Luxembourg Société à Responsabilité Limitée (SARL)
Luxembourg
Luxembourg's SARL is the standard private limited company structure, dominant in EU fund holding, IP, and financial-services structures. Minimum share capital is EUR 12,000 fully paid in at incorporation. Luxembourg's combined corporate tax rate (~24.94% in Luxembourg City) is materially higher than Ireland (12.5%) or many EU competitors, but the country's extensive tax-treaty network (84 treaties), participation exemption regime (95% exemption on qualifying dividends + capital gains), and IP regime (80% exemption on qualifying IP income) make it a leading holding-company jurisdiction. Banking difficulty has risen post-2018 with stricter substance and AML requirements — most non-resident-owned SARLs use specialised corporate service providers (TMF, Citco, Intertrust, Vistra) rather than direct banking relationships.
Formation Details
- Setup Time
- 4 days
- Setup Cost
- $4,500
- Annual Cost
- $4,500
- Corporate Tax
- 24.94% combined CIT + municipal business tax + solidarity surtax (Luxembourg City). Lower in some communes.
- VAT Threshold
- $38,000
- Nominee Directors
- Allowed
- Public Register
- Yes
- Residency Required
- No formal Luxembourg-resident director requirement, but practical management-and-control substance is increasingly tested under post-BEPS rules.
- Banking Difficulty
- High
Economic Substance Requirements
- Physical Office
- Not required
- Local Director
- Not required
- Minimum Staff
- —
- Annual Local Spend
- —
EUR 12,000 minimum share capital fully paid at incorporation. Substance increasingly tested via mind-and-management tests for tax residence — meaningful Luxembourg presence (board meetings in Luxembourg, local director or qualified manager) needed for tax-treaty access. Notarised deed of incorporation required (notary fee ~EUR 1,500-2,500).
Annual Maintenance Breakdown
Typical recurring costs after formation. Most jurisdictions have additional variable costs (accounting fees, professional tax prep, statutory audits) not shown here.
| Item | Annual Cost (USD) | Notes |
|---|---|---|
| Domiciliation / registered office | $1,800 | EUR 1,500-3,000/yr in central Luxembourg City. |
| Accounting + tax filings | $4,000 | EUR 3,500-7,000/yr. Annual accounts must be filed with Trade and Companies Register (RCS); independent audit required only above size thresholds. |
| Trade and Companies Register (RCS) annual filings | $100 | Annual accounts filing fee ~EUR 100; accounts publicly visible. |
| Beneficial owner register (RBE) | $50 | Initial filing + maintenance via UBO declaration to RBE. |
Banking Pairing Recommendations
Providers commonly used with this entity type for business banking.
US Person Considerations
Luxembourg SARL owned by US persons typically classified as CFC; Form 5471 required. The US-Luxembourg tax treaty provides treaty-rate withholding on dividends, interest, royalties. Luxembourg's role in EU fund structures often involves US tax-transparent partnership equivalents.
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