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Guide to register a SARL-S company in Luxembourg (company formation)

LuxembourgPosted on 16 January 2023 by Team@LuxExpats

Registering a company in Luxembourg used to be cumbersome. This has been relatively simplified and the cost of starting a company has been brought down signficantly. Costs of running a company has not however come down signficantly. In this article, we are offering a quick guide on how to start a SARL-S company.

To get started, setup an appointment and get started with House of Entrepreneurship: houseofentrepreneurship.lu

House of Entrepreneurship directs you to the business application template that you can modify to apply for business license, they explain the procedure and the list of required documents. You don't need a notary or a business advisor, you can complete the entire process yourself.

Here is a quick summary on what all happens and what you need to do (if we are missing any steps, text us and we will add).

What you need?

1. EUR 1 is the minimum capital required for SARL-S company.

2. A registration address and your National ID number.

3. Passport copy and appropriate residence status in Luxembourg.

4. You need to be a natural person (meaning individual).

5. Residence registration documents.

First the complete steps overview to register a company:

Read first: guichet.public.lu/en/entreprises/creation-developpement/forme-juridique/societe-capitaux/sarl-s.html

Step 1. Apply for a business license from the Ministry (typically takes 4-8 weeks)

Step 2a. Once the business license approval comes through, then send the approval document to register with RCS (company registry) - this can be done with the business license approval. lbr.lu/mjrcs/jsp/webapp/static/mjrcs/en/mjrcs/legal.html?pageTitle=footer.legalaspect

Step 2b. Open a Bank account based on the registration (can be done in parallel with Step 2a) - this can be done with the business license approval.

Step 3. Register for VAT: You need to register for VAT and mention the VAT exemption scheme (if you expect the annual turnover will not exceed EUR 35k). If the annual turnover exceeds EUR 35k, you need to inform the VAT authorities accordingly and get a VAT number. From this point on, you will always charge VAT even if your annual turnover later comes below EUR 35k. Register for VAT. Read this: guichet.public.lu/en/entreprises/fiscalite/tva/inscriptions-declarations/inscription-tva.html 

Step 4. You need to inform the social contributions (CCSS) whether you're going to run a payroll. If you're not running a payroll, you can make a voluntary contribution that can be done up to half your required minimum salary. That will turn to be less then EUR 200 per month per person. Check with an accountant for this on how to get this done.

Step 5. If you're going to run a payroll. If so, you need to have a pay roll provider who can register you. You need to pay the mentioned monthly contribution to CCSS that depends on the salary amount. 

Step 6. Find an accountant to file annual accounts.

Step 7. VAT filing is different from annual acocunts filing. This can be done quarterly or annually. If the VAT office sends you a notice to do it quarterly, you're obliged to do quarterly VAT.

Filings you need to do:

1. VAT filing - if you've exceeded the threshold at least once, you need to start filing. It can be done annually unless specifically asked to be filed quarterly. Then you file 4 VATs or 1 VATs.

2. Annual accounts and company accounts.

Costs of running a SARL-S company in Luxembourg:

Costs are high compared to other EU jurisdications.

1. You're required to pay advanced tax. You can get this lowered or not pay if you're not expecting high income. You've to do this step, else you will be asked to pay. And you may incur fine. So, call them immediately and inform them of your expected income.

2. CCSS payment if you're running a pay roll. This you need to transfer every month for each employee. Ask your payroll company on how much to transfer.

3. Chamber of Comerce fee. This is mandatory payment and cannot be skipped. In other jurisdictions this is not usual.

4. If you need to be covered by CNS, even if u are not taking any income from the company. You need to pay the minimum amount required every month and covered under CNS.

5. Payroll costs. If you're running a payroll, then there is a cost to pay to the payroll company for every pay roll. Can be EUR 15- EUR 25 per payroll depending on the company per payroll certificate.

6. Accountant fee: Annual accounts filing fee.

7. VAT filing fee. For every VAT (quarterly or annually) there is an annual VAT filing fee.

8. Bank account fee. Your bank might have costs associted fee for having a bank account or having a minimum threshold.

If we are missing any steps, send us a message here on the platform or on FB page facebook.com/luxembourgexpats.

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