Luxembourg Country Profile business trade issues

Luxembourg

DOING BUSINESS

Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

The government, in Luxembourg, has implemented a number of financial, tax or social incentives in order to attract foreign investors.
Subsidies are granted to small and medium-sized companies through the National Investment Credit Company (SNCI) for retail companies, restaurants or hotels. Furthermore, new businesses or companies creating new activities benefit from a tax exemption on the communities income tax (IRC) as well as a commercial tax exemption up to 25% for 8 years. Investors should contact IDELUX, the Economic Development Agency, in order to get further information on investment opportunities.

Legal forms of companies

Form	Number of partners/shareholders	Minimum and/or maximum capital	Liability	Registration fee	Release of financial documents
Private Limited Company	Minimum 2 partners Maximum 40 partners NB: 1 member for a sole proprietorship.	12,500 € totaly subscribed	Liability is limited to the amount contributed.	1% of the capital amount.	Yes
Public Limited Company	Minimum 2 shareholders.	31,000 € with 1/4 released at the creation.	Liability is limited to the amount contributed.	1% of the capital amount.	Yes
General Partnership.	Minimum 2 partners.	No minimum capital.	Partners' liability is joint and several on obligations and debts of the company.		No
Limited Partnership.	Minimum 2 partners. Two types of partners: active partners and sleeping partners.	No minimum capital.	Active partners' liability is joint and several. Liability of sleeping partners is limited to the amount contributed.		No
Cooperative Company	Minimum 7 partners	No minimum capital	Partners' liability is joint and several or divided, unlimited or limited to amount contributed depending on the status.		No

Registration and licensing procedures
Articles of incorporation for companies are laid down in a notorized deed, which has to be registered and filled with the Luxembourg Formanity Center of the Chamber of Commerce and published in the official gazette. Further information is provided by the leguichet.org website.

Foreign exchange control
As for currency exchange control, limitations are under the responsibility of the Belgium and Luxembourg Institute of Exchange (IBLC). There are no exchange controls between Belgium and Luxembourg. Free repatriation of profits and capital is carried out with no limitations from the IBLC.

Regulations concerning equity investment
A majority holding interest in the capital of a local company is legal in Luxembourg.

Foreign Direct Investment inflows in Luxembourg

FDI inflows	2003	2004	2005	World rank (*) 2005
FDI inflows (USD million)	3 943	3 958	3 685	6/141

Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

Last modified in 2006 - ongoing update