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Forming a Private Company

How is a private limited liability company or equivalent corporate vehicle most commonly used by foreign companies to establish a business in your jurisdiction formed? 


Regulatory framework


The Company law governs private limited liability companies.


Depending on the type of business to be run by the company, other legislation may apply and companies may be subject to the supervision of specific authorities:


  • Business licenses requirements for trading activities (see Question 4);

  • Credit institutions and professionals of the financial sector must comply with the law dated 5 April 1993 on the financial sector and are subject to the supervision of the regulatory authorities i.e. Commission de Surveillance du Secteur Financier (CSSF);

  • Investment funds must comply with specific legislation depending on their form, purpose and investment policies and are subject to the supervision of the CSSF;

  • Alternative investment fund managers must comply with the law dated 12 July 2013 on alternative investment funds managers and are subject to the supervision of the CSSF;

  • Insurance companies are subject to the law dated 6 December 1991 on the insurance sector and supervised by the Commissariat aux Assurances.


Corporate governance guidelines have been set up by the Luxembourg Stock Exchange (LSE) and are generally recognised by practitioners as reference rules for governance in non-listed companies.


For more information on the regulatory authorities see box: The Regulatory authorities.

Tailor-made or shelf companies


Luxembourg Company law and corporate practice is based on freedom of contracts and provide high flexibility on the way articles of incorporation for private limited liability companies are drafted.  Some local service providers offer shelf companies, i.e. companies with standard articles of incorporation.


However, their use is limited to the extent that KYC and tax substance requirements but also the amendment of subsequent articles render their proper acquisition costly and dilutive. 


Investors prefer usually to incorporate directly their company tailored to their own needs, since once the bank account is opened the company can be incorporated in 24 hours.

Formation process


The incorporation of a private limited liability company requires the following steps:


  • Check of company name availability with the Luxembourg Trade and Companies Registry;

  • Opening of a blocked bank account for the company under incorporation; on which the minimum amount for the share capital must be sorted;

  • Blocking the capital on the bank account and certification by the bank, addressed to the notary, that the share capital is available for incorporating the company;

  • Anti-money laundering declarations from the ultimate beneficial owners of the company;

  • Set up of the company’s articles of incorporation (with a mandatory translation in German or French);

  • Incorporation of the company in front of a Luxembourg notary;

  • Release of the share capital by the notary’s certification addressed to the bank that the company has been incorporated;

  • Electronic filing of the company’s articles of incorporation by the notary with the Luxembourg Trade and Companies Registry;

  • Publication of the articles on the electronic platform “Recueil Electronique des Sociétés et Associations” (RESA).


The company exists immediately after its incorporation, but its articles of incorporation are only enforceable against third parties as from their publication, which is now made electronically, reducing any adverse delay or timing issues in this respect.

As from its incorporation, the company’s share capital is freely available for the company and the directors may use this amount to run the company business.

Company constitution


The articles of incorporation are the sole legal documents required to incorporate a private limited liability company.  There is no legal model, but local practitioners have somehow standardised the structure and drafting of articles of incorporation for companies.


Articles of incorporation of limited liability companies and partnerships limited by shares are fully published. Partnerships agreements are published by extracts.


Shareholders agreements are frequently used in Luxembourg and are not published.  Some provisions of those agreements may be inserted in the articles.

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