The SARL is the default: EUR 12,000 capital, now payable in cash within twelve months for companies formed since 2 June 2026, up to 100 shareholders and a notarial deed. The SARL-S starts from EUR 1 without a notary but only for individuals, one per person, and needs a business permit. The SA needs EUR 30,000, 25% paid, and is the form for listings, public offers and more than 100 shareholders. All three pay the same tax.
Luxembourg company types: which one, and why it matters
Luxembourg has more company forms than most founders need. In practice almost every private business uses one of three: the SARL (société à responsabilité limitée, private limited company), its simplified version the SARL-S, and the SA (société anonyme, public limited company). Funds and carried-interest vehicles add the partnerships, above all the SCSp.
The good news is that the tax is the same. An SARL, a SARL-S and an SA pay corporate income tax, municipal business tax and net wealth tax on identical rules. What differs is the capital you must put in, whether a notary is needed, who may own the company, how it is managed, how freely its shares can be sold and whether it can go to the capital markets.
The rule of thumb is simple. A solo founder running a small trading or craft business, with little capital, can use the SARL-S. Almost everything else, including holdings, companies with corporate shareholders and businesses planning to raise money, belongs in an SARL. The SA is for listed companies, public bond issues, more than 100 shareholders and groups whose investors expect a board.
EUR 12,000
The default for operating companies and holdings; up to 100 shareholders.
EUR 1 to 12,000
Private deed, individuals only, one per person, permit first.
EUR 30,000
Board of directors, free share transfers, capital markets.
No minimum
Tax-transparent partnership for funds and co-investment.
SARL vs SARL-S vs SA vs SCSp: the comparison
| SARL | SARL-S | SA | SCSp | |
|---|---|---|---|---|
| Minimum capital | EUR 12,000 | EUR 1, up to EUR 12,000 | EUR 30,000, 25% paid | None |
| Paying in | At once; cash minimum within 12 months if the articles allow (since June 2026) | At once | At least 25% at once | As agreed |
| Deed | Notarial | Private deed | Notarial | Private or notarial |
| Shareholders | 1 to 100, any person | 1 to 100, individuals only | 1 or more, no maximum | At least one general and one limited partner |
| Management | One or more managers (gérants) | Individual managers | Board of at least three; one director if sole shareholder; or two-tier | General partner |
| Share transfer to outsiders | Approval of 75% of capital, can be lowered to 50% | Same as SARL | Free unless articles restrict | As the partnership agreement says |
| Public offer | Bonds only, not shares | No | Shares and bonds; can be listed | No |
| Legal personality | Yes | Yes | Yes | No |
| Tax | Corporate taxes | Corporate taxes | Corporate taxes | Transparent |
Two other forms complete the picture. The SNC (société en nom collectif) is a general partnership in which every partner is personally and jointly liable without limit; it is rarely used by international clients. The SAS, introduced in 2016, is a flexible version of the SA with the same EUR 30,000 capital and wide freedom in the articles, but it cannot offer shares to the public. The SCS and SCA are partnerships limited by shares used in fund structures.
Law and practice: Law of 10 August 1915 on commercial companies, as amended by the Law of 10 August 2016 (modernisation, SARL shareholder limit raised from 40 to 100, SAS introduced) and the Law of 23 July 2016 (SARL-S, in force since 2017); Law of 18 May 2026 on the deferred payment of the minimum capital of the SARL (Bill No. 8669), applicable to companies incorporated from 2 June 2026.
Capital, notary and the June 2026 change
SARL. The minimum capital is EUR 12,000, divided into shares (parts sociales). Until June 2026 the full amount had to be paid in before the notary would sign, which meant opening a blocked bank account first and often waiting weeks for it. Since 2 June 2026 the articles can allow the founders to pay the EUR 12,000 in cash within twelve months of incorporation. The capital must still be fully subscribed on day one, the deferral covers only cash up to the minimum, and any share premium, contributions in kind and capital above EUR 12,000 must be paid immediately. If the money is not paid within the period, the founders are liable for it.
