In Luxembourg you need a business permit from the Ministry of the Economy for most activities, then CCSS affiliation; contributions are about 25% of income on a base between the social minimum wage (EUR 2,771.33 a month) and five times it, and the VAT franchise covers turnover up to EUR 50,000. In Belgium you join a social insurance fund, register at an enterprise counter for a KBO/BCE number and pay 20.5% up to EUR 75,024.54 and 14.16% up to EUR 110,562.42, with a minimum of EUR 890.42 a quarter; the VAT franchise is EUR 25,000. Non-EU nationals need a residence permit (Luxembourg) or a professional card (Belgium). A company usually pays from around EUR 70,000 to 100,000 of profit.
Self-employed in Luxembourg and Belgium: what it involves
Being self-employed means you work on your own account, invoice your own clients and carry your own risk. In both Luxembourg and Belgium you can do this as a natural person, without a company. Luxembourg calls you an indépendant; Belgium an indépendant or zelfstandige. You pay income tax on your profit, social contributions on the same profit, and VAT on your sales unless you stay below the franchise threshold.
The two countries start differently. Luxembourg controls who may start a business: for most commercial, craft and liberal activities you need a business permit, the autorisation d'établissement, before you send the first invoice. Belgium is more open. A sole trader registers at an enterprise counter, gets an enterprise number in the Crossroads Bank for Enterprises (KBO in Dutch, BCE in French) and joins a social insurance fund. Permits apply only to regulated professions and to non-EU nationals, who need a professional card.
The contribution systems differ too. Luxembourg charges about 25% of income, with a minimum base equal to the social minimum wage. Belgium charges 20.5% on income up to about EUR 75,000, less above and nothing beyond about EUR 110,000, with a quarterly minimum. The higher your profit, the more the gap between personal tax and corporate tax matters, and the more attractive a company becomes.
Permit first
Business permit from the Ministry of the Economy, then CCSS affiliation, VAT and tax registration.
Counter first
Enterprise counter, KBO/BCE number, social insurance fund, VAT activation.
25% vs 20.5%
Luxembourg on a base between the minimum wage and five times it; Belgium in two bands with a ceiling.
When profit grows
SARL-S or SARL in Luxembourg, SRL/BV in Belgium, once personal tax rates bite.
Luxembourg: permit, registrations and first steps
The business permit is the gate. The Ministry of the Economy (Directorate-General for SMEs and Entrepreneurship) issues it under the law of 2 September 2011 on the right of establishment. The ministry checks three things: your professional integrity, a fixed place of business in Luxembourg, and, for craft activities and certain commercial and liberal professions, a professional qualification. A consultant or IT freelancer usually needs only to prove integrity and an establishment. An electrician, a hairdresser or an accountant must show a diploma or recognised experience. Some professions sit outside this system: lawyers register with the Bar, doctors with the Ministry of Health, chartered accountants with their own order.
- Prepare the file.Identity document, criminal record extracts from Luxembourg and from your countries of residence in recent years, a declaration of honour, proof of the business address and, where needed, diplomas.
- Apply for the business permit.Online through MyGuichet. Processing typically takes several weeks.
- Register with the Trade and Companies Register.A commercial sole trader must register with the RCS; registration gives you an RCS number.
- Affiliate with the CCSS.Send the declaration of entry for a self-employed person; affiliation follows the permit.
- Register for VAT.With the Administration de l'enregistrement, des domaines et de la TVA (AED), or opt for the franchise.
- Income tax.Your profit goes into your annual personal return with the Administration des contributions directes; advance payments follow.
Non-EU nationals must first obtain a residence permit as a self-employed worker from the Directorate of Immigration, applied for from abroad before entering Luxembourg. The ministry assesses the economic interest of the project and your resources; the business permit is a separate step. EU, EEA and Swiss citizens only need to register their residence with the commune.
Law and practice: Law of 2 September 2011 regulating access to the professions of craftsman, trader and industrialist and to certain liberal professions; Social Security Code, article 1 and following; Law of 29 August 2008 on free movement and immigration, article 51 for self-employed workers. Procedure: guichet.public.lu. See also our note on the Luxembourg business permit.
