Types of Companies in Luxembourg: Which Legal Form Fits You?

There are nine types of companies in Luxembourg with their own legal personality under the law of 10 August 1915, and, Guichet.lu says, the private limited liability company (SARL) is the most common. Starting alone, you compare four: a sole proprietorship (not a company), a SARL, a simplified SARL (SARL-S) or a public limited company (SA). Liability, capital and the notary decide.

Which types of companies exist in Luxembourg?

The law of 10 August 1915 recognises nine company forms with legal personality, among them the SARL, the SARL-S and the SA; a sole proprietorship is not one, because no legal person is created.

Article 100-2 of the law of 10 August 1915 on commercial companies lists them: the société en nom collectif (SENC), the société en commandite simple (SCS), the SA and the société par actions simplifiée (SAS), the société en commandite par actions (SCA), the SARL and the SARL-S, the cooperative society and the European company (SE). Each is, in the law’s words, a legal entity distinct from its partners or shareholders; the société en commandite spéciale (SCSp) it also names is not.

Of the nine company forms, Guichet.lu’s page on the SARL calls the SARL the most common form, and its page on the SA counts the SA with it as the most widespread; with the SARL-S and the sole proprietorship, they are the four compared here:

Guichet.lu’s page on the sole proprietorship says it needs no minimum capital, creates no legal person and leaves its owner liable without limit on their personal assets, while a partner in a SARL or SARL-S commits only a fixed contribution (art. 710-1). The guides on choosing a legal form take the sole proprietorship and the SARL-S further.

What does SARL stand for, and what is it in German?

SARL stands for société à responsabilité limitée, a private limited liability company; Guichet.lu’s German pages call it Gesellschaft mit beschränkter Haftung, comparable to the German GmbH but not identical. A SARL’s partners risk only their contribution, and its shares cannot be freely transferred (art. 710-1).

Guichet.lu’s German page on the SARL makes the comparison with the GmbH, and its comparison of capital companies warns that the forms do not match one to one.

The 1915 law fixes the spelling: a SARL prints the words in full or the abbreviation SARL immediately before or after its name (art. 710-10), a SARL-S follows its name with SARL-S (art. 720-5), and an SA uses SA (art. 462-1). The dotted S.à r.l. still appears, for one on the affiliation page of the CCSS, the Centre commun de la sécurité sociale, but the law’s own abbreviation is SARL.

Sole proprietorship: you are the business

In a sole proprietorship you trade in your own name: no capital, no company to form, but you answer for every business debt with your personal assets.

To start:

• take the business permit, if your activity needs one;
• declare your activity to the CCSS within 8 days, as the CCSS requires;
• declare the start of your activity to the AED (Administration de l’enregistrement, des domaines et de la TVA) under article 62 of the VAT law;
• register with the trade register (RCS) if you are a sole trader, a sole proprietor whose activity is commercial, as articles 1 and 3 of the RCS law require; article 1’s list holds no liberal profession.

A sole trader is not in the register of beneficial owners (RBE), which the law of 13 January 2019 keeps for the companies and other entities on the RCS. The guide to the sole proprietorship weighs its advantages and drawbacks.

SARL: €12,000 of capital and a notary

A SARL needs €12,000 of share capital, a notarial deed and 1 to 100 partners, and each partner risks only their contribution.

Article 710-5 of the 1915 law sets the minimum capital. Since 2 June 2026, article 710-6 lets the shares be paid up within 12 months of formation, unless the articles set a shorter time; the capital is still subscribed in full, and any amount above the minimum and every contribution in kind are paid in full at formation. Only a notarial deed forms a SARL (art. 100-4), and the notary checks that the capital is subscribed in full and what is paid up at formation (art. 710-6).

A SARL can have a single partner, at formation or later (art. 710-1), which makes it a single-member SARL (société unipersonnelle), and at most 100 (art. 710-4). Guichet.lu adds that the partners, and the manager, the gérant, may be natural or legal persons, and that each partner is liable up to their share of the capital.

The SARL then registers with the trade register (RCS) and declares its beneficial owners in the RBE, as article 3 of the RBE law requires. Its filings appear in the RESA, the electronic gazette that replaced the Mémorial on 1 June 2016 under the law of 27 May 2016; Guichet.lu’s page on RESA publication says publication there is free.

SARL-S: a SARL for natural persons, without a notary

A SARL-S is a SARL for natural persons only, with €1 to €12,000 of capital, and may be formed by private deed without a notary.

The law of 23 July 2016 created the SARL-S, in force since 16 January 2017. Under the 1915 law, its partners and gérants must be natural persons (art. 720-2, 720-6), and one person may be a partner in only one SARL-S at a time, unless the shares come to them on a death. Guichet.lu’s page on the SARL-S adds that, like a SARL, it has 1 to 100 partners, and that it must change form once its capital passes €12,000.

A SARL-S’s cash contributions may be paid up within 12 months (art. 720-4).

Article 720-3 of the 1915 law requires a SARL-S’s activity to fall within the law of 2 September 2011, which covers commerce, craft, industry and certain liberal professions, the architect’s among them. The guide to the SARL-S covers its setup and its limits.

SA: €30,000 of capital and a board

An SA needs €30,000 of capital, at least a quarter of each share paid at formation, a notarial deed and one shareholder or more.

Article 420-1 of the 1915 law sets the SA’s capital, subscribed in full, and the quarter paid up; article 100-4 requires the notarial deed. The board has at least three directors, or one when a single shareholder forms the company (art. 441-2), unless the articles choose a management board and a supervisory board instead (art. 442-1).

What does each form cost to set up, and how long does it take?

Authorities publish fees, not totals: €50 for the business permit, €14.61 to €105.91 excluding VAT for the RCS, €12 per document filed, and a scale, set by grand-ducal regulation, for the notary a SARL or SA needs.