The deed is executed by a Luxembourg notary and published in the RESA, the electronic gazette. A contribution in kind, such as shares in an existing company, does not need an auditor's report in an SARL, which makes it the usual vehicle for contributing a holding portfolio.
SARL-S. The capital is between EUR 1 and EUR 12,000. The articles can be signed as a private deed, often based on model articles from the professional chambers, with no notary. In exchange the form is narrow: only individuals can be shareholders and managers, a person can be a shareholder of only one SARL-S, and the company must obtain a business permit as part of its registration. Each year 5% of profit goes to a legal reserve until capital and reserve together reach EUR 12,000.
SA. The minimum capital is EUR 30,000, of which at least a quarter, EUR 7,500, must be paid at incorporation; the rest can be called later. Contributions in kind require a valuation report from an approved statutory auditor (réviseur d'entreprises agréé). The SA can also have an authorised capital that lets the board issue new shares within limits for up to five years.
A German founder sets up a Luxembourg SARL for an IT consultancy in September 2026. Under the old rules she would have opened a bank account, deposited EUR 12,000 and waited for the blocking certificate before the notary appointment. Under the new rules the articles provide for deferred payment: the notary incorporates the company in week one, the bank account is opened afterwards with the registered company, and she pays in the EUR 12,000 within the twelve months. Her timeline from first call to incorporation falls from about six weeks to about two.
Law and practice: Law of 10 August 1915: minimum capital of the SARL and SA, SARL-S legal reserve, contributions in kind in the SA (independent auditor report); Law of 18 May 2026 (Bill No. 8669), published on 29 May 2026.
Managers or a board, share transfers and the auditor
Management. An SARL is run by one or more managers (gérants), who may be individuals or companies and need not be shareholders or residents. Where several managers form a board of managers, the articles often split them into class A and class B, requiring one signature of each, which helps show that decisions are taken in Luxembourg. A SARL-S is managed by individuals only.
An SA has a board of directors of at least three members. Where the SA has a single shareholder, a sole director is allowed. Alternatively the SA can opt for the two-tier system of a management board supervised by a supervisory board, which some investors prefer. Directors can be companies, but each corporate director must appoint a permanent representative.
Shareholders and transfers. An SARL may have at most 100 shareholders. Shares can pass freely between existing shareholders, but a transfer to an outsider needs the approval of shareholders holding three quarters of the capital; since 2016 the articles can lower this to one half. SA shares are freely transferable unless the articles add pre-emption or approval clauses, which is why the SA suits a wide or changing shareholder base. An SARL can issue bonds, including to the public, but its shares cannot be offered to the public or listed.
Audit. An SA must appoint a supervisory auditor (commissaire aux comptes), as must an SARL with more than 60 shareholders. Any company that exceeds two of the three small-company thresholds for two consecutive years must instead have its accounts audited by an approved statutory auditor. Since a Grand-Ducal Regulation of 25 October 2024 the thresholds are a balance sheet total of EUR 7.5 million, net turnover of EUR 15 million and 50 employees. Most start-ups and holdings stay below them.
| SARL | SA | |
|---|---|---|
| Who manages | Managers, individual or corporate | Board of at least three, or one if sole shareholder, or two-tier |
| Supervisory auditor | Only above 60 shareholders | Always, unless a statutory audit applies |
| Statutory audit | Above two of: EUR 7.5m balance sheet, EUR 15m turnover, 50 employees | Same thresholds |
| Annual meeting | Required above 60 shareholders; written resolutions otherwise | Required each year |
Law and practice: Law of 10 August 1915: SARL management and the 75% transfer approval with the option to lower it to 50%; SA board composition, sole director for single-shareholder SA, two-tier system; supervisory auditor for SA and for SARL above 60 shareholders. Law of 19 December 2002 on the trade register and annual accounts, with thresholds updated by the Grand-Ducal Regulation of 25 October 2024 implementing Delegated Directive 2023/2775.
