Choose the SARL-S only if you are one or a few individuals starting a trading, service or craft business with little capital and no need for bank credit or investors soon. For anything else, including holdings, corporate shareholders and investor plans, the S.à r.l. is the answer, and since June 2026 its EUR 12,000 can be paid within twelve months. Taxes are identical.
Two versions of the same limited company
Luxembourg offers two forms of private limited company. The classic société à responsabilité limitée (S.à r.l.) is the workhorse of the country, used for everything from a bakery to a billion-euro holding. The simplified version, the SARL-S, was introduced in 2017 to let individual entrepreneurs start with as little as one euro and without a notary.
Both give limited liability and pay exactly the same taxes. They differ in who can own them, what they can do, how they are set up and how the outside world sees them. About six thousand SARL-S were created in the first six years; most founders treat it as a starting step, not a destination.
The standard company
EUR 12,000 capital, notarial deed, any owner, any activity including holding.
The starter company
EUR 1 to 12,000, private deed, individual owners only, trading and craft activities.
S.à r.l. and SARL-S in twelve rows
| S.à r.l. | SARL-S | |
|---|---|---|
| Share capital | At least EUR 12,000 | EUR 1 to EUR 12,000 |
| Paying in the capital | Within 12 months if the articles allow (since June 2026) | Within 12 months if the articles allow (since June 2026) |
| Deed | Notarial deed | Private deed; no notary needed |
| Shareholders | 1 to 100, individuals or companies | 1 to 100, individuals only; one SARL-S per person |
| Managers | Individuals or companies | Individuals only |
| Activities | Any, including holding and investment | Commercial, craft, industrial and some liberal professions |
| Business permit | Before trading; can be incorporated first | Before registration at the RCS |
| RCS registration fee | EUR 105.91 plus VAT | EUR 14.61 plus VAT |
| Legal reserve | 5% of profits until 10% of capital | 5% of profits until capital plus reserve reach EUR 12,000 |
| Share transfers | 75% shareholder approval, can be lowered to 50% | 75% shareholder approval, can be lowered |
| Taxes | Corporate, municipal, net wealth tax, VAT | Exactly the same |
| Conversion | — | To an S.à r.l. by notarial deed at any time; mandatory above EUR 12,000 or 100 shareholders |
When the SARL-S makes sense
- You are one or a few individuals. No company, fund or trust among the owners, and none of you already holds another SARL-S.
- The activity needs a business permit anyway. Trade, services, IT, a craft: the SARL-S is built for exactly these, and the permit comes first.
- Capital is genuinely scarce. Although since June 2026 the S.à r.l. also lets you pay the EUR 12,000 within a year, which removes much of the SARL-S advantage.
- You can live without bank credit at first. Founders report that banks and large clients are cautious with SARL-S; plan for a slower bank account.
The SARL-S saves you EUR 12,000 on day one and can cost you a bank account on day two. Since June 2026 the S.à r.l. lets you pay that capital within a year anyway.
Which one fits you?
Answer six questions. Some answers rule the SARL-S out entirely.
S.à r.l. or SARL-S: which fits you?
Six questions. You get the form, the reasons and the order of steps.
When only the S.à r.l. will do
- A company, fund or trust is a shareholder. The SARL-S accepts individuals only.
- It will hold shares or investments. A holding needs no business permit and falls outside what the SARL-S is for.
- A company will manage it. Only the S.à r.l. accepts corporate managers.
- Investors, lenders or tenders are in the plan. The standard form is what counterparties expect, and converting later costs a notarial deed.
- You already own a SARL-S. One per person, so the second company must be an S.à r.l.
Starting as a SARL-S and converting later
Converting a SARL-S into an S.à r.l. takes a shareholder resolution and a notarial deed, and the capital must reach EUR 12,000. It becomes mandatory if the capital exceeds EUR 12,000 or the company has more than 100 shareholders. There is no fixed deadline otherwise. Plan the switch before the first investor or bank loan, not during it.
The choice changes the paperwork and perception, not the tax bill.
Individuals only, one per person, trading and craft activities.
Holdings, corporate owners, investors and lenders.
The S.à r.l. capital can now be paid within 12 months.