In Luxembourg, as a rule, any economic activity conducted on a regular basis is subject to prior establishment authorization. This comprehensive guide aims to provide you with essential information and step-by-step guidance on how to successfully apply for establishment authorization in Luxembourg, ensuring you meet all the necessary criteria and requirements.
I. Who requires Establishment Authorization/Luxembourg business permit
Establishment authorization is typically required for individuals wishing to engage in economic activities in Luxembourg, either as independent entrepreneurs or in partnership with others. The main categories of activities that require such authorization include:
- Commercial Activities: This includes businesses involved in commerce, Horeca (hotel, restaurant, café), transportation, industry, and more.
- Craftsmanship: Activities related to food, fashion, construction, mechanics, audiovisual, entertainment, arts, and more.
- Certain Liberal Professions: Professions with a significant intellectual component may also require establishment authorization.
II. Persons Concerned
To obtain establishment authorization, applicants must fulfill certain legal conditions, including:
- Professional Integrity: Demonstrating professional integrity is essential.
- Qualifications (if required): In some cases, specific qualifications are necessary.
The applicant must either be the owner of the business (for sole proprietorships) or the authorized representative of the business registered with the Chamber of Commerce and Companies (for companies).
III. Special Cases
There are exceptions and special cases:
- Independent Commercial Agents: They require establishment authorization as traders. However, salaried representatives are exempt but must operate under their employer’s establishment authorization.
- Certain Liberal Professions: Professions like lawyers, doctors, dentists, veterinarians, and business auditors have their regulations separate from establishment rights.
- Intellectual Service Providers: Those whose activities aren’t covered under liberal professions need establishment authorization for commercial activities.
- Non-Professional Sellers: Individuals selling their own creations or items not acquired for commercial purposes are exempt but may need authorization if participating in fairs, markets, or selling online.
- Community Companies: Companies providing occasional and temporary services in Luxembourg aren’t subject to establishment authorization but must notify the Directorate of Middle Classes.
- Third-Country Nationals: Non-European Union citizens seeking self-employment in Luxembourg should include their establishment authorization application with their residence permit request.
- Journalism and Educational Entrepreneurial Projects: Certain activities, like non-self-published journalism and educational entrepreneurial projects with annual turnover below €35,000, don’t require establishment authorization.
IV. Prerequisites for Establishment Authorization
Applicants must meet the following conditions:
- Professional Integrity: Demonstrating professional integrity is essential.
- Professional Qualifications: Matching the specific requirements for liberal professions or, for artisans, not being on List C.
- Establishment in Luxembourg: Authorization is granted only if there’s suitable physical infrastructure in Luxembourg for the activity’s nature and size.
- Effective and Continuous Management: The authorization holder must manage the business’s daily operations on-site, maintaining a genuine connection with the enterprise (either as an owner or authorized representative).
- Tax and Social Obligations: The business’s director should have fulfilled all past and current social and fiscal obligations, including withholding taxes.
- Registration of Statutes: The final establishment authorization requires the registration of statutes in the Register of Commerce and Companies (RCS).
The administrative fees for obtaining establishment authorization amount to €50. You can provide proof of payment by:
- Purchasing a €50 fiscal stamp from the Administration de l’enregistrement, des domaines et de la TVA (AED).
- Making a €50 bank transfer to account LU76 0019 5955 4404 7000, BIC code BCEELULL at the Diekirch office – recette, with the reference “autorisation de commerce.”
VI. Practical Procedures
A. Submission of Application
Damalion can submit your establishment authorization applications on your behalf in two ways:
- Online Application: Filling out the application online via MyGuichet.lu is highly recommended. The system will indicate the required documents based on your input.
- Postal Application: Sending a paper application by mail to the Directorate of Middle Classes is also possible.
B. Documents Required
The specific documents required for your application depend on the type of activity:
- For commercial activities, refer to the list here.
- For craftsmanship and liberal professions, check the list here.
VII. Administrative Response Time
In general, your application will be processed within three months of receiving a complete application. If you don’t receive a response within this period, it’s considered tacit approval.
In case of a negative decision on your establishment authorization application, you have recourse options, including gracious recourse and legal recourse, within the legal timeframes. You can also approach the Ombudsman for assistance.
IX. Authorization Issuance
If establishment authorization is granted, you will receive notification at the address provided on your application:
- Sole proprietors can collect their authorization at the Common Social Security Centre, where they can also complete their registration as self-employed.
- Companies (legal entities) will receive their establishment authorization by mail at their registered office.
The establishment authorization is issued in the form of a card that must be kept at the business premises and presented upon request. The authorization number should be displayed on all correspondence, emails, websites, quotations, invoices, storefronts, and construction site signs.
X. Authorization Duration
The authorization can lose validity due to:
- Failure to report a change in the director’s usual residence within one month.
- Non-use for over two years from the date of issuance.
- Voluntary cessation of the activity for over two years.
- Judicial liquidation or bankruptcy of the business.
- Loss of professional integrity.
- Failure to present the travel guarantee for package travel and linked travel services.
XI. Modification of Existing Authorization
Holders of existing establishment authorization must request a new authorization in case of:
- Changes or extensions to the business scope.
- Change of the executive manager on whom professional qualifications and integrity rely.
XII. Mandatory Notifications
Notifications can be submitted via mail or email. The following must be notified to the Directorate of Middle Classes within one month:
- Guarantee for package travel and linked travel services.
- Establishment of any branch.
- Change of business location.
- Creation or closure of any point of sale.
- Change in the director’s usual residence.
XIII. Professional Obligations
Throughout their existence, businesses must adhere to the requirements for obtaining establishment authorization and comply with all laws and regulations concerning business management.
By following these steps and meeting the necessary requirements, Damalion can help you successfully obtain establishment authorization in Luxembourg and embark on your entrepreneurial journey with confidence. For further assistance and guidance, please contact your Damalion expert now.