Business permit, RCS and the beneficial owner register
Business permit. Any company carrying on a commercial, craft or industrial activity, or certain liberal professions, needs a business permit (autorisation d'établissement) from the Ministry of the Economy. The form does not matter: an SARL, SARL-S or SA selling services needs one, a pure holding does not. The permit is issued to the company through a named manager, who must have professional integrity and, for crafts and some regulated trades, the required qualification or experience. The manager must have a real link with the company, and the company needs a fixed physical establishment in Luxembourg; a domiciliation address alone does not qualify.
For an SARL or SA the permit can be applied for after incorporation, but trading may only start once it is granted. For a SARL-S the permit procedure is part of registration: after the articles are signed, the business registers provide a provisional authorisation, the company registers with the RCS and the ministry then issues the final permit. Our note on the Luxembourg business permit covers documents and timing.
RCS. Every company is registered with the Trade and Companies Register (RCS), run by Luxembourg Business Registers. For an SARL and SA the notary files the deed; for a SARL-S the founders file the private deed. Filings are published in the RESA.
RBE. Within one month of incorporation, the company must register its beneficial owners in the Register of Beneficial Owners: individuals holding more than 25% of the shares or votes or otherwise in control, or failing those, the senior managers. Public access has been restricted since the 2022 judgment of the EU Court of Justice, but authorities, banks and professionals still consult it. Late or wrong filings carry fines.
Law and practice: Law of 2 September 2011 on the right of establishment (business permit), as amended; Law of 19 December 2002 on the RCS; Law of 13 January 2019 establishing the Register of Beneficial Owners; Law of 31 May 1999 on domiciliation of companies.
Same tax for every company form
Corporate income tax is 16% in 2026 on profit above EUR 200,000, plus the 7% employment fund surcharge and municipal business tax of 6.75% in Luxembourg City: 23.87% combined. Profit up to EUR 175,000 is taxed at 14% before surcharges, with a transition band in between. The government plans a further one-point cut to 15% from 2027, which would give 22.80% in Luxembourg City; the change still needs the budget law. Full figures are on our Benelux tax rates page.
Every SARL, SARL-S and SA is also subject to net wealth tax of 0.5% of its net assets up to EUR 500 million, and to a minimum net wealth tax. Since tax year 2025 the minimum depends only on the balance sheet total:
| Balance sheet total | Minimum net wealth tax |
|---|---|
| Up to EUR 350,000 | EUR 535 |
| EUR 350,001 to EUR 2 million | EUR 1,605 |
| Above EUR 2 million | EUR 4,815 |
The minimum is reduced by the corporate income tax paid for the previous year, so a profitable operating company rarely pays it on top. A holding with no taxable income usually does. A holding SARL, the SOPARFI, exempts qualifying dividends and capital gains from shareholdings of at least 10% or with an acquisition cost of at least EUR 1.2 million (EUR 6 million for capital gains) held for twelve months.
Partnerships are different. The SCSp and SCS are transparent for corporate income tax and net wealth tax: profit is taxed in the hands of the partners. They pay municipal business tax only if they carry on a genuine commercial activity, which is why they dominate fund and co-investment structures.
Law and practice: Income Tax Law (LIR), Articles 166 (participation exemption) and 174 (rates); Net Wealth Tax Law, Section 8 (minimum net wealth tax, amended from tax year 2025); Municipal Business Tax Law. Rates as published by the Luxembourg tax administration (impotsdirects.public.lu).
Which form for which purpose, with examples
- Operating company, one or a few founders, little capital: SARL-S if all owners are individuals, none already owns a SARL-S, and bank credit or investors are not needed soon. Otherwise an SARL, now with twelve months to pay the capital.
- Operating company with partners, a corporate owner or growth plans: SARL. It accepts companies as shareholders and managers, and investors know it well.
