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EU financial center for holding companies and investment funds
Region
WESTERN EUROPE
Corporate Tax
23.87%
Setup Time
1 weeks
Currency
EUR
Luxembourg, a founding EU member between Belgium, France, and Germany, has developed into a premier financial center. The country's sophisticated company registration and favorable holding company regime support substantial business setup.
With a population of 660,000 (high immigrant percentage), Luxembourg offers cosmopolitan living with multilingual character. Luxembourgish, French, and German are official, with English common in finance. The climate is temperate.
Healthcare is excellent through mandatory insurance. Safety is outstanding. The cost of living is high, with housing particularly expensive given limited space.
The international character and EU institutional presence create diverse community.
Corporate tax combined with municipal tax creates effective rates around 24% in Luxembourg City. Extensive participation exemptions provide tax-free dividends and capital gains on qualifying holdings. Personal income tax reaches 42%.
Luxembourg uses the Euro. The economy depends heavily on financial services, investment funds, and EU institutions. The holding company and fund regimes attract substantial structuring activity.
Company registration through the Trade Register requires notarial deed for most structures. The S.à r.l. (SARL, limited liability company) and S.A. (stock corporation) are common. SOPARFI holding companies benefit from participation exemptions.
Company formation takes approximately 1-2 weeks. Minimum capital is EUR 12,000 for SARL. Annual compliance includes audited accounts for larger companies.
The Commission de Surveillance du Secteur Financier (CSSF) oversees financial services including crypto. Registration for virtual asset service providers is required. Luxembourg follows EU developments closely.
Gambling is regulated but Luxembourg has not developed extensive online gambling licensing. The small domestic market limits gaming opportunities.
High operating costs mean Luxembourg suits high-value financial services rather than operational businesses. Residential availability is constrained. Professional services are expensive but sophisticated.
Banking access is excellent through major international banks. Professional services are world-class for fund administration and holding companies.
Luxembourg suits investment funds, holding company structures, and EU financial services headquarters for their business setup.
Local: Sàrl
Local: SA
Local: Foundation
Local: SCS
Local: Branch
| Corporate Tax Rate | 23.87% |
| Personal Income Tax Rate | 42% |
| VAT / Sales Tax | 17% |
| Capital Gains Tax | 42% |
| Withholding Tax | 15% |
| Reduced Corporate Tax Available | Yes |
| Non-Resident Withholding Exempt | Yes |
| Tax Treaty Network | Yes |
| Banking Access | HIGH |
| Financial Privacy | MEDIUM |
| Currency Controls | NONE |
| Local Bank Account Required | No |
| Non-Resident Bank Account Allowed | Yes |
| Physical Presence for Banking | No |
| Banks Restrictive (High Risk) | No |
| AML Officer Required | Yes |
| MLRO Required | Yes |
| Compliance Officer Required | Yes |
| Data Protection Officer Required | Yes |
| Bookkeeping Frequency | Annual |
| Local Bookkeeping Required | Yes |
| Mandatory Audit | Yes |
| License Required | Yes |
| Local Director Required | No |
| Local AML Director Required | Yes |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $150,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | EU Travel Rule / MiCA compliant |
| Business Plan Required | Comprehensive business plan with 3-year projections, governance structure, IT security, risk management framework required |
| Personnel Required | CEO, AML/CFT Officer, Compliance Officer, fit and proper management with relevant experience |
| Insurance Required | No |
| Remote Incorporation Possible | Yes |
| 100% Foreign Ownership | Yes |
| Min. Shareholders | 1 |
| Min. Directors | 1 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | CSSF maintains public register of authorized CASPs |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | No |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | No |
| Capital Gains Tax Applicable | No |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | Commission de Surveillance du Secteur Financier (CSSF) |
| Licensing Fee | $10,000 |
| Licensing Fee Details | CASP application fee starting at €10,000; annual supervision fees based on revenue and activities |
| Permitted Business Models | Exchange, Custody, Trading Platform, Transfer Services, Portfolio Management, Advisory |
| Permitted Activities | Crypto-to-fiat exchange, Crypto-to-crypto exchange, Custody and administration, Order execution, Investment advice, Portfolio management |
| Restricted Activities | Stablecoin (EMT/ART) issuance requires additional authorization under MiCA |
| Cross-Border Service Allowed | Yes |
| Physical Inspection Required | No |
| Derivatives Allowed | Yes |
| RWA Tokenization Allowed | Yes |
| App Store Listing Allowed | Yes |
| Crypto Custody Allowed | Yes |
| License Required | Yes |
| Local Director Required | No |
| Local AML Director Required | No |
| Local Legal Address Required | Yes |
| Local Physical Office Required | No |
| Capital Maintained in Account | No |
| Compliance Program Required | Yes |
| Travel Rule Compliance | AML/CFT compliance required |
| Business Plan Required | Business plan for licensed operators |
| Personnel Required | Qualified management team required |
| Insurance Required | No |
| Remote Incorporation Possible | No |
| 100% Foreign Ownership | Yes |
| Min. Shareholders | 1 |
| Min. Directors | 1 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | Ministry of Justice maintains operator records |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | No |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | Yes |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | Ministry of Justice, Loterie Nationale |
| Licensing Fee Details | State monopoly - no private licensing fees as private operators not permitted |
| Permitted Business Models | State Monopoly: Casino 2000 (land-based), Loterie Nationale (lottery, sports betting) |
| Permitted Activities | Land-based casino (Casino 2000 only), Lottery, Sports betting via Loterie Nationale |
| Restricted Activities | Private gambling operators not permitted. State monopoly system only. Online gambling in grey area. |
| Cross-Border Service Allowed | No |
| Physical Inspection Required | No |
| Player Fund Segregation | Yes |
| B2B/B2C Separate Requirements | No |
| License Required | Yes |
| Local Director Required | No |
| Local AML Director Required | Yes |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $125,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | FATF compliant / PSD2 / EU Transfer of Funds Regulation |
| Business Plan Required | 3-year business plan with financial projections, risk management framework, governance structure, outsourcing arrangements |
| Personnel Required | CEO, CFO, AML Officer, Compliance Officer, minimum 2 directors with relevant experience |
| Insurance Required | Yes |
| Insurance Details | Professional indemnity insurance required for payment services |
| Remote Incorporation Possible | No |
| 100% Foreign Ownership | Yes |
| Min. Shareholders | 1 |
| Min. Directors | 2 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | CSSF maintains public register of payment institutions |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | No |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | No |
| Capital Gains Tax Applicable | No |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | Commission de Surveillance du Secteur Financier (CSSF) |
| Licensing Fee | $5,000 |
| Licensing Fee Details | PI application fee €5,000; EMI €10,000; annual supervision fees based on transaction volumes and activities |
| Permitted Business Models | EMI, PI, AISP, PISP |
| Permitted Activities | Electronic money issuance, Payment services, Money transfers, Card issuing, Payment initiation (PISP), Account information (AISP) |
| Restricted Activities | Banking activities require separate credit institution license |
| Cross-Border Service Allowed | Yes |
| Physical Inspection Required | Yes |