How much does it cost to open a company in Luxembourg?

Legal forms and capital requirements

Choosing a legal structure is the first and most important financial decision when entering the Luxembourg market. Depending on the scale of the planned activities, the number of shareholders and the need to raise external capital, entrepreneurs choose between private and public forms of ownership. In Luxembourg, the most popular options remain the SARL (limited liability company) and the SA (public limited company).

In 2017, a simplified form—the SARL-S—was introduced for small businesses and sole traders, which allows for minimal initial investment but imposes strict restrictions on the type of owners and the scale of growth.

The authorised capital must be deposited in a temporary bank account in Luxembourg until the incorporation documents are signed. In the case of an SARL-S, as soon as the capital reaches the threshold of EUR 12,000, the company is required to undergo a conversion procedure to become a standard SARL, which will entail additional costs for notarisation and re-registration. The SA form is most commonly used for large holding structures or financial institutions, as it allows for the free transfer of shares and ensures a high level of anonymity for shareholders through a system of registered shares.

Direct incorporation costs

The process of setting up a company in Luxembourg involves several mandatory stages, each of which has a fixed or variable cost. The main feature of the Luxembourg process is the extensive involvement of the notarial profession in the registration procedures for most types of legal entities.

Notarial and legal services

For SARLs and SAs, signing the memorandum of association before a notary is a legal requirement. Notary fees for the authentication of documents typically range from €1,000 to €2,500 for SARLs and can reach €3,000–€5,000 for SAs, depending on the complexity of the articles of association and the amount of capital contributed. Legal support, including the drafting of the articles of association, approval of the business plan and representation before government authorities, adds a further €1,500 to €3,000 to this amount for standard structures.

In contrast, an SARL-S can be incorporated by means of a private deed, which allows notary fees to be completely excluded from the budget. The total cost of incorporating an SARL-S, including government fees, can be as low as €175–€225. This makes Luxembourg a competitive location for launching tech start-ups on a limited budget.

Government duties and registration fees

In addition to the fees charged by professional consultants, the entrepreneur is required to pay a number of government fees for entering data into official registers.

The total administrative fees for a standard company usually range from €300 to €500, provided there are no complications regarding the verification of the name’s uniqueness or the need to apostille foreign documents.

Business-permit

In Luxembourg, registration in the commercial register does not automatically grant the right to commence business operations. Virtually any economic activity requires prior authorisation (Autorisation d'établissement), issued by the Ministry of the Economy.

The fee for the permit itself is modest — €50, payable either by revenue stamp or bank transfer. However, there are hidden costs associated with the need to meet the eligibility criteria:

The licence shall cease to be valid if the business has not been in operation for more than two years, or if the manager changes their place of residence without notifying the authorities within one month.

Banking compliance

Opening a corporate bank account in Luxembourg in 2025–2026 remains a particularly labour-intensive process. The country’s banks adhere to the strictest anti-money laundering (AML) regulations, which makes the onboarding process lengthy and costly.

For high-tech sectors such as crypto-assets (VASP), banks require enhanced due diligence, the cost of which can reach €5,000–10,000 at the application stage alone. Furthermore, holding a VASP licence from the Luxembourg regulator, the CSSF, is a prerequisite for entering into discussions with a bank, and preparing the documentation for such a licence can cost from €30,000.

The tax landscape for 2025–2026

Luxembourg continues to maintain its status as a competitive tax haven, despite pressure from the EU. In 2025, changes came into force that reduce the overall tax burden on businesses, with the aim of stimulating economic growth following a period of high inflation.

Corporate Income Tax (IRC)

Luxembourg’s tax system is progressive and depends on the level of taxable income.

• For profits up to €175,000: The standard IRC rate will be reduced to 14% from 2025 (previously 15%).
• For profits exceeding €200,000: The standard IRC rate will be reduced to 16% from 2025 (previously 17%).
• For the range 175,001–200,000 EUR, a smoothing mechanism applies at a rate of 30% on the amount exceeding the lower threshold.

Net Wealth Tax

The corporate wealth tax is calculated annually on the basis of assets minus liabilities. From 2025, a new progressive minimum tax scale has been introduced, designed to address the constitutional shortcomings of the previous system.

The standard tax rate is 0.5% for assets up to EUR 500 million and 0.05% on the amount exceeding that threshold. An important optimisation tool remains the option to set up a special reserve, which allows the NWT to be reduced in exchange for retaining profits within the company for five years.

The labour market and social responsibilities

Luxembourg is known for having the highest minimum wage in the EU, which makes labour costs one of the main items of operating expenditure. In 2025–2026, the system of wages and social security contributions will undergo changes due to automatic indexation and pension reform.

