Luxembourg

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General Information

Luxembourg is a small European country, surrounded by Belgium, France and Germany. It’s mostly rural, with dense Ardennes forest and nature parks in the north, rocky gorges of the Mullerthal region in the east and the Moselle river valley in the southeast. Its capital, Luxembourg City, is famed for its fortified medieval old town perched on sheer cliffs.

Principal Corporate Legislation

1990 Société de Participation Financiére (SOPARFI) Holding Company (SA).

Type of Company for International Trade, Investment & Tax Planning
  • 1990 SOPARFI (Holding) Company
  • 1990 SOPARFI Holding S.A. (Société Anonyme)
  • 1990 SOPARFI Holding S.A.R.L. (Société Г  Responsabilitée Limitée)
Characteristics of IBCs:
  • The registered address of the company must be in Cyprus;
  • The number of shareholders in such a company may be from 1 to 50 and in case there is only one shareholder, it should be specified in the Memorandum and Articles of Association of the company;
  • Shareholders may either be Cypriot or foreign natural or legal persons;
  • There is no minimum authorized share capital but, as a matter of course, such share capital is usually EUR1,000 and the minimum issued share capital is EUR1,00;             
  • There should be at least one Director and one Secretary;
  • Cyprus Companies are taxed at least 10% on their profits, provided that their management and control is exercised within Cyprus. In such case, these companies may be able to take advantage of the Double Tax Treaty Network available in Cyprus. If the management and control is outside Cyprus, then the company would not be subject to taxation in Cyprus;
  • An IBC should submit accounts to the Tax Authorities and the Registrar of Companies;
  • Anonymity, if required, is secured by having the shares held by nominees or trustees.
Advantages that an IBC may have:
  • Gains from buying and selling shares and/or other securities are exempt from tax;
  • No capital gains tax on profits made by the disposal of assets exists, except for immovable property situated in Cyprus;
  • Dividends received from abroad are completely exempt from income tax;
  • Lower withholding tax rates in other countries on remittances of income resulting from dividends, royalties, or interest due to the applicability of Double Taxation Treaties;
  • Dividends (including payments of interest or royalties) paid to non-resident shareholders are not subject to any withholding taxes;
  • Its profits are taxed at the corporation tax rate of 10%, provided its management and control is in Cyprus.
Share Capital
The minimum authorised share capital is EUR 31,000. Minimum paid up share capital is EUR 31,000.
Classes of Share Available
Registered shares, bearer shares, preference shares, shares with or without voting rights.
Registered Office Required
Yes, must be maintained in Luxembourg.
Directors
The minimum number of directors is three. Director can be of any nationality and need not be a Luxembourg resident but to follow the rules of the “permanent establishment” the majority of local directors is advisable. Corporate directors are permitted.
Shareholders
The minimum number of shareholders is two.
Publicly Accessible Records
Yes.
Nominee Shareholders and Nominee Directors
Allowed.
Location of Meetings of Directors and Shareholders
Anywhere.
Personal Presence Required
No.
Taxation
Normal rates. A company can be exempt from corporate tax in case some conditions are met.
Double Taxation Treaty Access
Yes.
Requirements to File Accounts
Yes.
Requirement to File Annual Return
None.
Language of Name
English.
Name of a Company
The words “Société Anonyme”, “SA” or “AG” must be part of the name of every company.
Time to Incorporate
One week.
Share Capital
 The minimum authorised share capital is EUR 31,000. Minimum paid up share capital is EUR 31,000.
Classes of Share Available
 Registered shares, bearer shares, preference shares, shares with or without voting rights.
Registered Office Required
 Yes, must be maintained in Luxembourg.
Directors
 The minimum number of directors is three. Director can be of any nationality and need not be a Luxembourg resident but to follow the rules of the “permanent establishment” the majority of local directors is advisable. Corporate directors are permitted.
Shareholders
 The minimum number of shareholders is one.
Publicly Accessible Records
 Yes.
Disclosure of Beneficial Ownership to Authorities
 No.
Personal Presence Required
 No.
Taxation
 Maximum rate is 29,63%.
Double Taxation Treaty Access
 Yes.
Requirements to File Accounts
 Yes.
Requirement to File Annual Return
 None.
Currency
 Euro.
Language of Name
 English.
Restricted Words
 Words such as “Assurance”, “Bank”, “Building Society”, “Royal”, “Trust Company”, “Trustee Company” etc. will require justification.
Name of a Company
 The words “Société Anonyme”, “SA” or “AG” must be part of the name of every company.
Time to Incorporate
 One week.