How to start a business in Luxembourg in 2025: A step-by-step journey
Starting a business is not just about turning a dream into reality—it’s about building a story, a legacy, and a future. Luxembourg, a country that seamlessly blends tradition with innovation, is a fertile ground for ambitious entrepreneurs. Its strategic location, supportive ecosystem, and thriving economy make it a unique choice for those ready to take on the challenge.
But how exactly do you start a business here? What does the journey look like? Let’s take a deep dive into the world of entrepreneurship in Luxembourg, exploring not just the steps but also the essence of what it means to build something new in 2025.
Why Luxembourg is the land of opportunities
Luxembourg isn’t just another European country. It’s a hub of possibilities. Imagine a place where over 86 double tax treaties simplify global trade, where the financial sector attracts investments from around the globe, and where a multicultural workforce speaks your language—literally and figuratively.
But what truly sets Luxembourg apart is its size. While some see its small territory as a limitation, others recognize it as an advantage. In Luxembourg, you’re never far from your stakeholders, whether they’re government officials, potential partners, or clients. Its compact yet dynamic ecosystem allows ideas to move faster and partnerships to form more naturally.
Whether you’re a freelancer launching your personal brand or a tech startup eyeing European expansion, Luxembourg offers the perfect blend of accessibility and ambition.
The spark of an idea: Preparing for your business journey
Every great business starts with a single idea—a spark of inspiration that grows into a vision. But an idea alone isn’t enough. The journey from concept to creation requires careful preparation, especially in Luxembourg’s competitive but rewarding market.
Refining your vision
Before jumping into the administrative formalities, take a moment to refine your idea. Who is your target audience? What problem does your business solve? These are not just questions—they’re the foundation of your strategy.
Market research plays a critical role here. Dive into Luxembourg’s unique market dynamics. With its blend of local and international consumers, you’ll find opportunities in niche areas that cater to specific cultural or professional needs.
The personal factor
Your business is a reflection of you. Assess your skills, your strengths, and your gaps. In Luxembourg, where the business environment values precision and expertise, being honest about your abilities can help you decide whether to take on a partner or pursue additional training.
Setting the stage: Legal and structural foundations
Once your idea is solid, it’s time to give it a structure. In Luxembourg, the legal form of your business isn’t just a technicality—it’s a defining aspect of your operations, responsibilities, and vision.
Sole proprietorship or capital company?
Imagine you’re a freelance graphic designer or consultant. A sole proprietorship might be perfect for you, offering simplicity and flexibility. But if you’re launching a tech startup with plans to raise funds, a SARL-S or SA might be the better choice.
A tale of capital and collaboration
Luxembourg has clear requirements for different business forms, especially when it comes to capital. A private limited company (SARL) requires €12,000, while a simplified SARL-S can start with as little as €1. These options ensure that entrepreneurs at every stage—whether beginners or seasoned professionals—can find a structure that works for them.
A look at business forms
| Type | Best for | Features |
| Sole proprietorship | Freelancers, small-scale businesses | Easy to set up, unlimited liability |
| SARL | SMEs | Limited liability, minimum €12,000 capital |
| SARL-S | Startups, new entrepreneurs | Simplified setup, low capital requirements |
| SA | Large enterprises | Suitable for public offerings, €30,000 capital |
Each form comes with its own set of benefits and challenges, so take the time to match your vision with the right legal foundation.
Registering your business: Giving life to your idea
Picture this: your business idea is taking shape. You’ve chosen the structure and are ready to make it official. Registration is where your dream transforms into a legal entity, recognized and ready to operate.
The Luxembourg Business Register (LBR)
Every business, from sole proprietors to multinational corporations, must register with the LBR. This step formalizes your operations, providing your business with a unique identity.
The process might sound technical, but it’s surprisingly streamlined. For example, if you’re incorporating a company, a notary will handle most of the paperwork. Meanwhile, as an entrepreneur, you focus on the big picture: your goals and strategy.
Financial support: Building a solid foundation
Starting a business isn’t just about great ideas—it’s about having the resources to bring those ideas to life. In Luxembourg, financial support goes beyond traditional bank loans.
Public support for startups
The government actively supports innovation and entrepreneurship. From grants for SMEs to funds for tech and space startups, there’s no shortage of options. If you’re working on a project with societal impact, specialized aid is available to amplify your vision.
Navigating private funding
If you’re seeking private investors, Luxembourg’s robust financial sector offers numerous opportunities. Venture capitalists and angel investors are particularly interested in scalable, tech-driven ideas. Be prepared to pitch your vision with a solid business plan and financial projections.
Understanding taxation and compliance
No one likes taxes, but in Luxembourg, understanding the system can work to your advantage.
Corporate income tax
The corporate income tax (CIT) stands at 17%, with additional surcharges bringing the effective rate slightly higher. While this may seem steep, Luxembourg’s extensive network of double tax treaties helps minimize the overall tax burden for international businesses.
Value-Added Tax (VAT)
Luxembourg’s standard VAT rate of 17% is among the lowest in Europe. Depending on your business, you might even qualify for reduced rates, which can significantly improve your competitiveness.
Social security contributions
Whether you’re self-employed or employing a team, contributions to Luxembourg’s social security system are mandatory. These contributions ensure benefits like pensions and healthcare for employees, making them an integral part of business operations.
Finding the perfect office
Your business’s location is more than just an address—it’s part of your brand. Luxembourg offers a range of options, from coworking spaces that foster collaboration to traditional offices that convey stability.
Coworking spaces
If you’re a startup, coworking spaces offer flexibility and a vibrant community of like-minded professionals. They’re also cost-effective, making them ideal for businesses in their early stages.
Permanent offices
For established companies, traditional office spaces provide a sense of permanence and professionalism. Platforms like Immotop and AtHome make it easy to find spaces tailored to your needs.
Final thoughts: Your journey awaits
Starting a business in Luxembourg in 2025 isn’t just a procedural endeavor—it’s a journey filled with opportunities, challenges, and growth. This small yet mighty country offers a unique blend of tradition and innovation, making it a fertile ground for ambitious entrepreneurs.
So, what’s your next move? Whether you’re refining your idea, registering your business, or securing funding, Luxembourg is ready to welcome your vision. Take the leap, and let 2025 be the year your dream takes flight.
Read more: https://luxtoday.lu/en/guide/how-to-register-company-luxembourg