Guichet.lu’s page on the business permit sets the permit’s fee at €50, and the LBR’s tariffs set the RCS fee by form, before 17% VAT, plus €12 per document filed:

Without paid help, a SARL-S’s published fees come to about €97: €50 for the permit, €17.09 for the RCS, €17.55 for the RBE under the LBR’s RBE tariffs, both with VAT, and €12 for one document.

The permit took 6.62 days on average in 2025, the government reported, and Guichet.lu says a complete file is in principle handled within three months; the RCS law gives the register three working days to record an accepted filing (art. 21). The notary’s fee follows the scale of the grand-ducal regulation of 24 July 1971, a share of the contributions; Guichet.lu’s page on the SARL lists notary fees among the costs without an amount, and no official page we read gives a total timeline, so this guide gives neither.

What does limited liability not protect you from?

Limited liability shields the partners, not a manager who fails the company’s duties: a gérant at fault answers personally, beside the company, for the tax and VAT lost.

Under § 109 (1) of the Abgabenordnung, the general tax law, a company’s representatives are personally liable beside it where a culpable breach of their duties, such as seeing that taxes are paid (§ 103), cut tax short. Article 67-2 of the VAT law makes gérants personally and jointly liable for VAT left unpaid through a faulty failure of their legal duties.

Toward the company, a gérant also answers under ordinary law for faults in management (1915 law, art. 710-16 and 441-9); a SARL-S’s gérant answers in the same way (art. 720-1).

How is each form taxed, and which books does it keep?

A sole proprietor’s profit is taxed with their personal income, while a SARL, SARL-S or SA pays company taxes: 23.87% combined in Luxembourg City on profit above €200,000, from tax year 2025.

A sole proprietor pays personal income tax on the profit and, in a trade or a craft, the ICC above an allowance of €40,000, against €17,500 for a company, as the tax administration, the ACD (Administration des contributions directes), sets out on its page on the ICC.

A company pays corporate income tax (IRC), and a SARL’s partners or an SA’s shareholders are taxed only when profit is distributed, Guichet.lu’s comparison says. The ACD’s table of the overall tax burden puts the burden together at 23.87% in Luxembourg City from tax year 2025: 16% IRC on profit above €200,000, the 1.12% employment-fund surcharge and 6.75% ICC.

The minimum net wealth tax is €535, €1,605 or €4,815 by balance-sheet total, reduced by the previous year’s IRC and surcharge, under the ACD’s tariff for companies.

Of the four forms, only a sole trader whose last year’s turnover excluding VAT is at most €100,000 may keep simplified accounting, under article 13 of the Code de commerce, as the ACD’s circular on bookkeeping duties explains. The circular adds that, for tax, full (double-entry) accounting starts in the financial year after the tax assessment for a year above €100,000 arrives, liberal professions included. A company files its annual accounts at the latest seven months after its year-end (RCS law, art. 75).

Which form fits you if you start alone?

Which form fits depends on what you risk and what you do. If a debt could outgrow what you are ready to lose, a SARL or SARL-S caps it at your contribution; if your activity is outside the business-permit law, the SARL-S is closed to you.

Weigh three things:

• What you risk. A SARL or SARL-S shields what you own, but not a gérant at fault from tax and VAT.
• What you put in. From no capital for a sole proprietorship to €30,000 and a notary for an SA.
• Your social security. The CCSS affiliates as self-employed a gérant who holds the business permit and more than 25% of a SARL’s shares.

None of these choices is final: a sole trader may set up a company to carry on the activity, and a SARL may change form by its partners’ decision, Guichet.lu says. Whether your profit and your risk call for a company is weighed in sole proprietorship vs SARL.

The business permit is separate from the legal form. Articles 1 and 4 of the law of 2 September 2011 require it for a regulated activity practised independently, alone or through a company. A company applies for its own: Guichet.lu says the permit is issued to the business and becomes final once the articles are registered with the RCS. The four criteria for a business permit set out what it asks.

Frequently asked questions

What types of companies are there in Luxembourg?

The law of 10 August 1915 recognises nine companies with legal personality, among them the SARL, the SARL-S and the SA, and Guichet.lu calls the SARL the most common. Starting alone, you compare those three with the sole proprietorship, which is not a company: liability, minimum capital and the notary decide between them.

What does SARL stand for, and what is it in German?

SARL stands for société à responsabilité limitée, a private limited liability company whose partners risk only their contribution. Guichet.lu's German pages call it Gesellschaft mit beschränkter Haftung and describe it as comparable with the German GmbH, while warning that the Luxembourg and German forms do not match one to one.

Is it written SARL or S.à r.l.?

The law of 10 August 1915 sets the abbreviation SARL: a company prints it, or the words in full, immediately before or after its name. The simplified form writes SARL-S and a public limited company SA. The dotted spelling S.à r.l. is still in use, by the CCSS among others, but the law's own abbreviation is SARL.

Do I need a notary and €12,000 to form a company?

For a SARL, yes: €12,000 of share capital and a notarial deed, and since 2 June 2026 the shares may be paid up within 12 months. An SA needs a notary and €30,000. A SARL-S needs neither: its capital is €1 to €12,000, and a private deed is enough.

Which legal form suits one person starting alone?

It depends on what you risk and what you do. A sole proprietorship needs no capital, but you answer for its debts with everything you own. A SARL or SARL-S limits your risk to your contribution, though a gérant at fault still answers for tax and VAT. A SARL-S takes only activities under the business-permit law.

Can I change legal form later?

Yes. A sole trader may set up a company to carry on the activity, and a SARL may change form by its partners' decision, Guichet.lu says. A SARL-S whose capital passes €12,000 must change form. None of these choices is final, so the form that fits today need not fit forever.