Company Formation Survey 2008


	Home ANGUILLA ANTIGUA ARUBA BAHAMAS BARBADOS BELIZE BERMUDA BRITISH VIRGIN ISLANDS BRUNEI CAYMAN ISLANDS COOK ISLANDS CYPRUS ENGLAND & WALES GIBRALTAR GUERNSEY HONG KONG HUNGARY IRELAND ISLE OF MAN JERSEY LABUAN LIBERIA LUXEMBOURG MADEIRA MALTA MARSHALL ISLANDS MAURITIUS NEVIS PANAMA ST. KITTS ST. LUCIA ST. VINCENT AND THE GRENADINES SAMOA SÃO TOMÉ E PRÍNCIPE SEYCHELLES SINGAPORE SWEDEN SWITZERLAND TURKS & CAICOS VANUATU


		1. Company law	Law of 10 August 1915, as amended, Law of 19 December 2002; Article 1832 et seq. of the Civil Code; Law of 22 March 2004 on securitisation; Law of 15 June 2004 in respect of the investment company in risk capital (SICAR); Law of 5 August 2005 on financial collateral arrangements; Law of 19 May 2006 implementing the European directive on takeover bids; Law of 19 May 2006 on market abuse; Law of 25 August 2006 concerning the European Company; Law of 23 March 2007 introducing substantial changes to the Luxembourg merger and demerger regime; Law of 11 January 2008 concerning transparency requirements for issuers of securities.
		2. Types of company:	Corporations (sociétés anonymes – SA and société européenne - SE); private limited liability companies (sociétés à responsabilité limitée – SàRL); partnerships limited by shares (sociétés en commandite par actions - SCA); partnerships (sociétés en nom collectif - SNC); limited partnerships (sociétés en commandite simple - SCS); co-operative companies (sociétés coopératives - Scoop); civil law companies (sociétés civiles - SC); economic interest grouping (groupements d'intérêt économique - GIE); European Economic interest grouping (groupement d'intérêt économique européen – GEIE.
		(a) type of company preferred for international transactions:	SA, SàRL and SCA.
		(b) shareless companies:	SNC and SCS.
		3. Capital requirements:	The share capital of all companies (except the SNC and SCS for which there are no minimal capital requirements) is divided into shares or units. SA: EUR31,000 (25% must be paid-in at the incorporation); SE: EUR120,000 (25% must be paid-in at the incorporation); SàRL: EUR12,500 to be fully paid-in upon subscription; SCA: EUR31,000 (25% must be paid-in at the incorporation); SICAR: if SàRL: EUR12,500 or if SA or SCA: EUR31,000 of which at least 5% must be paid-in at the incorporation. The share capital must reach EUR1,000,000 within 12 months from the registration of the SICAR with the Commission de Surveillance du Secteur Financier.
		4. Costs to incorporate, excluding government fees:	With respect to SA (with a one tier structure), SàRL and SCA approximately, EUR3,500 for basic articles of association including legal counsel's fees and notary fees (which vary upon the amount of the share capital and premium) for a company with a minimum capital.
		5. Fees paid to authorities to incorporate:	0.5% capital duty. Exemptions for share exchanges, contribution of one or several branches of activity, mergers. The costs with respect to the publication of the company's articles of association in the Luxembourg Official Gazette vary upon the length of the text. Exceptions for certain types of companies (e.g. SICARs).
		6. Annual fees paid to authorities:	0.2% of commercial profits realised in a given year (minimum EUR70).
		7. Taxation rates applied to companies generally:	29.63% (City of Luxembourg).
		(a) the taxation of companies in 2 (a)	A fully taxable limited liability company which benefits from the parent-subsidiary regime (the so-called SOPARFI) is exempt from corporation taxes on capital gains realised on and dividends received from a qualifying participation of at least 10% (or where the acquisition cost is at least EUR1,200,000 for the exemption on dividends and EUR6,000,000 for the exemption on capital gains) held for at least 12 months in a Luxembourg resident limited company, an EC resident company listed in article 2 of the EC parent-subsidiary directive or any other non-resident limited fully taxable company (taxable in accordance to principles similar to those applicable in Luxembourg and at a minimum rate of 11%).
		8. Method of incorporation:	SAs, SEs, SàRLs and SCAs are incorporated by their shareholders, or their agents, in front of a notary. The articles of association must be registered and filed with the Luxembourg trade and companies register and published in the Luxembourg Official Gazette. Contrary to the other forms of companies in Luxembourg who acquire legal personality upon the signing of the notarial deed incorporating the company, SEs only acquire legal personality upon their registration with the Luxembourg trade and companies register.
		9. Who may incorporate - specify what, if any, local representatives/ professionals required?	Lawyers, accountants, domiciliation agents or any duly appointed agent generally.
		Are ready made companies available?	Given the fast and easy process to incorporate a new company, the market for shelf companies is minute.
