Stock Corporation

General Information

The Société anonyme is the corporate form most widely chosen by foreign companies. It is generally favoured for the following reasons: both individuals and organisation of a different legal personality can be shareholders, they need not be residents of Luxembourg, liability limited by shares, relatively easy transfer of shares, access to stock markets.


Formation by at least two persons - individual or legal; nationality irrelevant.
Incorporation requires notarial deed followed by entry into commercial register and publication:
Notarial deed: Legal existence upon execution of the deed by the founding shareholder(s) and the notary
Registration with the Luxembourg Trade and Companies Register (Registre du Commerce et des Sociétés)
Publication in the Luxembourg Official Gazette (Mémorail C).

Duration of incorporation approximately one week.

Incorporation costs depend on share capital (at minimum share capital of
€ 31.000 notarial fees of approximately € 1.000 plus 12 % VAT, registration fees of € 145 and publication fees of € 500 - € 750 (depending on the text's length); as a general rule a capital duty of 1 % of the subscribed capital is also due).

Capitalisation and Financing

The statutory minimum share capital, which must be subscribed in full, amounts to € 31.000.
One quarter of the share capital and the entire premium, if any, must be paid up at time of incorporation.

Board Structure

An S.A. is managed and represented in and out of court by a board of directors, consisting of at least three members appointed for a period not exceeding six years. The directors can be corporate entities or individuals. The question of joint or individual power of representation can and must be decided upon by the founders and laid down in the articles of incorp.
Day-to-day management may be delegated to to one or several directors, managers or other agents.

Shareholders' decisions are made by way of shareholders' resolutions taken at the general meeting, which must be held at least once a year. In addition, shareholders holding at least one-twentieth of the share capital have the right to call an extraordinary general meeting.

The auditing of the S.A. business must be carried out by one or more statutory auditors.

Luxembourg company law does not generally provide for employee participation (exceptions: e.g. workforce in Luxembourg exceeds 1.000).

Annual Costs

related to filings and publications.

Corporate Taxation and Financial Reporting

Resident companies are subject to corporate income tax on worldwide income. Top corporate tax rate is 22 % as basic rate, plus municipal business tax, plus 4 % surcharge on payable tax amount as contribution to unemployment fund, amounting to total maximum rate of 30 %. Substantial tax reductions for newly established businesses.

Annual accounts must be drawn up within six months of the end of the financial year. Accounts must consist of balance sheet, profit and loss statement and annex. Accounting must be done in accordance with Luxembourg GAAP.

Employee Participation in Corporate Bodies

Only if company has more than 1,000 employees in Luxembourg, if state holds a participation of at least 25 %, or if company has been granted government concession.