Start your SARL corporation in Luxembourg

Choosing Société à Responsabilité Limitée (SARL) in Luxembourg 

A Luxembourg Société à Responsabilité Limitée (SARL or limited liability company), is a unique type of corporate structure that has become most prominent in Luxembourg. 

A Luxembourg SARL combines the main features of a corporation and a private partnership. Its shareholders’ liability is limited to the amount of capital that they contribute. At the same time, SARLs have some of the main characteristics of a partnership such as non-transferability of shares, incredible simplicity, and increased flexibility.

A Luxembourg SARL usually has between 2 and 100 shareholders, but a single shareholder can incorporate and solely run a SARL. 

The general functioning of a SARL is defined by the articles of association, and its minimum share capital must be €12,000. 

The manager of a Luxembourg SARL can be a legal person and can be of foreign nationality. A SARL of over 60 partners is subject to the necessary control of an auditor.  It is recommended to choose an independent director to facilitate bank account opening in Luxembourg. Your lawyer or your chartered accountant should not be your local director as new directive ATAD3 fights against shell companies.

The Simplified SARL (SARL-S) in Luxembourg 

The Simplified SARL (SARL-S) is a simplified limited liability company that is registered under different rules and legislation correlated to a traditional SARL. A SARL-S is directed to specific investors and entrepreneurs, and the minimum share capital is set at EUR 1. Natural persons can easily establish a SARL-S in Luxembourg and can instantly start their business projects for which they do not need to invest a huge sum of money. 

The advantages of a SARL in Luxembourg

A SARL in Luxemburg will have to following advantages: 

• The owners’ liabilities are limited to the amount of capital that they have contributed to the company’s formation. 
• The structure of a SARL has the same degree of simplicity as a private partnership, with few administrative requirements compared to a corporation. 
• The formalities associated with the company formation are minimal. 
• Although SARLs are subject to auditing and are expected to submit financial reports, there is still a good degree of privacy at the outset. 
• Luxembourg has a territorial tax system whereby foreign-owned companies are only taxed on income that is sourced in Luxembourg.

Creating a SARL in Luxembourg

Before incorporating a SARL in Luxembourg the minimum share capital must be deposited in a corporate bank account in Luxembourg. 

Next, the process of incorporating a SARL requires the “Articles of Association” to be prepared and filed with the Trade and Companies Register (registre de commerce et des sociétés), and must contain the following information: 

• The name of the company. 
• The local registered address of the company’s head office. 
• The total issued share capital. 
• The objective of the company and its expected lifetime. 
• The identities and personal details of the company’s shareholders, as well as the number of shares they hold. 

After this, all other required documents such as the incorporation deed, and memorandum of association would be filed with the Luxembourg Registrar of Companies (Registrar of Companies and Commerce). This has to take place within one month. 

Details of the incorporation would then be published in the Official Gazette. This gazette is an electronic gazette which is known as the Recueil Electronique des Sociétés et Association (Electronic Collection of Companies and Associations). After this step, the company will officially exist.

Are you looking to set up your business or investment platforms in Luxembourg? Let’s go ahead and contact your Damalion experts now and let us help. 

Start your SARL corporation in Luxembourg — legal forms (SARL & SARL-S), capital & shares, directors & UBO, timelines, remote setup, bank-ready file, and a clear path from name check to activation.

For entrepreneurs, holding companies, SPVs, family offices and international groups • Damalion facilitates scoping, document preparation and provider coordination (notary, RCSL, bank, VAT). Approvals remain at each institution’s discretion.

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Why Luxembourg SARL?

Flexible governance, EU passport, predictable tax framework, strong banking, and recognized vehicles for holdings and trading. We align your use case with the right form (SARL vs SARL-S), share structure, management, and compliance so filings and onboarding move faster.

