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Business

How to open a business bank account

Learn what you need to open a business account, which bank to choose, and what documents to provide.

Last time updated
18.12.23

A business account is necessary for an entrepreneur to conduct transactions and deposit authorized capital before registering a company. For example, the presence of authorized capital in the account is a prerequisite for the creation of companies such as SARL and SA.

Who needs to open an account

All entrepreneurs, regardless of the organizational and legal form of the business, including self-employed or sole proprietors. In their case, however, the procedure for opening a corporate account is not much different from the procedure for opening a personal account. The difference is that you must provide the name of the company or individual entrepreneur. And although a sole proprietorship does not require authorized capital, it does require a business account.

For SARLS, SA and other companies, the following are usually required:

  • Company registration details, including the number issued by the national company registry;
  • Constituent documents (apostilled, notarized copies);
  • Directors' data, copies of their identity cards;
  • Information on the beneficiary — natural or legal person. In the case of the latter, the incorporation documents with a natural person as the ultimate owner are also required. Copies of the identity cards of the beneficial owners;
  • Description of the main activity;
  • Official confirmation of the origin of the company's funds to be used as authorized capital;
  • Projected annual account turnover;
  • Bank application form.

Luxembourg banks follow the KYC procedure — "Know Your Customer". They have the right to request any additional information and documentation in order to open an account. This may include information about the main counterparties and examples of contracts with them, planned regions of operation, etc.

How to choose a bank to open a business account

It should be noted that there are many banks in Luxembourg and therefore many banking products. The conditions for opening business accounts vary and depend on a number of factors: size and type of business, personality of the founder, etc.

Banks may also offer special accounts for aspiring entrepreneurs, small businesses, and startups. To understand which one is best for you, you will need to negotiate with several financial institutions.

The most important aspects are:

  1. What types of businesses does the bank serve?
  2. Can they offer special terms for your type of business?
  3. In which currency are transactions made, with which countries, and how quickly?
  4. What are the terms of account maintenance?

In general, the rates of local banks are higher for companies than for individual entrepreneurs. However, the cost and other terms of service must be clarified with a specific financial institution.

What do you need to open an account

Any entrepreneur registering a company with capital must deposit the minimum authorized capital in a bank account before signing the Articles of Association.

This means that by the time the authorized capital is deposited, all documents must be received:

  • A certificate confirming the company name;
  • Permission to conduct business (all requirements for obtaining it have been met);
  • A draft of the articles of association of the company to be established and a package of all documents necessary for opening a bank account.

All these procedures take a long time, on average about 3 weeks.

Once all the previous steps have been completed, this is the procedure to follow:

  • The entrepreneur brings to the bank all the necessary documents and, of course, the draft articles of association.
  • On the basis of the draft articles of association, the bank opens an account that remains blocked for all transactions until the company is incorporated. The capital is paid into this account. After it has been credited, the bank issues a certificate of non-transferability stating that the funds are frozen until the company is finally incorporated.
  • This certificate is given to the notary and serves as confirmation of the payment of the authorized capital of the company.
  • When a company is officially registered, the notary issues a certificate of unfreezing of funds (certificat de déblocage) to the entrepreneur.
  • The entrepreneur submits this certificate to the bank together with the final version of the articles of association and any additional documents requested by the bank.
  • The bank will then unfreeze the funds and make them available to the company.
Where to consult
  • Directly from the banks.
  • At the Luxembourg Chamber of Notaries: 53, boulevard Joseph II, L-1840. Telephone: (+352) 44 70 21.
  • At the House of Entrepreneurship on weekdays from 8:30 to 12:00 and from 13:00 to 17:00. Address: 14, rue Erasmus, L-1468. Telephone: (+352) 42 39 39 - 330.
  • At the Chamber of Commerce in the Contact Entreprise team by e-mail contact@cdm.lu.

If you do not speak English or one of the three official languages of Luxembourg, it is recommended that you seek the assistance of an interpreter. You can also issue a general power of attorney to reduce bureaucracy, but this does not mean that you do not need to come to the bank in person.

Guide
Employment
Work

How to become self-employed in Luxembourg

We took photos from these sources: bruce mars on Unsplash

Authors: Maria
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