Luxembourg company formation for non-residents

Why groups choose Luxembourg

Luxembourg is a major investment fund centre, and many holding companies, fund vehicles and family structures sit there for that reason. Banks, lawyers, auditors and administrators are used to cross-border groups.

The S.à r.l. is the standard company for these structures. It is flexible, it can hold shares in companies across the EU and beyond, and dividends and gains from qualifying holdings can be exempt under the participation exemption, subject to conditions.

Luxembourg is a good fit when the structure needs credibility with institutional investors or banks. It is rarely the right choice for a small trading business, because running costs are higher than in most EU countries.

How Luxembourg company tax works

Profit tax has three parts. Corporate income tax is 16% for taxable income above €200,000, with lower rates for smaller profits. A 7% solidarity surcharge is added to that tax. Municipal business tax is then charged by the commune, at 6.75% in Luxembourg City.

Together, these give a combined rate of about 23.87% for a company in Luxembourg City as of 2026, based on the rates in the law of 20 December 2024, which cut corporate income tax from 17% to 16% from tax year 2025. Other communes have different business tax rates.

Companies also pay annual net wealth tax on their net assets, with a minimum charge that applies even when the company has no profit. Dividends paid by a Luxembourg company carry 15% withholding tax, which is often removed for EU parent companies and reduced by treaties. VAT is 17%.

• Corporate income tax: 16% (income above €200,000)
• Solidarity surcharge: 7% of corporate income tax
• Municipal business tax: 6.75% in Luxembourg City
• Combined: about 23.87% in Luxembourg City (as of 2026)
• VAT: 17% standard rate

How formation works

An S.à r.l. is formed by notarial deed. We prepare the articles and the notary file, and a Luxembourg notary runs its own identity and source-of-funds checks.

You pay the €12,000 share capital into a bank account opened for the company, or contribute assets valued in a report. The bank certificate goes to the notary, who executes the deed. You can sign by power of attorney without travelling.

The notary files the deed with the Trade and Companies Register (RCS), run by Luxembourg Business Registers, and it is published in RESA, the official electronic gazette. The whole process usually takes 2–3 weeks after KYC.

Managers, domiciliation and substance

An S.à r.l. needs at least one manager (gérant), who can be of any nationality and live anywhere. It can have between 1 and 100 shareholders, individuals or companies.

The registered office must be in Luxembourg. Companies without their own office use a domiciliation agent, which must be a licensed professional under the 1999 domiciliation law. The agent also keeps records and checks the company under anti-money laundering rules.

Tax residence and treaty access depend on where the company is managed. Luxembourg tax authorities and foreign tax authorities both look for board meetings held in Luxembourg, local managers who take real decisions and, for larger structures, office space and staff.

Annual accounts, audit and filings

The shareholders approve the annual accounts within 6 months of the year end, and the accounts are filed with the RCS within 1 month of approval, so 7 months after year end at the latest. Corporate tax returns go to the ACD each year.

An approved statutory auditor (réviseur d'entreprises agréé) is required only when the company exceeds two of three size limits for balance sheet total, net turnover and average staff of 50. An S.à r.l. with more than 60 shareholders also needs a supervisory auditor (commissaire).

Most small holding companies file abridged accounts and need no statutory audit. A Grand-ducal regulation of 25 October 2024 applied the EU's 2023 inflation update and raised the balance sheet and turnover limits by about 25%. Your specialist checks the current amounts against your figures each year (confirm with your specialist).

When Luxembourg fits, and when it does not

Luxembourg fits when the company sits at the top or in the middle of a group: holding EU subsidiaries, owning real estate or investment portfolios, or working alongside a Luxembourg fund. In those roles the participation exemption, the treaty network and the depth of local banks, administrators and auditors matter more than the headline rate.

It fits less well for a small trading or service company run by one founder abroad. The €12,000 capital, the notary, the domiciliation agent, the annual net wealth tax and the accounting costs add up, and a company with no decisions made in Luxembourg may not get the treaty benefits it was set up for.

If you want an EU holding company with lower running costs, your specialist can compare Luxembourg with the Netherlands or Cyprus. For an operating business selling into the EU, Ireland or Estonia is often the simpler starting point.

Beneficial owners and the RBE

Every S.à r.l. files its beneficial owners with the Register of Beneficial Owners (RBE), also run by Luxembourg Business Registers, within 1 month of learning of them. Changes follow the same deadline.

The Court of Justice of the EU ruled in November 2022, in cases referred by a Luxembourg court, that giving the general public unrestricted access to beneficial owner data was invalid. A law of 23 January 2025, in force since 1 February 2025, replaced public access with access for defined groups.

Authorities, professionals with anti-money laundering duties and people who show a legitimate interest in fighting money laundering can still see the data. Late or wrong filings can be fined. That is privacy within the law: ownership stays visible to banks, notaries and tax authorities.