Key features at a glance

Topic	SARL	SARL-S (simplified)
Share capital	Typically from EUR 12,000 (fully subscribed)	From EUR 1 to < EUR 12,000 with yearly allocation to reserves
Shareholders	1–100 natural or legal persons	1–100 natural persons (founders)
Management	One or more managers; flexible powers	One or more managers; similar structure
Transfer of shares	Restricted; approval typically required	Restricted; approval typically required
Formation	Notarial deed, RCSL registration	Notarial deed or private deed (as applicable), RCSL registration
Use cases	Holdings, trading, services, IP	Start-ups, micro & small enterprises

Documents you’ll prepare

• Founders’ IDs and recent proof of address; corporate founders add registration extract and UBO chart.
• Company name(s) and activity description (NACE where relevant).
• Registered office details (domiciliation where applicable).
• Articles/formation deed inputs: capital, share classes, management powers, auditor (if any).
• Tax & VAT profile (holding vs. trading), economic substance outline.
• Bank-ready file: source of funds for capital, expected payment flows, counterparties, countries.

Formation — step by step

1. Scoping & name check. Align legal form, capital and governance with your objectives.
2. Drafts & onboarding. Collect KYC/UBO, prepare deed inputs and domiciliation.
3. Execution. Notarial signing; deposit capital per bank/notary sequence.
4. Registration. RCSL filing, publication, tax/VAT registrations as needed.
5. Banking & go-live. IBAN issuance, user rights, first funding and supplier/client setup.

Costs and timelines

• Notary, RCSL, publication fees; domiciliation and accounting packages as applicable.
• Bank setup and monthly fees vary by provider and activity profile.
• Typical timing from complete file to activation: a few days to a few weeks, depending on profile and follow-ups.

Related reading

• Start your SARL corporation in Luxembourg
• More articles on company formation
• Swiss bank account guide (for capital deposit & multi-currency)

Frequently asked questions

What is the minimum share capital for a SARL?

A standard SARL requires at least EUR 12,000, fully subscribed and paid in.

What is the minimum share capital for a SARL-S?

A SARL-S can be formed from EUR 1 to less than EUR 12,000, subject to mandatory allocations to legal reserves.

How many shareholders are permitted?

A SARL allows 1–100 shareholders (natural or legal persons).

Are there legal restrictions on share transfers?

Yes. Transfers are restricted and typically require approval by shareholders representing at least 75% of the capital unless articles provide otherwise.

Is a notarial deed mandatory for incorporation?

Yes. SARL incorporation requires a notarial deed (SARL-S may allow simplified paths depending on the case).

Is RCSL registration compulsory?

Yes, every SARL must be registered with the Luxembourg Trade and Companies Register (RCSL) and published.

What accounting and filing obligations apply?

SARLs must maintain statutory accounts and file annual financial statements; size thresholds determine formats.

When is a statutory audit required?

An audit is required if legal thresholds for balance sheet total, net turnover, or average employees are exceeded.

How is a SARL taxed at entity level?

Generally subject to corporate income tax, municipal business tax, and net wealth tax, subject to exemptions where applicable.

Are dividends subject to withholding tax?

Dividends are typically subject to 15% withholding tax unless reduced or exempt under treaties or the EU Parent-Subsidiary regime.

How are capital gains realized by the company taxed?

Capital gains are taxed as ordinary income, subject to applicable exemptions or rollovers.

Is VAT registration required?

Trading/service SARLs generally require VAT registration; pure holding SARLs may be out of scope.

What are directors’ duties and liabilities?

Directors owe duties of care and loyalty and may be liable for mismanagement or non-compliance.

Are general meetings and minutes legally required?

Yes. Annual accounts approval and proper minute-keeping are required; frequency and form follow law and articles.

Are foreign shareholders and directors allowed?

Yes; there are no nationality restrictions by law. KYC/UBO and substance considerations still apply.

Can a SARL qualify for the participation exemption?

Yes, if statutory conditions on shareholding, holding period, and nature of subsidiary are met.

Can a SARL rely on Luxembourg’s tax treaties?

Yes, subject to residence, beneficial ownership, and anti-abuse rules.

How are liquidation distributions treated?

Liquidation proceeds are generally treated as capital gains (not dividends) at shareholder level per applicable rules.

What are penalties for non-compliance with filings?

Administrative fines and potential director liability can apply for late or missing filings.

Can a SARL convert into another legal form?

Yes. Conversions into SA or other forms are possible through prescribed legal procedures.