Practical founder guide v1

Luxembourg SARL vs SARL-S Decision guide and compliance dossier

A practical guide for founders choosing between SARL and SARL-S, checking permit needs, preparing company creation, and avoiding the most common compliance mistakes.

Current to 27 May 2026. Practical guidance only. Not legal, tax, accounting, employment, immigration, or regulatory advice.
Choose the Structure View Red Flags

Which legal structure should you choose?

Start with the questions that can rule out SARL-S. If one answer points to SARL, do not force SARL-S just because it is cheaper to incorporate.

Source checked Guichet SARL Guichet SARL-S

This guide gives a practical orientation. It does not replace professional permit, tax, or legal review.

1. Will any shareholder be a company, fund, holding company, foundation, or other legal person?
2. Do you expect to raise money from an investment fund, corporate investor, family office vehicle, or dedicated investment structure?
3. Does any founder already hold shares in another SARL-S?
4. Do you need more than EUR 12,000 share capital?
5. Does the activity fall within SARL-S-compatible scope: trade, craft, industrial activity, or eligible liberal profession?
6. Is the activity regulated or special, such as finance, payment, crypto, insurance, health, transport, HORECA, real estate, or construction?
7. Do you expect fast growth, employees, bank financing, investors, major suppliers, or capital-heavy operations?

Quick Orientation

SARL-S can suit a simple launch, but its use is limited. SARL is usually better for investors, company shareholders, holding structures, and serious growth.

Source checked SARL capital, shares, transfers SARL-S restrictions
Situation Orientation Key point
Solo consultant, small trader, small craft activity SARL-S may work Low capital, no notary, simple founder-owned setup.
Two natural-person founders, no investors expected SARL-S may work, SARL often safer SARL-S can work, but deadlock and exit rules matter.
Young company expecting private investors, funds, convertibles, or structured fundraising SARL SARL-S cannot have legal-person shareholders.
Holding company or group structure SARL SARL-S is not designed for holding vehicles.
Restaurant, shop, construction, manufacturing Usually SARL Capital, permits, leases, staff, insurance, and suppliers increase risk.
Regulated financial, insurance, investment, payment, crypto, health, or transport activity Specialist review first The legal structure is secondary to authorisation and regulator analysis.

Points to Check Before Choosing

Tick items as you work. Progress is stored only in this browser.

SARL-S: Conditions to Meet

0 of 10 Complete

SARL: When to Choose It

0 of 8 Complete

Business Permit

0 of 10 Complete

Before Investors

0 of 12 Complete

Incorporation Steps

Start with activity and permit analysis. Do not start with the notary or private deed before the operating constraints are clear.

Incorporate a SARL
  1. Define the activity precisely.
  2. Check business permit, sector licence, or professional qualification needs.
  3. Choose shareholders and ownership percentages.
  4. Decide manager structure and signature powers.
  5. Draft articles and consider a shareholders' agreement.
  6. Prepare identification and compliance documents for notary, bank, and accountant.
  7. Arrange share capital and evidence of funding.
  8. Sign the notarial deed and file with RCS.
  9. Register beneficial owners with RBE.
  10. Register VAT and CCSS where required.
  11. Set up accounting, invoice template, document storage, contracts, GDPR, and insurance.
  12. Start trading only when permits and licences are in order.
Incorporate a SARL-S
  1. Confirm all shareholders are natural persons.
  2. Confirm no founder is blocked by the one-SARL-S rule.
  3. Confirm capital is between EUR 1 and EUR 12,000.
  4. Confirm the activity fits SARL-S scope.
  5. Apply for the business permit.
  6. Draft private deed and articles.
  7. Choose a natural-person manager.
  8. File with RCS and include required SARL-S disclosures.
  9. Register beneficial owners with RBE.
  10. Register VAT and CCSS where required.
  11. Set up bookkeeping, invoice numbering, contracts, GDPR, and insurance.
  12. Track when conversion to SARL becomes necessary.

Calendar After Incorporation

Most penalties come from missed operating obligations, not from choosing the wrong label on day one.

Source checked VAT registration CCSS self-employed CCSS hiring Annual accounts
Timing Obligation
Before trading Business permit, bank or payment account, accounting setup, invoice template, insurance, and contracts.
Within 15 days of taxable activity, unless exempt VAT registration where compulsory.
Within 8 days of self-employed activity CCSS self-employed affiliation where applicable.
Within 8 days of hiring an employee CCSS employer and employee declarations.
Monthly Payroll and social-security process if employees or relevant manager remuneration exist.
Monthly, quarterly, or annually VAT returns depending on turnover and VAT status.
Continuously Keep invoices, bank statements, contracts, payroll, VAT, and accounting records.
Within 1 month of many corporate changes File RCS amendments and RBE updates where required.
Within 6 months after year-end Approve annual accounts.
Within 7 months after year-end File annual accounts with RCS.
Before dividends Confirm distributable profit, proper approval, and withholding tax treatment.

