or non-ability of a Private Limited Liability Company (SARL) company founders does not automatically translate to liquidation or closure.
Company Co-Founders in a Private Limited Liability Company (SARL)
- Having at least one company founder is allowed.
- In the case of one found for a Private Limited Liability Company (SARL), the company will be under his or her full control.
- The maximum number of stockholders allowed in a Private Limited Liability Company (SARL) structure is 100.
- Natural persons and legal entities can assume the role of a Private Limited Liability Company (SARL) founder.
- In the case of two or more founders, one can act as its director, or the director can hire personnel to assume the role of director.
Private Limited Liability Company (SARL) Share Capital
- A Luxembourg Private Limited Liability Company (SARL) must have a share capital of at least EUR 12,000.
- The share capital must be paid in full before company registration.
- The share capital deposited in a bank will be blocked for use until the company succeeds in its registration.
- A Private Limited Liability Company (SARL) founder must submit the bank statement certifying share capital has been paid and recognized by a notary public.
- Opening a Luxembourg bank account where the share capital must be deposited takes up a large portion of the time in setting up a company in the Grand Duchy.
- A Luxembourg bank will conduct its own KYC (Know your Client) and due diligence procedures before a bank account can be opened for a company planning to set up in Luxembourg. The process of opening a bank account in Luxembourg usually takes one to two weeks.
- Company share capital may be deposited in any currency with the converted amount equal to at least EUR 12,000.
Private Limited Liability Company (SARL) Management
- A Private Limited Liability Company (SARL) by-laws can enumerate the number of managers they will have and define the scopes of their roles, responsibilities, and authority.
- The company by-laws can indicate if the founders can assume the role of manager/s or if a dedicated personnel will be hired to act as the company manager.
- Rules regarding the assumption of the manager role are not required to be included in the by-laws, as this can be addressed during a Private Limited Liability Company (SARL) annual general meeting.
- Foreign and local natural persons can assume the role of company director.
- In the case that the director of a Private Limited Liability Company (SARL) is a corporate entity, it can be domiciled in other countries.
- Company managers will assume the role of company agent.
- The Private Limited Liability Company (SARL) will be responsible for all the actions performed by its managers on its behalf, including all actions that fall outside their scope of authority.
In a Private Limited Liability Company (SARL) structure, the following professionals cannot assume the role of director/s:
- Luxembourg government employee
- Notary public
- Military personnel
- Attorneys
- Judges
- State officials
Private Limited Liability Company (SARL) Registered Legal Address
A Private Limited Liability Company (SARL) in Luxembourg must have its own legal registered address in the country. This information must be filed before the Luxembourg Trades and Companies Register.
Obtaining Licenses in Luxembourg
- A Private Limited Liability Company (SARL) that plans to engage in commercial activities in Luxembourg must obtain a business permit.
- A business permit will be issued not to the Private Limited Liability Company (SARL) itself but the employees working for it, as well as individuals who hold ownership shares.
- Business permit application must be filed within three days since the date of a Private Limited Liability Company (SARL) date of registration.
Timeframe of Private Limited Liability Company (SARL) Registration
- Setting up a Private Limited Liability Company (SARL) in Luxembourg usually takes seven days. However, this period can be extended, since you must open a corporate bank account, where the share capital will be deposited.
- Due diligence and KYC procedures will be involved in the bank account set-up process; hence the time of company incorporation can take between one to three weeks.
Private Limited Liability Company (SARL) Set-Up Costs
- Share capital- EUR 12,500
- Notary fees
- Company registration document publication fee
- Other state duties
SARL Tax Treatment
- A Private Limited Liability Company (SARL) in Luxembourg will be assessed of 29.22% corporate tax per year.
- Corporate profit tax assessed on profits over EUR 15,000 is 21% annually.
- If the profit is below EUR 15,000, the tax is set at 20%.
- Minimal profit tax for resident private companies is assessed at EUR 3,210 plus 7% solidarity tax.
- Municipal business tax rate of 6.75% for all resident companies in Luxembourg, including Private Limited Liability Company (SARL).
