Setting up a company in Luxembourg in 2026 requires founders to choose a legal structure, define the activity, prepare incorporation documents, establish a registered office and complete the required corporate, tax, VAT, beneficial ownership and accounting registrations.
A major reform took effect on 2 June 2026. Under the Luxembourg law of 18 May 2026, founders of a private limited liability company, or SARL, may defer payment of qualifying cash contributions forming all or part of the statutory EUR 12,000 minimum capital for up to twelve months after incorporation. The minimum capital remains EUR 12,000 and must still be fully subscribed when the company is formed. The reform changes the timing of payment, not the legal capital requirement.
What Changed for SARLs in 2026?
Before the reform, the minimum SARL capital generally had to be fully subscribed and paid at incorporation. The new rules allow qualifying cash contributions corresponding to the statutory EUR 12,000 minimum capital to be paid after incorporation.
The main conditions are:
The minimum capital must still be fully subscribed at incorporation. All or part of the qualifying EUR 12,000 minimum cash capital may be paid later. Outstanding capital must generally be paid within twelve months. The articles may establish a shorter period. Payment terms and capital-call arrangements should be clearly stated. Founders may still pay the full amount at incorporation.
The deferral does not apply to every contribution. Capital exceeding EUR 12,000, contributions in kind, share premiums and shares issued after incorporation generally cannot benefit.
For a SARL-S, qualifying cash capital subscribed at incorporation may also benefit from deferred payment, subject to the rules governing that structure. A SARL-S must have capital between EUR 1 and EUR 12,000.
Unpaid capital remains legally due and may create disclosure and capital-call requirements. Deferred payment is financing flexibility, not reduced capital.
SARL, SARL-S or SA: Which Structure Is Right?
The appropriate legal form depends on ownership, financing and governance.
- SARL-S: Suitable for eligible individual entrepreneurs. Capital ranges from EUR 1 to EUR 12,000, and shareholders must generally be natural persons.
- SARL: Minimum capital is EUR 12,000. The SARL is commonly used by SMEs, operating companies, subsidiaries and businesses with corporate shareholders. The 2026 deferred-payment option can make incorporation more flexible.
- SA: Minimum capital is EUR 30,000 and the form is generally more suitable for larger or investor-backed businesses. The capital must be fully subscribed, while at least 25% generally has to be paid up at incorporation. The new SARL mechanism is therefore different from existing SA capital rules.
Steps to Set Up a Company in Luxembourg
1. Define the Business Activity
Define the products or services, markets, financing and whether the activity is regulated. This can affect the corporate purpose, business permit, VAT and banking review.
2. Check Business Permit Requirements
Many commercial, craft, industrial and certain professional activities require a Luxembourg establishment authorisation. Applicants may need to demonstrate professional integrity and qualifications. The official stamp duty is generally EUR 50.
3. Prepare the Articles of Association
The articles cover the company name, legal form, purpose, registered office, capital, shareholders and management. Where deferred capital is used, payment terms should be clearly documented.
4. Complete KYC and Beneficial Ownership Checks
Banks, notaries and advisers may request identity documents, proof of address, ownership structures, source-of-funds information, business plans and transaction forecasts.
5. Register the Company
The company must be registered with the Luxembourg Trade and Companies Register (RCS), with relevant documents filed or published through the RESA. Beneficial owners must generally also be registered with the RBE.
6. Complete Tax, VAT and Social Security Registrations
Depending on the activity, registrations may be required with the ACD, AED, CCSS and relevant professional or regulatory bodies.
How Much Does It Cost to Set Up a Company in Luxembourg?
There is no single fixed incorporation cost. The total depends on the legal form, activity and services required. A realistic budget may include:
Minimum share capital: EUR 12,000 for a SARL and EUR 30,000 for an SA.
Business permit stamp duty: generally EUR 50 where required.
Notarial fees.
RCS and publication fees.
Registered-office or domiciliation costs.
KYC and translation costs.
Professional incorporation and banking assistance.
Accounting, VAT and annual compliance costs.
The 2026 SARL reform can reduce the qualifying cash capital that must be paid before incorporation, but it does not eliminate the capital requirement, government fees, professional costs or working-capital needs.
Luxembourg Corporate Tax and VAT
From the 2025 tax year, corporate income tax is 14% for taxable income up to EUR 175,000 and 16% above EUR 200,000, with a transitional calculation between those thresholds.
For a company established in Luxembourg City and subject to the upper rate, the aggregate nominal corporate tax burden is approximately 23.87%, including corporate income tax, the employment fund contribution and municipal business tax. Net wealth tax may also apply.
VAT depends on the nature, location and turnover of the company’s activities. Luxembourg’s small-business VAT exemption may apply, subject to the applicable conditions, where annual turnover excluding VAT does not exceed EUR 50,000. Cross-border activities may create additional VAT obligations.
Is Deferred Capital a Good Option?
The new SARL rules can reduce certain pre-incorporation capital-account delays and improve short-term cash-flow flexibility.
However, deferred capital is not working capital. The company still needs funds to pay employees, suppliers, rent, taxes and professional fees. Unpaid capital remains legally due and can create accounting, disclosure and capital-call requirements.
For some businesses, full payment at incorporation may still be preferable where banks, investors or licensing requirements value fully paid-up capital.
Final Considerations
The 2026 SARL reform adds flexibility, but does not reduce the statutory capital requirement or replace adequate financing and compliance planning.
Founders should consider the company’s activities, ownership, financing, banking requirements, governance, tax position and operating costs before choosing a legal form or deferring capital.
Financial Services Accountant Luxembourg assists entrepreneurs, investors and international groups with Luxembourg company formation, business permits, registered-office arrangements, banking preparation, tax and VAT registration, accounting and ongoing corporate compliance.
