Set Up an Online Shop in Luxembourg

Updated on Thursday 02nd April 2020

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The development of the online business environment has determined Luxembourg to join Ecommerce Europe, the organization which provides for the rights and obligations of online retailers in the country. By retailers we refer to Luxembourg online stores which sell any type of goods or products.

Foreign enterprisers interested in starting an online shop in Luxembourg will be interested to know that the Grand Duchy is currently home to some of the largest online retailers in the world and that it offers better VAT regulations that other European countries.

Our lawyers in Luxembourg can offer more information on the legal advantages for creating an online store here.

Registering an online shop in Luxembourg

Once the enterpriser has decided to start an online business in Luxembourg, he or she must select a structure, have the documents of incorporation prepared and filed with the Companies Registrar. Foreign entrepreneurs can rely on our legal services in Luxembourg if they want to set up a shop.

Following the completion of the company registration procedure, the owner must purchase a unique domain name and register it with RESTENA (the authority in charge with the registration of domain names in Luxembourg). Following that, the creation of a website with the chosen name is mandatory. Creating a merchant account which will ease the clients to pay for the goods or services purchased is also advisable.

Requirements for online stores in Luxembourg

Apart from the business licenses related to the sale of products online, a Luxembourg shop must also comply with other regulations among which:

displaying information about the company, such as the registered address of the business and a telephone number;
showing information on the characteristics of the products or goods sold;
indicating the price of the products and if any additional charges apply;
providing information about after-sale conditions, guarantees and service;
providing information about the cancellation of the contract.

It should be noted that the legal guarantee of a product sold in a Luxembourg physical or online shop is 2 years, however exceptions apply in certain cases.

Legislation applicable in the e-commerce field in Luxembourg

There are two main laws which govern the establishment of e-commerce companies in Luxembourg. These are the Civil Code and the EU Directive 97/7/EC related to the sale of goods and services online. These laws are completed by the Company Law which provides for the incorporation of a business form which will give the online company the right to carry out commercial activities and by the Penal Code which provides for the penalties imposed to retailers failing to comply with the laws mentioned before.

Our law firm in Luxembourg can offer detailed information on the laws applicable to e-commerce companies operating in the Grand Duchy.

Registration of an e-commerce platform in Luxembourg

An e-commerce business can take the form of a limited liability company or even of a sole proprietorship, which means the company registration procedure with the Luxembourg authorities is compulsory. Following that, the platform for selling online goods or services can be created. This implies buying a domain name and creating a website.

The Luxembourg legislation on e-commerce provides for two types of businesses:

partial e-commerce, also known as offline e-commerce which implies for an order to be placed online and the delivery to be made by courier;
pure e-commerce, also known as online e-commerce which implies for the order and the delivery to have an electronic character.

The VAT applied to e-commerce companies in Luxembourg is 17%, one of the lowest rates in Europe.

For assistance in setting up an online store in the Grand Duchy, please contact our Luxembourg law firm.