Hesitating between a sole proprietorship, Sàrl/Sàrl‑S, SA, SAS or SCS/SCSp? Below is a concise roadmap to select the right vehicle, understand when a business permit is required, and complete the registration, tax and social steps with confidence.
1) Pick the right vehicle
Under Luxembourg company law, commonly used vehicles include: sole proprietorship (EI), private limited liability company (Sàrl), simplified private limited liability company (Sàrl‑S), public limited company (SA), simplified joint‑stock company (SAS), and limited partnerships (SCS/SCSp).
|
Vehicle |
Liability |
Capital |
Governance |
Best for |
Strengths |
Watch‑outs |
|
Sole proprietorship (EI) |
Unlimited (no asset shield) |
— |
Operated by the owner |
Freelancers, small activities |
Straightforward, low setup costs |
Personal asset exposure |
|
Sàrl |
Limited to contributions |
Capital per law; notarial deed for bylaws |
One or more managers |
SMEs, family businesses |
Proven framework, simple governance |
Transfers of shares are regulated |
|
Sàrl‑S |
Limited to contributions |
Starter‑friendly capital (specific legal framework) |
Manager(s) |
First‑time founders |
Fast access to legal personality |
Specific caps and conditions |
|
SA |
Limited to contributions |
Capital per law; negotiable securities |
Board of directors or two‑tier system |
Capital‑intensive projects, investors |
Market access, strong credibility |
More formal governance and costs |
|
SAS |
Limited to contributions |
Capital freely set; highly flexible bylaws |
President/Directors per bylaws |
Startups, JVs, fundraising |
High contractual flexibility |
Requires precise drafting |
|
SCS / SCSp |
GPs: unlimited; LPs: limited |
No statutory capital for SCSp; very flexible |
General partner/manager |
Investment platforms, PE/VC |
Significant flexibility (esp. SCSp) |
Mind the legal/tax complexity |
2) Business permit: key idea
Most commercial, craft and industrial activities require a business permit (“autorisation d’établissement”). It evidences good repute and, where applicable, professional qualifications. Once granted, its number must appear in the company’s RCS filing.
3) Eight‑step roadmap
- Select the legal form consistent with your business model, investors and risk appetite.
- Draft the bylaws. For SA, Sàrl and SCA (and SAS), the incorporation deed is executed before a notary under the law.
- Pay in the share capital as required and obtain a bank certificate where needed.
- Apply (if applicable) for the business permit — provide evidence of good repute/qualifications.
- Register with the RCS and publish the required deeds in RESA. Keep bylaws and filings up to date.
- Obtain a VAT number, set up invoicing, and register with the Direct Tax Administration for CIT/PIT as relevant.
- Affiliate with the Joint Social Security Centre (CCSS) and, when hiring, affiliate employees.
- Hiring: conclude written employment contracts no later than the employee’s start date and comply with labour rules.
4) Quick checklist
- Available company name and reservation if needed
- Final bylaws (and notarial deed where required)
- Proof of capital payment/blocking where relevant
- Business permit (where required)
- RCS registration + RESA publication
- VAT and tax registrations (number, prepayments, withholding where relevant)
- CCSS affiliation (employer, managers as applicable), insurances
- GDPR compliance, UBO register, annual accounts filing obligations
How GSL can help
GSL provides end‑to‑end support: structuring, bylaws, business permit, RCS/VAT, payroll and social obligations, accounting and reporting. Reach out for a complimentary project review.
This post is general information only and does not constitute legal or tax advice. Please seek tailored advice before making decisions.