Luxembourg: social contributions, VAT franchise and income tax
Self-employed people in Luxembourg pay both the employee and the employer share of social security. The contribution base is your professional income, but never less than the social minimum wage for an unskilled worker and never more than five times that amount. The minimum wage was EUR 2,703.74 a month on 1 January 2026 and EUR 2,771.33 after the indexation of 1 June 2026, which puts the minimum base at about EUR 33,250 a year and the ceiling at about EUR 166,300.
| Branch | Rate 2026 | Base |
|---|---|---|
| Health care (benefits in kind) | 5.60% | Income between minimum and maximum base |
| Cash benefits (sick pay) | 0.50% | Same |
| Pension | 17.00% | Same |
| Accident insurance | 0.65% (base rate, bonus-malus applies) | Same |
| Dependence insurance | 1.40% | All income minus a quarter of the minimum wage, no ceiling |
| Mutualité des employeurs | Voluntary | Covers income loss during the first weeks of illness |
Three points matter in practice. First, the minimum base means that a part-year or low-income start is expensive: on EUR 20,000 of profit you still pay contributions as if you earned the minimum wage. An activity alongside a job (activité accessoire) uses a base of one third of the minimum wage, and very small incomes can be exempted on request. Second, the CCSS bills provisionally, on the minimum base for a newcomer, and settles when the tax return is assessed, so set money aside for the adjustment. Third, the pension rate went up from 16% to 17% on 1 January 2026 under the pension reform.
Health, cash benefits, pension and accident: 23.75% of EUR 60,000 = EUR 14,250. Dependence: 1.4% of (EUR 60,000 minus about EUR 8,300) = about EUR 720. Total about EUR 14,970 a year, roughly 25% of profit. On EUR 25,000 of profit the minimum base applies: about EUR 7,900 plus EUR 230 dependence, about 32% of profit.
For VAT, Luxembourg raised the franchise threshold from EUR 35,000 to EUR 50,000 on 1 January 2025. Below it you invoice without VAT and do not file returns, but you cannot recover input VAT. If turnover exceeds the threshold by no more than 10%, the franchise runs until the end of the year; above EUR 55,000 it ends the next day, and in both cases you are out of the scheme for the following year. The standard VAT rate is 17%. Business clients usually prefer a VAT-registered supplier, so many consultants register voluntarily.
Profit is taxed on the progressive income tax scale, which rises to 42%, plus the solidarity surcharge for the employment fund of 7%, or 9% for higher incomes: a top marginal rate of 45.78%. Social contributions are deductible. A self-employed person with EUR 100,000 of profit can expect a combined burden of tax and contributions well above 40% at the margin.
Law and practice: Social Security Code; contribution rates and bases for non-salaried workers per CCSS notice of 13 March 2026 and the indexation of 1 June 2026; VAT Law of 12 February 1979, article 57, as amended by the law transposing Directive (EU) 2020/285; Income Tax Law (LIR), article 118. Sources: ccss.lu, pfi.public.lu, santesecu.public.lu.
Belgium: independent status, enterprise counter and KBO/BCE
In Belgium the formalities are handled by private enterprise counters (guichets d'entreprises, ondernemingsloketten) on behalf of the state. They register you in the Crossroads Bank for Enterprises and you receive your enterprise number, which is also your VAT number once VAT is activated. The counter also checks your access to the profession: basic management knowledge is no longer required (Flanders and Brussels dropped it earlier, Wallonia on 1 October 2025), but regulated activities still need proof of professional competence, and professions such as accountants, architects or physiotherapists need registration with their institute or order.
- Join a social insurance fund.Before you start, with a private fund or the public one (INASTI/RSVZ). The fund collects your contributions and pays family and other benefits.
- Register at an enterprise counter.You get your KBO/BCE number; the counter charges a statutory registration fee.
- Activate VAT.Through the counter or directly with the FPS Finance; choose the normal regime or the franchise.
- Open a separate business account.It keeps business payments apart from private ones and makes the books and VAT returns far easier.
- Inform your health insurance fund (mutualité).Your status changes from employee to self-employed.
- Plan for tax prepayments.Self-employed people make advance tax payments or pay a surcharge on the final bill.
Non-EU nationals need a professional card (carte professionnelle, beroepskaart) to work as self-employed, issued by the region where the business is based. In Brussels the authority is Brussels Economy and Employment; the project must show economic value for the region, the first card is often granted for two years and the card covers only the listed activities. The card does not replace a right of residence; it depends on it. EU, EEA and Swiss citizens, and some residents with long-term permits, do not need a card.
