How to register a company in Luxembourg: A comprehensive guide

Set up your business in Luxembourg, a financial powerhouse in the heart of Europe.

Though Luxembourg is a small country, it offers access to an affluent consumer market and sophisticated business market and is a global hub for trade, finance, and innovation.

The World Intellectual Property Organization ranks it among the top four most politically stable countries, and its tax structure favors both investors and employees, making it an extremely attractive business hub.

When expanding into Luxembourg, businesses can either establish a legal entity or partner with an Employer of Record (EOR) to simplify hiring, payroll, and ongoing compliance.

This guide details the process of registering a company in Luxembourg, the associated costs, and how an Employer of Record (EOR) can offer a more manageable solution for hiring employees that reduces your non-compliance risks.

Luxembourg company registration: Key advantages

Luxembourg offers a strategic EU location, business-friendly tax policies, and strong legal frameworks, making it ideal for company registration. Its stable economy, investor-friendly regulations, and access to global markets further enhance its appeal.

Here are some of the key advantages:

• Access to EU markets: By establishing your company in Luxembourg, you gain unfettered access to the European Union’s vast consumer base. 
• Favorable tax environment: Businesses, and employees, can benefit from attractive corporate and income tax rates, enabling them to retain more profit.
• Business-friendly policies: Streamlined procedures for company formation, making it remarkably easy to establish your presence.
• Skilled workforce: Luxembourg attracts a highly educated talent pool, with many professionals fluent in English, French, and German.
• Economic stability: Luxembourg’s resilient economy and strong investment climate provide a secure foundation for long-term growth plans.
• Government incentives: Grants, R&D assistance, and programs are designed to support businesses at every stage of development, providing crucial resources and financial support.
• Robust infrastructure: A modern and efficient infrastructure ensures that your business can operate smoothly and efficiently and connect to global markets.

As you consider establishing your presence in Luxembourg, you’ll encounter different registration options. A crucial distinction lies between standard company registration and utilizing an Employer of Record (EOR) service. Understanding how they differ is essential for making the right choice for your business operations in this country.

Standard company registration vs. EOR expansion in Luxembourg

Let’s explore the key distinctions between these EOR and standard company registrations.

• Standard company registration: Requires setting up a legal entity in Luxembourg. It offers full control but involves significant time and cost.
• EOR: Lets you hire workers in Luxembourg without establishing an entity, streamlining market entry and reducing costs.

Aspect	Standard company registration	Employer of Record (EOR)
Legal structure	Creates a new Luxembourg legal entity	Hire employees in Luxembourg without setting up an entity.
Control	Full control over all business operations	Limited control over HR, payroll, and compliance, as the EOR is the legal employer.
Setup time	2-4 months on average	Immediate to a few days.
Initial cost	High (€12,000+ for SARL)	Lower setup costs but higher per-employee fees.
Ongoing cost	Fixed	Percentage-based fees (typically 5-15% of salary)
Compliance	Must comply with Luxembourg’s corporate laws, taxation, and labor regulations.	The EOR handles compliance with local employment laws and taxes.
Tax obligations	Direct corporate and employer tax liability	EOR handles employment taxes
Scalability	Highly scalable but administrative burden increases	Flexible for quick market entry and exit, but limited for large-scale operations.
Suitable for	Long-term, substantial operations	Market testing, limited headcount, rapid entry

While registering your business in Luxembourg is not difficult, compliance can be costly and require local expertise and it can increase your legal risks and the administrative burdens on your HR team. An EOR reduces these responsibilities and workloads significantly, allowing you to concentrate on talent acquisition and your core business strategy when expanding in Luxembourg. The following section explains how.

How an EOR makes hiring and company registration easier in Luxembourg

An Employer of Record (EOR) will legally hire employees on your behalf, manage payroll, and ensure adherence to the local employment laws in Luxembourg.

Here are the benefits of using an EOR:

• Quick market entry: With an EOR, you skip entity registration and start hiring within days.
• End-to-end payroll management: EOR ensures timely salary payments, tax deductions, and benefits administration.
• Compliance with labor laws: EOR handles employment contracts, benefits, and legal obligations.
• Lower expansion costs: You avoid setting up a subsidiary and reduce your day-to-day HR burdens.
• Flexible workforce scaling: You can hire, onboard, or offboard employees with fewer legal constraints.
• Risk-free international hiring: Reduce exposure to legal disputes, employee misclassification, and tax penalties.

However, any company engaging in commercial, industrial, craft, or liberal activities in Luxembourg must register with the Luxembourg Business Registers (LBR) and, in many cases, obtain a business permit. Company registration is also a must if you want to participate in public tenders. Let’s explore the process.

A detailed walkthrough of company registration in Luxembourg

Regardless of your path—EOR-assisted or self-managed registration—familiarity with the procedures is vital.

Here are the seven key steps involved in Luxembourg company registration:

Step 1: Choose your business structure

• SARL: Ideal for small-to-medium businesses with a minimum capital of €12,000.
• SA: Suitable for larger enterprises, requiring €30,000 minimum capital.
• SAS: Offers flexibility in management and shareholding.
• Sole proprietorship: For self-employed individuals.
• Branch or subsidiary: A foreign company’s extension in Luxembourg.

