In the year of 2006, the country had the highest nominal GDP per
capita of 85.444 U.S. dollars, which could be compared with Sweden 41,945 and Germany 35.022 during the same year.
The economy is partly based on a strong export-oriented industry, dominated by the steel sector, but mainly a service sector where international banking and trading activities is important. The country's liberal finance laws have become a center for international financial transactions, a significant portion of European credit operations is conducted from the country.
Company Forms
Société anonyme (SA) Limited liability company. Minimum share capital is 30 986,69 Euros. It requires a minimum of two partners. Since 2006, it is possible to form companies and sole members with less restrictive rules of administration. No personal responsibility. Company byelaws are required.
Société à responsabilité limitée (SARL) Minimum share capital is 12 394,68 Euros. The number of partners can vary between 2-40. No personal responsibility. Company byelaws are required. Private ownership may also have one owner, SARL unipersonelle.
Société en nom collectif (Sense) Partnerships. At least two partners with personal and jointly liability.
Société en commandite simple (SECS) Limited partnership. Assumes at least one general partner - who has personal responsibility - and at least one partner who is responsible only for their capital contribution. You can also subscribe to a limited partnership with shares, "Société en commandite par actions" (SECA).
Enterprise individuelle Sole firm that requires personal responsibility.
Registration and fees Smaller companies are required a permit for doing authorized business by the Ministry of Small Business. For industrial enterprises, it requires a permit from the Ministry of Economic Affairs.
- The company shall within one month be registered in the Commercial Register of the District Courts in Luxembourg and Diekirch.
- For the formation of business types (SA, SARL, ...) the companies must have corporate statutes approved by a notary.
- Company registration takes place at the Administration de l'Enregistrement et des Domaines.
The registration is confirmed by publication in the "Mémorial C" (The official journal of the Grand Duchy - companies and associations) which is a legal newspaper.
All traders must also be registered at the tax agencies, Administration des Contributions Director and Administration de l'Enregistrement et des Domaines.
Average time and cost for registration of: - Public limited company (SA): 3 days, about 2500 Euros.
- Private limited company (SARL): 3 days, about 2,000 Euros
- Partnerships (SENC): 3 days, about 2,000 Euros
- Sole proprietorship (Enterprise individuelle): 2-5 days, about 500 Euros
The total cost will vary depending on the company and share capital.
VAT Registration Takes place at the Administration de l'Enregistrement et des Domaines. Normal VAT rate: 15 percent. Reduced rate: 3-6 percent (food, water, pharmaceuticals, passenger transport, books, magazines, agriculture, shelter, sports, social services and medical and dental care.) You can also get reduced rates of 3 percent within the construction sector, "TVA - lodgement ".
Employer feeEmployer's tax is approximately 13 percent which includes pension and health insurance. The employee pays about 12 percent, the total fee amounts to 25 percent.
Business taxThe corporate tax is 20 percent for incomes up to 9 915,74 Euros for incomes over 9 915,75 up to 14 873.64 Euros the tax is 1 983,15 Euros plus 50 percent of their income, 30 percent taxable income over 14 873.64 Euros.
(Applies only to companies that are taxable, so-called Sociétés de capital, such as SA and SARL)
Business insurance Start-ups have to be registered at the Center Commun de la Sécurité Sociale, which handles insurance needs. It should also be noted that all businesses with employees must take out accident insurance at the Association d'Assurance contre les Accidents.
Cecilia Helland