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Establish a Holding Company in Luxembourg

Establish a Holding Company in Luxembourg

Updated on Friday 14th December 2018

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Establish-a-holding-company-in-Luxembourg.jpgThe holding company is a legal entity created for the purpose of owning shares or other assets. The holding company is a very popular business form in Luxembourg, as it offers many advantages to its owners.

Foreign investors who want to establish holding companies in Luxembourg must follow the same procedures for setting up other types of companies, as the holding can take one of the forms acknowledged by the Company Law.

Below, our lawyers in Luxembourg explain how to set up a holding company in the Grand Duchy.

Forms of the Luxembourg holding company

A Luxembourg holding company can be registered under one of the following entities:

  1. A private limited liability company, shortly known as SARL, which is the most popular business form in Luxembourg;
  2. A public limited liability company, also known as SA, which is suitable for large operations;
  3. A partnership limited by shares, also known as SCA and which can be set up by at least two members;
  4. A co-operative, shortly known as SC, which falls under the prospect of the Luxembourg Civil Code.

Most of the times, Luxembourg holdings are registered as SARLs or SAs which imply share capital requirements of 12,500 euros in the case of the SARL, respectively 31,000 in the case of the SA.

The uses of a holding company in Luxembourg

Luxembourg holding companies can be used for various purposes, among which the most common are:

  • - for owning shares in one or more companies;
  • - for owning intellectual property rights;
  • - for acquiring an inheritance;
  • - for e-commerce purposes.

Our law firm in Luxembourg can help investors who want to register a holding company here.

Taxation of the holding company in Luxembourg

The levies a Luxembourg holding company is subject to are:

 Tax  Rate
 Corporate Tax  21%
 Contribution to the unemployment fund   4%
 Share transcription tax   0.5%
 Share registration duty   0.6%

 

Despite the taxes imposed, the holding company can benefit from Luxembourg’s double tax treaties which will significantly reduce the tax burden.

If you are interested in setting up a holding company in Luxembourg, you can contact our local lawyers for assistance through the registration process. You can also rely on our Luxembourg lawyers if you want to establish other types of companies here.