Minimum wage (SSM)

Salaries in the country are indexed in line with rising consumer prices. If inflation exceeds 2.5%, all salaries are automatically increased. The current figures for 2026, based on an index of 968.04, are as follows:

To be considered "qualified", an employee must hold an official qualification or have at least 10 years’ experience in the sector. For the employer, this means that the staffing structure and job classifications must be carefully reviewed.

Social security contributions and pension reform

On 1 January 2026, a reform of the social security system came into force in Luxembourg. The key change is an increase in the pension contribution rate from 24% to 25.5%. This contribution is shared equally between the three parties: the employee, the employer and the state. Consequently, the employer’s share will rise from 8.0% to 8.5%.

On average, an employer’s additional social security costs amount to around 12.5%–14% on top of the gross salary. This must be taken into account when drawing up the annual staff budget.

Office facilities

In Luxembourg, having a physical address is not a mere formality but a requirement for obtaining a business licence and registering as a VAT payer. The commercial rental market remained stable in 2025: the office vacancy rate stood at just 3.9%, one of the lowest figures in Europe.

For start-ups and small businesses, renting space in business centres (such as Colors or Spaces) is the ideal solution. For a fixed monthly fee of between €199 and €400, a company not only secures a business address but also gains access to internet, cleaning services, a kitchen and meeting rooms for 10–20 hours per month. A traditional lease (Direct Lease) requires a commitment of 3–9 years and entails additional costs for furniture, insurance and utility bills.

Annual compliance

Keeping a company operational involves regular costs for bookkeeping, filing tax returns and mandatory membership fees.

Accounting services and auditing

The cost of accounting services in Luxembourg depends on the number of transactions and the complexity of the structure.

• Basic maintenance (inactive company): €1,500–€3,000 per year.
• Active operating company: €5,000–€12,000 per year.
• Preparation and filing of tax returns (IRC, ICC, NWT): included in the package or charged separately (approximately €500–€1,000 per form).

From 2025, the thresholds for classifying companies in Luxembourg have been significantly raised. This means that a greater number of businesses now fall into the ‘small’ category, exempting them from the requirement to prepare extended financial statements and undergo a statutory audit.

An audit by an independent auditor (Réviseur d'Entreprises Agréé) is mandatory only for companies exceeding these thresholds, or for specific types of entities (SA, investment funds). The cost of an audit starts at EUR 15,000 and can reach EUR 50,000 for large organisations.

Membership of the Chamber of Commerce and professional fees

All commercial organisations in Luxembourg are required to pay an annual fee to the Chamber of Commerce (Chambre de Commerce). The calculation is based on the company’s profits from two years ago.

• Minimum contribution (in the event of losses or low profits): €70–€140.
• Fixed fee for SOPARFI (holding companies): €350.
• Progressive rate: starting at 0.20% on profits up to €49.5 million, falling to 0.025% on profits above that amount.

Membership invoices are issued automatically; their payment is strictly monitored by the tax authorities, and any delay results in a penalty charge of 0.6% per month.

Total incorporation budget

We can now identify three typical financial profiles for setting up a business in Luxembourg.

Profile 1: Sole proprietorship (SARL-S)

This option is suitable for freelancers or small service-based projects.

• Initial investment: ~€1,500 (including minimum capital, registration without a notary, government fees and the first month’s rent at the business centre).
• Annual operating costs: ~€4,000–€6,000 (accounting, co-working space, minimum asset tax, Chamber of Commerce membership fee).

Profile 2: Standard Limited Liability Company (SARL)

Ideal for trading companies, IT firms with staff, or consultancy agencies.

• Initial investment: ~€20,000–€25,000 (€12,000 in capital, plus notary fees, legal fees, bank charges and three months’ rent).
• Annual operating costs: ~€15,000–25,000 (professional accounting services, office rent, one employee’s salary including taxes, insurance).

Profile 3: Investment holding company or financial entity (SA / SOPARFI)

An option for managing assets, intellectual property or substantial capital.

• Initial investment: ~€45,000–€60,000 (capital of €30,000, complex legal structure, notary, comprehensive compliance).
• Annual operating costs: ~€30,000–50,000 (audit, high tax charges on assets, structural management).

Luxembourg in 2026 remains an expensive but highly efficient jurisdiction. The reduction in corporation tax to 23.87% and the simplification of audit rules for small businesses make entry more accessible, whilst rising social security contributions and property prices in central areas require investors to undertake careful financial planning. The main advice for new entrants is to budget not only for the cost of registration, but also for high-quality tax and legal support, which in Luxembourg is the best safeguard against fines and problems with regulators.