- Holding (SOPARFI): SARL in nearly every case. The SARL-S cannot hold investments as its purpose, and the SA adds cost without benefit unless capital markets are involved.
- Fund or investment vehicle: An SCSp with an SARL as general partner, or a regulated vehicle such as a RAIF or SIF in corporate or partnership form.
- Listed company, public share offer or more than 100 shareholders: SA, or an SCA where the sponsor wants to keep control.
Converting. A SARL-S converts into an SARL by a notarial deed that raises the capital to EUR 12,000 and replaces the articles; the company keeps its RCS number, contracts and permit. It is compulsory if the capital goes above EUR 12,000 or a company is to become a shareholder. An SARL can convert into an SA, and the other way round, by a notarial deed without liquidation; an SA needs an auditor's report on the net assets to confirm the EUR 30,000 capital. Plan conversions before an investment round, not during it.
Timelines. A SARL-S takes about three to six weeks, driven by the permit. An SARL or SA can be incorporated within one to two weeks once identification and documents are complete, and with deferred capital the bank account no longer blocks the deed. The business permit for an operating company usually follows within a few weeks after the file is complete.
A Luxembourg resident opening an electrician's workshop alone with EUR 5,000 of savings chooses a SARL-S with his master craftsman qualification. Two Belgian partners and their Dutch B.V. set up a software company with EUR 20,000: an SARL, since a company is among the shareholders. A family office pooling investments from 140 family members and planning a bond issue uses an SA with EUR 30,000 of capital and a board of three.
For the structures we set up, see our pages on the Luxembourg operating company and the international holding.
Which form fits your plan?
The result updates with each answer. It is a first orientation; regulated activities and funds need a closer look.
Which Luxembourg company form fits your plan?
Five questions. You see the recommended form, why, and what it requires at incorporation.
23.87% in Luxembourg City for every form in 2026.
EUR 12,000, now payable within 12 months.
Individuals only, one per person, permit first.
EUR 30,000, board, listing and public offers.
Luxembourg SARL, SARL-S and SA: frequent questions
What is the minimum capital of a Luxembourg SARL?
EUR 12,000, fully subscribed at incorporation. For companies incorporated from 2 June 2026, cash contributions up to that minimum can be paid within twelve months if the articles provide for it. Capital above EUR 12,000, any share premium and contributions in kind must be paid at once.
What is a SARL-S in Luxembourg?
The simplified private limited company, introduced in 2017. Capital is between EUR 1 and EUR 12,000, the articles are signed as a private deed without a notary, only individuals can be shareholders and managers, and a person can hold shares in only one SARL-S. It needs a business permit, so it suits trading, craft and similar activities, not holdings.
What is the minimum capital of a Luxembourg SA?
EUR 30,000, of which at least a quarter, EUR 7,500, must be paid up at incorporation. Contributions in kind need a report from an approved statutory auditor.
Is the tax different for an SARL and an SA?
No. Both pay corporate income tax, municipal business tax and net wealth tax on the same rules: 23.87% combined in Luxembourg City in 2026 and a minimum net wealth tax from EUR 535 a year. The form changes governance and cost, not the tax rate.
Can a SARL-S become an SARL?
Yes, by a shareholder resolution in front of a notary, raising the capital to at least EUR 12,000. It becomes compulsory if the capital is increased above EUR 12,000 or a company is to become a shareholder.
Can a foreigner set up a Luxembourg SARL?
Yes. There is no nationality or residence requirement for shareholders or managers, and the deed can be signed by power of attorney. An operating company needs a business permit, which requires a manager with professional integrity, relevant qualifications for some activities and a real establishment in Luxembourg.
Which form is best for a holding company?
Usually the SARL: EUR 12,000 of capital, flexible governance, up to 100 shareholders and the full participation exemption. An SA is chosen when shares or bonds will be offered to the public or the shareholder base will exceed 100.