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Luxembourg – Self-Employment

Luxembourg is a small but thriving country located in the heart of Europe. With a stable economy, low taxes, and a high quality of life, it is an attractive destination for expats looking to start their own businesses or work as self-employed individuals. In this article, we will explore the process of self-employment and starting a business in Luxembourg, as well as the incentives and programs available to expats.

Breakdown how self-employment works for expats in Luxembourg

Expats looking to work as self-employed individuals in Luxembourg must register with the local authorities and obtain the necessary permits and licenses. The process can be complex, and it is important to seek professional advice to ensure compliance with all regulations.

To work as a self-employed individual in Luxembourg, you must register with the National Social Security Fund (CNS). You will also need to obtain a business permit from the Luxembourg Chamber of Commerce.

Once you have registered, you will need to pay social security contributions and taxes on your income. As a self-employed individual, you will be responsible for filing your tax returns and making regular payments to the tax authorities.

Provide a detailed step by step guide on how an expat can register as self-employed in Luxembourg

The process of registering as a self-employed individual in Luxembourg can be broken down into the following steps:

  1. Choose a business structure – Decide on the legal structure of your business. In Luxembourg, you can choose to operate as a sole trader or set up a limited liability company (SARL).

  2. Obtain a business permit – Apply for a business permit from the Luxembourg Chamber of Commerce. You will need to provide a business plan and proof of financial resources.

  3. Register with the National Social Security Fund – Register with the National Social Security Fund (CNS) and obtain a social security number.

  4. Obtain any necessary permits and licenses – Depending on the nature of your business, you may need to obtain additional permits and licenses from the local authorities.

  5. Set up bookkeeping and accounting – Set up bookkeeping and accounting procedures to track income and expenses.

  6. File tax returns – File tax returns on a regular basis, either monthly or quarterly, depending on the size of your business.

Can you work as a digital nomad in Luxembourg?

Yes, Luxembourg is a great destination for digital nomads. The country offers a high standard of living, good infrastructure, and a favorable tax system. However, digital nomads may need to obtain a work permit or residence permit, depending on the length of their stay and the nature of their work.


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Setting up a Company in Luxembourg

Here is a more detailed step-by-step guide on how to set up a company in Luxembourg:

  1. Choose a legal structure – Decide on the legal structure of your company. In Luxembourg, the most common type of company is the Société à responsabilité limitée (SARL), which is a limited liability company.

  2. Reserve a company name – Reserve a unique company name with the Luxembourg Business Registers (LBR). You can do this online through the LBR’s website.

  3. Draft the company statutes – Draft the company statutes, which are the legal documents that outline the purpose, structure, and rules of your company. The statutes must be written in French or German, and they must be notarized by a Luxembourg notary.

  4. Deposit the initial capital – Deposit the initial capital required for the legal structure you have chosen. For a SARL, the minimum capital requirement is ‚€12,500, of which at least 25% must be paid up front. The capital can be deposited into a bank account in Luxembourg or in another EU country.

  5. Obtain a business permit – Apply for a business permit from the Luxembourg Chamber of Commerce. You will need to provide a business plan and proof of financial resources.

  6. Register with the Trade and Companies Register – Register with the Trade and Companies Register (RCS) and obtain a registration number. You can do this online through the RCS’s website.

  7. Obtain any necessary permits and licenses – Depending on the nature of your business, you may need to obtain additional permits and licenses from the local authorities.

  8. Set up bookkeeping and accounting – Set up bookkeeping and accounting procedures to track income and expenses. You will need to comply with Luxembourg’s strict accounting and tax regulations.

  9. File tax returns – File tax returns on a regular basis, either monthly or quarterly, depending on the size of your business. You will need to pay corporate income tax, which is currently set at 24.94%.

Incentives or Programs for Expats in Luxembourg

Luxembourg offers several incentives and programs to encourage entrepreneurship and foreign investment. Here are a few examples:

  1. Luxembourg House of Financial Technology (LHoFT) – The LHoFT is a public-private initiative that supports fintech startups by providing mentoring, networking, and workspace.

  2. Fit 4 Start – Fit 4 Start is a startup accelerator program that provides funding, coaching, and access to investors to early-stage startups.

  3. Luxembourg Business Angels Network (LBAN) – The LBAN is a network of angel investors who provide funding and support to startups.

  4. Luxembourg Trade and Investment Office (LTIO) – The LTIO is a government agency that provides information and support to foreign companies looking to invest in Luxembourg.

  5. Tax incentives – Luxembourg offers a range of tax incentives to businesses, including a reduced corporate income tax rate for small and medium-sized enterprises (SMEs) and a tax credit for research and development (R&D) expenses.

Overall, Luxembourg offers a favorable business environment for expats looking to start their own businesses or work as self-employed individuals. With its stable economy, favorable tax system, and supportive business community, it is a great place to pursue entrepreneurial ambitions. However, it is important to keep in mind the strict regulatory and legal requirements that come with setting up a business in Luxembourg. Working with a local attorney or business advisor can help navigate the complexities and ensure compliance with all applicable laws and regulations.


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