Step 2: Secure a company name

Ensure the name is available through the Luxembourg Business Registers (LBR).

Step 3: Organize Articles of Association

For structures like SARL or SA, draft and notarize Articles of Association outlining governance and operational structure.

Step 4: Set up a business bank account

Deposit the required capital into a Luxembourg-based bank.

Step 5: Register with the LBR

Submit your incorporation documents for official registration.
Key documents required for registration:

1. Articles of Association (statuts)
   • Notarized and signed (especially for SARL, SA, SAS)
   • Must include: company name, registered office, business purpose, share capital, and rules on governance
2. Proof of payment of share capital
   • Issued by the Luxembourg bank where the capital is deposited
3. Proof of business address
   • Lease agreement, ownership document, or domicile certificate
4. Identification documents for all founders and managers
   • Valid passport or ID
   • Recent criminal record extract (less than 3 months old)
5. Declaration of the beneficial owner(s) (RBE filing)
   • Required under anti-money laundering laws
6. Professional qualifications or business license (if applicable)
   • For regulated activities (submitted with business permit application)

Step 6: Apply for a business license

Before beginning operations, most businesses in Luxembourg must obtain a business permit (autorisation d’établissement) issued by the Ministry of the Economy. This applies to commercial, craft, and certain liberal professions. You may require additional permits for finance, insurance, healthcare, education, childcare, and transport. Processing time is usually within 1 to 3 weeks, assuming all documents are complete.

Step 7: Register for taxes and social security

• Register your company with the Luxembourg Inland Revenue (ACD) for corporate income tax (CIT) and VAT (if applicable).
• As of 2025:
  • 14% CIT for income up to €175,000
  • Progressive rates apply up to 16% for income over €200,000
  • The total effective tax rate in Luxembourg City: 23.87% (approximately)
• Register with the Joint Social Security Centre (Centre commun de la sécurité sociale – CCSS) for employee social security contributions.
• If hiring staff, ensure you’re also compliant with labor regulations via ITM.

Alternative registration methods

• Online registration: Digital business registration via eDesk (Guichet.lu) allows faster approvals.
• In-person registration: Filing through notaries or business consultants takes longer.

Beyond the registration steps, your strategic financial planning hinges on cost awareness. Let’s unpack the financial implications of your Luxembourg venture.

Cost of registering a company in Luxembourg

Setting up a company in Luxembourg may seem complex, but a structured, step-by-step approach streamlines the process. However, your expenses will extend beyond the initial setup, you need to consider ongoing compliance requests and legal and tax consultation fees.

From registration fees to ongoing expenses, here’s what you need to consider:

• Registration costs: Fees vary by company structure and registration method. Expect fees for registration and publication in the official gazette (RESA).
• Business license: Fees depend on the sector and required permits.
• Share capital:
  • SARL: Minimum €12,000.
  • SA: Minimum €30,000.
• Legal services: Drafting Articles of Association and legal consultations can cost several thousand euros.
• Notary fees: Vary based on share capital and article complexity.
• Annual maintenance costs: Accounting, auditing, and tax filings can range from a few thousand to tens of thousands of euros.
• Taxes: VAT, corporate income tax, municipal business tax, and net wealth tax apply.

Cost analysis: EOR versus standard company registration

When expanding your business in Luxembourg, consider the costs before deciding between traditional company registration or using an Employer of Record (EOR).

Below is a quick comparison to help you decide:

Cost aspect	Standard registration	Employer of record (EOR)
Setup fees	High	Low since you eliminate the need for entity setup
Share capital	Minimum capital	Not required
Legal and compliance	Requires independent compliance	Handled by EOR
Accounting and admin	Monthly accounts payable, filings	Included
Annual maintenance	Cost varies	Predictable fee

We advise you to verify current regulations and costs through Luxembourg Business Registers (LBR). Or speak to our team at Multiplier, our experts will be able to tailor a cost comparison between EOR and company registration that is up-to-date and tailored to your specific business needs.

Are you looking for assistance with growing your business in Luxembourg? Multiplier’s EOR solution takes care of global expansion, from operations to global compliance and paperwork, so you can scale efficiently.

Expanding with Multiplier’s EOR solution in Luxembourg

Establishing your business in Luxembourg doesn’t have to be complicated. With Multiplier’s EOR solution, you can remove the administrative burden and focus on what matters—growing your business.

Why Choose Multiplier’s EOR?

• Native hiring proficiency: Multiplier handles compliant contracts and smooth onboarding, ensuring your team is set up right from the start.
• Seamless payroll: Enjoy accurate payroll processing, complete transparency, and full local compliance and complete peace of mind.
• Integrated HR suite: Our platform simplifies onboarding, expense tracking, and time-off management, all in one place.
• Assured compliance: Stay fully compliant with Luxembourg’s labor laws and tax codes, backed by our local expertise.
• Compelling benefits: We offer locally tailored benefits to attract top talent and boost employee satisfaction.
• Support you can lean on: With Multiplier, you get dedicated customer support and benefit from industry-leading security certifications.

Ready to scale in Luxembourg confidently? Book a Demo today to see how we can help you thrive!