Law and practice: Code of Economic Law, Book III (KBO/BCE and enterprise counters); Royal Decree no. 38 of 27 July 1967 on the social status of the self-employed; Law of 19 February 1965 on the professional activities of foreign nationals and the regional rules on the professional card. Sources: economie.fgov.be, be.brussels, ucm.be.
Belgium: quarterly social contributions, VAT franchise and income tax
Belgian contributions are quarterly and are first charged provisionally on your income from three years earlier, revalued. Starters pay a provisional minimum and the fund regularises later when your real income is known. For 2026 the rates on net taxable professional income are:
| Income band 2026 | Rate | Note |
|---|---|---|
| Up to EUR 75,024.54 | 20.50% | Minimum income for a main occupation: EUR 17,374.08 |
| EUR 75,024.54 to EUR 110,562.42 | 14.16% | |
| Above EUR 110,562.42 | 0% | Maximum EUR 5,103.05 a quarter |
| Minimum, main occupation | EUR 890.42 a quarter | EUR 459.82 for primostarters with low expected income |
| Side activity | Same rates | No contribution below EUR 1,922.16; minimum EUR 98.51 a quarter |
The amounts exclude the fund's management fee of a few per cent. A starter can ask for a reduced provisional contribution on the basis of objective data about expected income, which helps cash flow in the first year but means a larger bill if income turns out higher.
20.5% of EUR 60,000 = EUR 12,300 a year, or EUR 3,075 a quarter, plus the management fee. At EUR 100,000: 20.5% of EUR 75,024.54 (EUR 15,380) plus 14.16% of EUR 24,975 (EUR 3,537), about EUR 18,920. The cap is about EUR 20,410 a year, reached at EUR 110,562.42.
For VAT, the small business franchise applies when annual turnover is no more than EUR 25,000 excluding VAT. Certain sectors are excluded, including construction-related work and restaurants required to use a registered cash system. If you exceed the threshold by less than 10%, normal VAT applies from 1 January of the next year; above that, immediately. Since 2026 franchise businesses also report their previous year's turnover through Intervat. The standard VAT rate is 21%.
Income tax is progressive, from 25% to 50%, plus the municipal surcharge set by your commune. Social contributions are deductible as professional expenses. Above roughly EUR 50,000 of taxable income most of each extra euro is taxed at 50% plus surcharge, which is where the company route starts to pay.
Law and practice: Royal Decree no. 38 of 27 July 1967, articles 11 to 13; 2026 thresholds and amounts per the FPS Social Security contribution table 2026; VAT Code, article 56bis (franchise for small businesses); Income Tax Code 1992, article 130 and following. Sources: socialsecurity.belgium.be, finances.belgium.be.
When a company beats sole trading
The case for a company is the same in both countries: personal tax and social contributions on profit reach 45% to 55% at the margin, while corporate tax is around 20% to 25%. You still need money to live on, so you pay yourself a director's remuneration, which is taxed personally, and leave or distribute the rest. The company also limits your liability and looks more substantial to clients and banks. Against that stand set-up costs, annual accounts, a separate bank account and stricter bookkeeping.
| Luxembourg | Belgium | |
|---|---|---|
| Company forms | SARL-S (capital EUR 1 to EUR 12,000, natural persons only) or SARL (EUR 12,000) | SRL/BV: no minimum capital, but sufficient equity and a financial plan |
| Corporate tax 2026 | Luxembourg City combined: about 21.7% on profit up to EUR 175,000; 23.87% above EUR 200,000 | 25%; 20% on the first EUR 100,000 for SMEs |
| Condition for lower rate | Automatic for small profits | At least one director paid EUR 45,000 a year (or the profit, if lower); a rise to EUR 50,000 has been announced from 2026 income |
| Director's social status | A managing shareholder with more than 25% usually stays affiliated as self-employed | Company director is self-employed; contributions on the remuneration |
| Dividends | 15% withholding; residents tax half of qualifying dividends | 30% withholding; 15% or 20% for VVPRbis shares |
In Belgium the director's remuneration rule shapes the decision. To keep the 20% rate on the first EUR 100,000, the company must pay at least one director EUR 45,000 a year, or the full taxable profit if that is lower; the government has announced a rise to EUR 50,000, indexed annually, so check the current threshold for your financial year. A company with EUR 120,000 of profit before director pay might pay EUR 50,000 remuneration, leaving EUR 70,000 taxed at 20%. The director pays contributions and personal tax on EUR 50,000 instead of EUR 120,000, and the after-tax profit can be paid out later as VVPRbis dividends or through the liquidation reserve.
