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Doing Business in Luxembourg

Forms of Business Organisation

The two commonly used corporate entities in Luxembourg are the société anonyme (SA) and the société à responsabilité limitée (SARL). The SA corresponds to a public limited company in Anglo-American law and the SARL to a private limited company. Both legal forms are limited liability companies. Luxembourg has also introduced the Societas Europaea (SE), which allows for flexibility for companies to operate across the EU.

Requirements for an SA and an SARL:


SA: Minimum issued share capital of €31,000 of which at least 25% must be paid up at incorporation. Capital may be issued in a foreign currency. Share capital must be fully subscribed in cash or in kind; an independent auditor must determine the value of non-cash contributions. Each year 5% of net profits must be held in reserve until the reserve equals 10% of subscribed capital. The general meeting of shareholders usually proceeds with the increase of share capital, although the board of directors may do so up to a stated maximum for a five-year period insofar as foreseen in the articles of incorporation and subject to later approval by shareholders.

SARL: Minimum capital of €12,400, which must be fully paid up in cash or in kind. Transfer is subject to strict regulations and disclosure requirements.

Founders and Shareholders

SA: Minimum of one founder or shareholder. No residence or nationality requirements.

SARL: Minimum of one founder or shareholder; maximum 40 partners. No residence or nationality requirements.

Board of Directors

SA: Minimum of three members appointed for up to six years; no nationality or residence requirements. In large firms, labour representatives have a right to sit on the board of directors or form a mixed-works council together with management.

SARL: One or more managers; no nationality or residence requirements.

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