- Withholding tax on dividends are levied at 15% for Private Limited Liability Company (SARL) in Luxembourg.
- Royalties, interests, and earnings from company liquidation are not assessed with withholding tax.
- A Private Limited Liability Company (SARL) in Luxembourg with an office in the country and managed from there will be assessed with property tax on all properties that it owns, within and outside of Luxembourg.
- A Private Limited Liability Company (SARL) will only be taxable on property that it owns in Luxembourg at a rate of 0.5%.
Private Limited Liability Company (SARL) Accounting Records
- A Luxembourg Private Limited Liability Company (SARL) is deemed to keep its accounting records.
- Annual report must be submitted to the Company Register, including profit and loss statement, balance sheet, and other pertinent accounting and financial documents.
- The financial information of a Private Limited Liability Company (SARL) will be published in Luxembourg.
- A Private Limited Liability Company (SARL) annual report must be created during the company’s annual general meeting and must be verified by the company owners.
- During the annual general meeting, the accuracy of the annual report must be confirmed; hence it must be reported no later than six months after the end of the previous fiscal year.
- A Private Limited Liability Company (SARL) must obtain the services of a qualified auditor to perform an audit before submission to the concerned authorities.
- An audited annual financial report must be submitted, however, no audit is required if two of the three criteria enumerated below are satisfied by a company by the end of the fiscal year:
– Total company assets of up to EUR 3.125 million
– Net company turnover of up to EUR 6,25 million
– Total number of full-time employees up to 25 people.
For foreign investors looking at the Private Limited Liability Company (SARL) as their structure of choice in Luxembourg, Damalion can help you in the entire SARL company formation process. With an extensive global service network consisting of professionals, including lawyers, accountants, and other service providers, you can rest assured to experience a smooth and hassle-free company formation process. We also have a reliable team of Damalion experts that can help in other aspects of company operations, including opening a bank account, accounting, as well as answer questions pertaining to taxation, company structure change, and many more. To learn more, reach out to a Damalion expert today.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Create your SARL in Luxembourg — capital, notary, business permit, RCS/RBE filings, taxes, audit thresholds, banking, and timelines (2025).
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Last updated:What is a SARL in Luxembourg?
The Société à responsabilité limitée (SARL) is Luxembourg’s standard private limited company. It suits small to mid-size ventures, family businesses and SPVs. Liability is limited to contributions. One to 100 shareholders are allowed. Minimum share capital is EUR 12,000, fully paid at incorporation.
Plain steps: choose the name, draft articles with a notary, deposit capital, sign the deed, register with RCS, publish, file RBE data, apply for a business permit when required, open the operating bank account.
Key documents and data
- Shareholder and manager IDs, proof of address.
- Company name, registered office, purpose, capital and share structure.
- Draft articles for the notary; bank capital deposit certificate.
- RCS filing data; RBE beneficial owner information.
- For activities needing a business permit: qualifications, good repute, premises proof.
- Tax and VAT registrations; UBO chart where relevant.
Capital and banking
| Topic | SARL |
|---|---|
| Minimum capital | EUR 12,000 (cash or in-kind, fully paid at incorporation) |
| Capital deposit | Open a temporary account in the company’s name; bank issues a certificate for the notary |
| After registration | Convert the capital account into the operating account; set user rights and limits |
Business permit
Commercial, craft and certain liberal activities require a business permit from the Ministry of the Economy. Show professional integrity, qualifications and a real establishment in Luxembourg. Non-EU managers may also need immigration formalities.
RCS and RBE filings
- RCS: register the company and publish articles and changes.
- RBE: file beneficial owner data within one month and keep it up to date.
- 2025: LNIN (Luxembourg National ID number) is required in filings for relevant individuals; after 1 Oct 2025, filings may be blocked if missing.
- Late filing fees apply from 24 Mar 2025 for out-of-time RCS/RBE updates.
- Access rules to the RBE changed on 1 Feb 2025; obligations to maintain accurate data continue.
Tax and accounting
- Corporate tax (Luxembourg City): combined rate approx. 23.87% (CIT 16% + 7% surcharge on CIT + MBT ~6.75%).
