{"id":1312,"date":"2025-11-14T10:09:08","date_gmt":"2025-11-14T10:09:08","guid":{"rendered":"https:\/\/www.gsl.lu\/?p=1312"},"modified":"2025-11-14T10:15:39","modified_gmt":"2025-11-14T10:15:39","slug":"choosing-the-right-business-form-in-luxembourg-setting-up-a-company","status":"publish","type":"post","link":"https:\/\/www.gsl.lu\/en\/choosing-the-right-business-form-in-luxembourg-setting-up-a-company\/","title":{"rendered":"Setting up a business in Luxembourg: choosing the right vehicle and securing the business permit"},"content":{"rendered":"
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Hesitating between a sole proprietorship, S\u00e0rl\/S\u00e0rl\u2011S, 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.<\/p>\n

1) Pick the right vehicle<\/b><\/h3>\n

Under Luxembourg company law, commonly used vehicles include: sole proprietorship (EI), private limited liability company (S\u00e0rl), simplified private limited liability company (S\u00e0rl\u2011S), public limited company (SA), simplified joint\u2011stock company (SAS), and limited partnerships (SCS\/SCSp).<\/p>\n\n\n\n\n\n\n\n\n\n
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Vehicle<\/b><\/b><\/p>\n<\/td>\n

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Liability<\/b><\/b><\/p>\n<\/td>\n

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Capital<\/b><\/b><\/p>\n<\/td>\n

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Governance<\/b><\/b><\/p>\n<\/td>\n

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Best for<\/b><\/b><\/p>\n<\/td>\n

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Strengths<\/b><\/b><\/p>\n<\/td>\n

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Watch\u2011outs<\/b><\/b><\/p>\n<\/td>\n<\/tr>\n

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Sole proprietorship (EI)<\/b><\/b><\/p>\n<\/td>\n

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Unlimited (no asset shield)<\/p>\n<\/td>\n

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\u2014<\/p>\n<\/td>\n

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Operated by the owner<\/p>\n<\/td>\n

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Freelancers, small activities<\/p>\n<\/td>\n

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Straightforward, low setup costs<\/p>\n<\/td>\n

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Personal asset exposure<\/p>\n<\/td>\n<\/tr>\n

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S\u00e0rl<\/b><\/b><\/p>\n<\/td>\n

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Limited to contributions<\/p>\n<\/td>\n

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Capital per law; notarial deed for bylaws<\/p>\n<\/td>\n

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One or more managers<\/p>\n<\/td>\n

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SMEs, family businesses<\/p>\n<\/td>\n

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Proven framework, simple governance<\/p>\n<\/td>\n

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Transfers of shares are regulated<\/p>\n<\/td>\n<\/tr>\n

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S\u00e0rl\u2011S<\/b><\/b><\/p>\n<\/td>\n

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Limited to contributions<\/p>\n<\/td>\n

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Starter\u2011friendly capital (specific legal framework)<\/p>\n<\/td>\n

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Manager(s)<\/p>\n<\/td>\n

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First\u2011time founders<\/p>\n<\/td>\n

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Fast access to legal personality<\/p>\n<\/td>\n

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Specific caps and conditions<\/p>\n<\/td>\n<\/tr>\n

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SA<\/b><\/b><\/p>\n<\/td>\n

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Limited to contributions<\/p>\n<\/td>\n

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Capital per law; negotiable securities<\/p>\n<\/td>\n

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Board of directors or two\u2011tier system<\/p>\n<\/td>\n

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Capital\u2011intensive projects, investors<\/p>\n<\/td>\n

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Market access, strong credibility<\/p>\n<\/td>\n

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More formal governance and costs<\/p>\n<\/td>\n<\/tr>\n

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SAS<\/b><\/b><\/p>\n<\/td>\n

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Limited to contributions<\/p>\n<\/td>\n

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Capital freely set; highly flexible bylaws<\/p>\n<\/td>\n

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President\/Directors per bylaws<\/p>\n<\/td>\n

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Startups, JVs, fundraising<\/p>\n<\/td>\n

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High contractual flexibility<\/p>\n<\/td>\n

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Requires precise drafting<\/p>\n<\/td>\n<\/tr>\n

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SCS \/ SCSp<\/b><\/b><\/p>\n<\/td>\n

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GPs: unlimited; LPs: limited<\/p>\n<\/td>\n

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No statutory capital for SCSp; very flexible<\/p>\n<\/td>\n

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General partner\/manager<\/p>\n<\/td>\n

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Investment platforms, PE\/VC<\/p>\n<\/td>\n

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Significant flexibility (esp. SCSp)<\/p>\n<\/td>\n

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Mind the legal\/tax complexity<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

2) Business permit: key idea<\/b><\/h3>\n

Most commercial, craft and industrial activities require a business permit (\u201cautorisation d\u2019\u00e9tablissement\u201d). It evidences good repute and, where applicable, professional qualifications. Once granted, its number must appear in the company\u2019s RCS filing.<\/p>\n

3) Eight\u2011step roadmap<\/b><\/h3>\n
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  1. Select the legal form consistent with your business model, investors and risk appetite.<\/li>\n
  2. Draft the bylaws. For SA, S\u00e0rl and SCA (and SAS), the incorporation deed is executed before a notary under the law.<\/li>\n
  3. Pay in the share capital as required and obtain a bank certificate where needed.<\/li>\n
  4. Apply (if applicable) for the business permit \u2014 provide evidence of good repute\/qualifications.<\/li>\n
  5. Register with the RCS and publish the required deeds in RESA. Keep bylaws and filings up to date.<\/li>\n
  6. Obtain a VAT number, set up invoicing, and register with the Direct Tax Administration for CIT\/PIT as relevant.<\/li>\n
  7. Affiliate with the Joint Social Security Centre (CCSS) and, when hiring, affiliate employees.<\/li>\n
  8. Hiring: conclude written employment contracts no later than the employee\u2019s start date and comply with labour rules.<\/li>\n<\/ol>\n

    4) Quick checklist<\/b><\/h3>\n