In Luxembourg the gap is wider at the top: 45.78% personal marginal rate against about 22% corporate tax on small profits. A consultant with EUR 150,000 profit who needs EUR 70,000 to live on can leave the rest in a SARL at the lower rate. The SARL-S is quick and cheap to set up, but it is limited to natural persons and is often converted to a SARL once the business grows. Our note on SARL vs SARL-S covers the choice.
In Belgium a company starts to pay from around EUR 70,000 to 80,000 of profit, because below that the minimum director remuneration absorbs most of it. In Luxembourg the threshold is higher, around EUR 80,000 to 100,000, because the personal scale is gentler in the middle bands. Both are rules of thumb, not statutory figures: your family situation, other income and how much you take out move them.
Accounting changes with the switch as well. A small sole trader in either country can, below certain turnover thresholds, keep simplified books: a receipts and expenses record, VAT records and an annual summary for the tax return. A company always keeps double-entry accounts, files annual accounts with the Trade and Companies Register in Luxembourg or the Central Balance Sheet Office of the National Bank in Belgium, and files a corporate tax return on top of your personal one. Budget for this before you compare tax savings.
As a sole trader, contributions are about EUR 37,600 and income tax on the rest falls largely in the 42% to 45.78% band. Through a SARL paying you EUR 70,000 a year, contributions are charged on the EUR 70,000 remuneration rather than the full profit, and the remaining profit of about EUR 80,000 before company-side costs is taxed at roughly 21.7% inside the company. The money left in the SARL is not yet yours personally, but it can fund investments, a pension or later dividends.
Law and practice: Luxembourg: Law of 10 August 1915 on commercial companies (SARL and SARL-S), LIR article 174 (corporate income tax), article 115 no. 15a (50% dividend exemption). Belgium: Code of Companies and Associations, Book 5 (SRL); Income Tax Code 1992, article 215 (reduced rate and director remuneration condition). The rise to EUR 50,000 is part of the federal government's 2026 measures; check entry into force.
Check your route: steps, contributions and structure
A simplified checker for one person starting a main activity. Contributions use 2026 rates and bases; income tax is not included.
Self-employed in Luxembourg or Belgium: steps, contributions, structure
Pick the country and enter your expected annual profit. You see the registrations you need, an estimate of your social contributions and whether a company is worth considering.
Business permit first; contributions about 25% with a minimum base.
Enterprise counter and social fund; 20.5% with a quarterly minimum.
Franchise up to EUR 50,000 in Luxembourg and EUR 25,000 in Belgium.
Worth a look once profit passes about EUR 70,000 to 100,000.
Self-employed in Luxembourg and Belgium: frequent questions
Do I need a business permit to be self-employed in Luxembourg?
For commercial, craft and many liberal professions, yes: the autorisation d'établissement from the Ministry of the Economy. Some professions, such as lawyers and doctors, are licensed by their own order or ministry instead. You must hold the authorisation before you start.
How much are social contributions for the self-employed in Luxembourg?
About 23.75% of your professional income for health, cash benefits, pension and accident insurance, plus 1.4% dependence insurance. The base is at least the social minimum wage (EUR 2,771.33 a month since 1 June 2026) and at most five times that amount.
How much are social contributions for the self-employed in Belgium?
20.5% of net taxable professional income up to EUR 75,024.54 and 14.16% between that and EUR 110,562.42 in 2026, nothing above. The minimum for a main occupation is EUR 890.42 a quarter, plus the fund's management fee.
What is the VAT franchise threshold?
EUR 50,000 a year in Luxembourg since 2025 and EUR 25,000 a year in Belgium. Below the threshold you can invoice without VAT, but you cannot reclaim VAT on your costs.
Can a non-EU citizen become self-employed in Belgium or Luxembourg?
Yes, but not with a tourist or employee status. Luxembourg requires a residence permit as a self-employed person, applied for before arrival. Belgium requires a professional card issued by the region, together with a right of residence.
When should I switch to a company?
When your profit regularly exceeds what you need to live on and you are in the top personal tax brackets. As a rule of thumb, from around EUR 70,000 to 80,000 of profit in Belgium and EUR 80,000 to 100,000 in Luxembourg, depending on how much you take out.