- VAT: registration mandatory above EUR 35,000 annual taxable turnover (standard threshold).
- Accounting size thresholds (from FYs starting 1 Jan 2023, in force): small company ≤ EUR 7.5m balance sheet and ≤ EUR 15m turnover (and ≤ 50 employees) for two of three criteria.
- Audit: statutory audit if size criteria are exceeded; sector rules may impose audits regardless of size.
Typical timing and costs
- Timing: once capital is ready and documents are complete, incorporation can be done quickly; opening the operating account and permit processing can extend the timeline.
- Costs: notary, publication, registry fees, possible permit fees, and professional support.
Frequently asked questions
1) What is the minimum capital for a SARL and must it be fully paid?
The minimum is EUR 12,000. It must be fully subscribed and fully paid at incorporation. Contributions can be cash or in kind, with in-kind valued in the articles.
2) How many shareholders are allowed and can there be a single member?
Between 1 and 100 shareholders. A single-member SARL is lawful; its rules are governed by the Companies Law.
3) Is a notary mandatory?
Yes. The SARL deed is executed before a Luxembourg notary. The notary checks legality, capital deposit proof and identification documents.
4) When is a business permit required?
For commercial, craft and certain liberal professions. The manager must meet integrity and qualification criteria and ensure a real establishment in Luxembourg.
5) What goes into the notarial deed?
Company name, purpose, duration, registered office, capital, share structure, manager powers and rules for meetings and transfers.
6) What are the steps after signing?
File with the RCS, publish the deed, file beneficial owner data with the RBE within one month, arrange tax/VAT registrations, and convert the capital account to an operating account.
7) Are there 2025 changes to RCS/RBE practice?
Yes. Since 1 Feb 2025, access rules to the RBE changed and accuracy duties were reinforced. LNIN must be provided in RCS filings for relevant individuals; after 1 Oct 2025, filings may be refused if LNIN data is missing. Late declarations attract new fees from 24 Mar 2025.
8) What are the 2025 corporate tax rates?
For Luxembourg City, the combined effective rate is about 23.87% (CIT 16% plus 7% surcharge on CIT, plus municipal business tax around 6.75%). Other communes have different MBT rates.
9) When is VAT registration required?
When annual taxable turnover exceeds EUR 35,000. Earlier registration may be needed depending on the activity.
10) What are the current accounting size thresholds?
Small companies do not exceed two of: balance sheet EUR 7.5m; net turnover EUR 15m; average 50 employees. These thresholds apply for financial years starting 1 Jan 2023.
11) When is a statutory audit required?
When the company exceeds size thresholds for two consecutive years or is subject to sector rules. Some large holding companies have mandatory audit requirements regardless of size.
12) How are managers appointed and what are their duties?
Managers are appointed in the articles or by shareholder resolution. They must act lawfully in the company’s interest, keep records, file accounts and comply with tax and registry obligations.
13) Are there restrictions on share transfers?
Transfers to non-shareholders usually require approval by shareholders representing at least 75% of the capital, unless the articles provide otherwise.
14) What must be filed with the RBE and when?
Direct or indirect beneficial owners (natural persons) with required identifiers and control details. File within one month of the event and keep information up to date; administrative fines apply for failures.
15) Does a SARL need a registered office in Luxembourg?
Yes. The registered office must be in Luxembourg and be capable of receiving official correspondence and inspections where applicable.
16) Can capital be contributed in kind?
Yes, subject to valuation in the articles. The notary verifies documentation. Conditions in the Companies Law apply.
17) How fast can the operating bank account be opened?
After registration and KYC completion. Timing depends on the bank, activity, countries and payment pattern. Prepare a clear business profile to reduce questions.
18) What publications are required?
The incorporation deed and later changes must be published via the RCS/LBR platform. Annual accounts are filed and published according to size rules.
19) What happens if filings are late?
Late RCS/RBE filings can trigger increased fees (from March 2025) and, in serious cases, enforcement measures. Ensure updates within legal deadlines.
20) Do non-EU managers need immigration formalities?
Yes, separate residence/work authorisations may be required in addition to the business permit. Timing should be planned to align with incorporation.
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