Luxembourg

Operating a Business in Luxembourg

Setting up a company | Working conditions | Cost of labor | Social partners

Setting up a company

Legal business entities

Types of companies and capital (max/min)	Number of partners/shareholders and liability	Registration fees
Private Limited Company EUA 12,500 totaly subscribed	Minimum 2 partners Maximum 40 partners. NB: 1 member for a sole proprietorship. Liability is limited to the amount contributed.	Verify uniqueness of company name and reserve name: EUR 6. Notary drafts and notarizes the company deed: EUR 1,000-2,000 notary fees + 0.5% of statutory capital. Apply for business license: EUR 24.
Public Limited Company EUR 31,000 with 1/4 released at the creation.	Minimum 2 shareholders. Liability is limited to the amount contributed.	Verify uniqueness of company name and reserve name: EUR 6. Notary drafts and notarizes the company deed: EUR 1,000-2,000 notary fees + 0.5% of statutory capital. Apply for business license: EUR 24.
General Partnership. No minimum capital.	Minimum 2 partners. Partners' liability is joint and several on obligations and debts of the company.	Verify uniqueness of company name and reserve name: EUR 6. Notary drafts and notarizes the company deed: EUR 1,000-2,000 notary fees + 0.5% of statutory capital. Apply for business license: EUR 24.
Limited Partnership. No minimum capital.	Minimum 2 partners. Two types of partners: active partners and sleeping partners. Active partners' liability is joint and several. Liability of sleeping partners is limited to the amount contributed.	Verify uniqueness of company name and reserve name: EUR 6. Notary drafts and notarizes the company deed: EUR 1,000-2,000 notary fees + 0.5% of statutory capital. Apply for business license: EUR 24.
Cooperative Company No minimum capital	Minimum 7 partners Partners' liability is joint and several or divided, unlimited or limited to amount contributed depending on the status.	Verify uniqueness of company name and reserve name: EUR 6. Notary drafts and notarizes the company deed: EUR 1,000-2,000 notary fees + 0.5% of statutory capital. Apply for business license: EUR 24.

Business setup procedures: Articles of incorporation for companies are laid down in a notorized deed, which has to be registered and filled with the Luxembourg Formanity Center of the Chamber of Commerce and published in the official gazette. Further information is provided by the leguichet.org website.
The competent organization: The Ministry for the Middle Classes, Tourism and Housing

Working conditions

Legal weekly duration: The Law allows for a duration of 40 hours per week and 8 hours per day. The daily working time may not exceed 10 hours.
Retirement age: 65
Working contracts: Employment contracts are regulated by law. Collective agreements and individual negotiations complement it.
The terms of the employment contracts are very rigid.
A work contract is either signed for an indeterminate period (Contrat à Durée Indéterminée/ CDI), which it is most often the case, or for a fixed term (Contrat à Durée Déterminée/ CDD). The CDD cannot last more than 24 months, including renewals. It can only be renewed twice and only if the initial contract includes a renewal clause. The Law strictly defines the framework of using a fixed-term contract. It is contracted for the accomplishment of precise and temporary tasks in a company.

Cost of labor

Minimum wage: The Law fixes a Minimal Social Salary (SSM) applicable to all employees. The rate depends on the age and skills of the workes: it is 100% for unskilled workers aged 18+, 75% for employees aged between 15 and 16 years and 80% for employees aged 17. Skilled workers of more than 18 years of age profit from a 120% rate. On March 18, 2008 this amounted to 1,503 EUR (USD1,968 ) for unskilled workers and 1,804 EUR (USD2,363) for skilled workers.
Social contributions: Social security contributions paid by employers: 12% for an employee and 14.86% for a worker.
Social security contributions paid by employees:
11,80% pour un employé et 14,05 % pour un ouvrier. 11.80% for an employee and 14.05 % for a worker.

Social partners

Social dialogue and involvement of social partners: Luxembourg enjoys a rather calm social climate. The majority of industrial workers are associated with the dominant political party. Trade unions are active in several fields but they mainly defende union interests in collective negotiations during meetings with the employer, public and social authorities. They also provide free judicial aid.
Unions: LCGB
OGBL
Unionization rate: Around 50% in 2007.
Labor regulation bodies: Ministry of Labour
Federation des Industriels Luxembourgeois (FEDIL)