		10. Length of time to incorporate:	Basically within 24 hours of (i) the company's capital being deposited in a bank account, (ii) the articles of association being in agreed form (notwithstanding know your customer and anti-money laundering formalities being completed).
		11. Minimum members:	SA and SE: one (no maximum); SàRL: one (maximum of 40); SCA: three (one or more general partners and at least two limited partners); no nationality or residence requirements. May be physical persons or legal entities.
		12. Registered office: Can the registered office be a bank/ lawyer/ accountant's office (brass plate)?	The registered office can be with a bank, lawyer, trust management company, accountant office. Taking into consideration that a company will qualify as a Luxembourg company if its central administration is located in Luxembourg, the decision-making process must be localised in Luxembourg.
		13. Directors and secretary:	Directors/managers must be appointed to manage the company and a secretary may be appointed on a voluntary basis (i.e. not a legal requirement).
		(a) Must a director/ secretary be resident?	No, although a majority of the directors should ideally be resident for substance (i.e. tax residency) purposes.
		(b) Are Corporate Directors allowed?	Yes (in this case, a permanent representative must be appointed).
		(c) Are two tier structure allowed?	It is important to note that a two-tier structure is permitted - in a SA or a SE a two-tier structure (the management board plus the supervisory board) may constitute an alternative to the board of directors. SCAs also enjoy a two tier structure.
		14. Appointee directors/ secretary possible?	Yes. SAs, SàRLs and SCAs are not required under Luxembourg law to have a secretary. Luxembourg resident appointee directors and secretary may be provided. It must be noted that appointee directors are subject to the same liability as any other directors.
		15. Amount of fees payable to appointee directors/ secretary:	Approximately EUR1,500 to EUR2,500 for corporate directors and for physical persons, per year and per person. Such fees may vary significantly depending on the experience of the appointee, the risks involved with the mandate, the number of meetings to be held per year and the daily requirements.
		16. Meetings:	SAs and SCAs must hold an AGM in the municipality of their registered office at the day and hour indicated in their articles of incorporation. For SàRLs, no AGM is required where there are less than 25 shareholders. In such case the annual meeting may be held by a resolution in writing of the shareholders.
		17. Annual return:	Yes. The financial statements for a non-listed company must be prepared within six months from the closing of the business year. If a company is listed on an EEA regulated market, the financial statements must be prepared within four months from the closing of the business year. In both cases, the financial statements must be filed with the Luxembourg trade and companies register.
		Must financial statements of a company be audited?	The financial statements of SAs, SCAs, and SàRLs with more than 25 shareholders, must be audited. Furthermore, large companies in accounting terms and regulated companies must have an external auditor (réviseur d'entreprises).
		18. Is disclosure of profits required by filing balance sheets with annual returns?	Financial statements (including the P&L account indicating the company's results) must be filed with the Luxembourg trade and companies register. SAs, SàRLs and SCAs must also publish a statement indicating the use and allocation of the net profits in accordance with the resolutions of the general meeting.
		19. Are there any exchange control or other financial restraints imposed upon a company?	None. International payments are reported to the Statec (Central Service for Statistics and Economic Studies) for statistical purposes only.
		20. Companies formed in the last year:	Information unavailable.
		21. Number of companies on the company register altogether:	Information unavailable, but probably in excess of 100,000.
		22. How, if any, is migration into and out of the jurisdiction achieved?	Migration into Luxembourg: if law of foreign company permits, transfer of the place of effective management of foreign companies to Luxembourg and adaptation of their articles of association to Luxembourg law. Luxembourg corporate law accepts the migration to Luxembourg. Migration out of Luxembourg for SAs, SàRLs and SCAs (if foreign law accepts migration): change of nationality of the company to be resolved by a unanimous shareholders' resolution. The migration of an SE into and out of Luxembourg is governed by the law. Migration of an SE out of Luxembourg: required quorum and voting majority are the same as for a change to the articles of association of such SE.
		23. Is migration out of your country provided for?	Yes.
		24. Any amendments to company law over the last 12 months:	Law of 23 March 2007 introducing substantial changes to the Luxembourg merger and demerger regime, enabling the mergers and demergers of de jure Luxembourg companies (SA, SàRL, SCA, SNC, SCS, Scoop, GIE and SC) subject to specific insolvency proceeding; Law of 11 January 2008 on transparency requirements for issuers of securities.
		25. Anticipated amendments to company law over the next 12 months:	Preventive measures in respect of bankruptcies and prevention of organised bankruptcies; amendment to law on takeover bids; modernisation of the law on commercial companies; protection of minority shareholders and obligation to organise takeover bids; cross-border mergers of limited liability companies, simplification of the formation of public limited liability companies and the maintenance and alteration of their capital.
S I T E M A P BACK TO TOP			Compiled by Allen & Overy