Operating Watchpoints

These are the recurring obligations founders usually underestimate after incorporation.

AccountingChoose a fiduciary or software, reconcile bank movements, keep invoices, document shareholder loans, approve and file annual accounts.
RBEIdentify beneficial owners, collect ID and address data, then update after share transfers, capital changes, death, or control changes.
VATCheck registration, possible exemption, reverse charge, EU purchases, invoice wording, eCDF access, and OSS/IOSS for online sales.
Corporate taxBudget CIT, municipal business tax, net wealth tax, tax advances, dividend withholding, shareholder loans, and transfer pricing.
Founder-managerCheck active work, ownership over 25%, remuneration, cross-border status, permit link, and CCSS treatment.
HiringPrepare employer registration, contracts, payroll, minimum wage, working time, occupational health, wage withholding, GDPR notices, and intellectual-property clauses.
ContractsUse clear customer terms, supplier contracts, quotes, invoices, SaaS terms, contractor agreements, and shareholder loan agreements.
GDPR and intellectual propertyPublish privacy notices, manage cookies and processors, assign code and brand assets to the company, and register domains in company name.

Warning Signs

If one of these sounds like your situation, verify before signing.

SARL-S simplifies creation, not the obligations. It does not remove substance, permits, tax, accounting, social-security, or regulatory rules.
  • A holding company would own the SARL-S: not allowed because SARL-S shareholders must be natural persons.
  • Invoicing before the permit: permit-required activity needs prior authorisation.
  • Creating with EUR 1 and nothing more: legal capital is not working capital.
  • Delaying accounting because the company is small: annual accounts still apply.
  • Replacing remuneration with dividends: dividends require distributable profit and tax analysis.
  • Running everything abroad with a simple address: substance, effective management, permit, and tax residence need review.
  • Promising SARL-S shares to a company investor: legal persons cannot become SARL-S shareholders.
  • Creating with friends without a shareholders' agreement: exits, deadlock, death, divorce, and disputes should be anticipated.
  • Assuming contractor code belongs to the company: written intellectual-property assignment is needed.
  • Closing the company in a few clicks: dissolution needs tax, VAT, CCSS certificates, and filings.
  • Postponing RBE/RCS updates: late or wrong filings can create penalties and bank issues.
  • Ignoring VAT because the activity is small: VAT can apply from the start, especially cross-border.

Common Questions

Short answers for the questions founders usually ask before choosing the structure.

Business Creation Journey

Before choosing SARL or SARL-S, structure the idea, business plan, financing, permit path, legal structure, and mandatory registrations.

Verified source Chamber of Commerce House of Entrepreneurship
1. Idea and feasibility Challenge the idea, clarify customers, market, founder skills, and the first operating assumptions.
2. Business plan Write the mission, products, customers, territory, launch milestones, organisation, financial forecasts, and funding needs.
3. Financing Compare founder funds, bank financing, guarantees, SNCI, public aid, and cash runway before fixing share capital.
4. Permit path Identify business permit, qualifications, professional integrity, fixed Luxembourg premises, and effective management.
5. Legal structure and registrations Choose SARL or SARL-S, then organise RCS/LBR, RBE, VAT, ACD, CCSS, banking, accounting, and insurance.
Practical rule

SARL/SARL-S comes after the business project, not before it.

  • Simple project, low capital, natural-person shareholders, and no investors: SARL-S may work.
  • Investors, growth, holding structures, legal-person shareholders, or meaningful financing: use SARL.
  • Permit-covered activity: clarify the permit before invoicing or choosing the structure.
  • Support may come from the House of Entrepreneurship, House of Startups, Mutualité de Cautionnement, SNCI, and public aid routes.

Support and Financing

Company creation is not only a SARL/SARL-S choice. The project may also need guidance, a business plan, guarantees, aid, premises, or an incubator.

Verified source Chamber of Commerce House of Entrepreneurship
House of EntrepreneurshipSupport from idea to launch, workshops, partners, financing, digitalisation, business development, and transfer.
House of StartupsStartup and innovation ecosystem, incubators, accelerators, and Luxembourg-City Incubator depending on the project profile.
Mutualité de CautionnementPotential guarantee support where bank-requested collateral is insufficient to finance the project.
SNCIMedium and long-term financing, including creation-transfer, investment, innovation, and export financing.
Public AidCheck aid before signing or committing spend because conditions vary by activity and project type.
Practical WorkshopsBusiness plan, access to finance, state aid, and launch preparation can be worked through in dedicated sessions.

Template Set

Reusable founder worksheets and checklists for idea validation, business planning, financing, premises, legal structure, mandatory registrations, and ongoing compliance.

Founder template Adviser review before reliance Chamber creation journey
Printable set

Use these before the notary, bank, accountant, or permit file.

These templates are deliberately practical. They help a founder write down the facts advisers will ask for: idea, market, business plan, financing, premises, activity, owners, capital, permit path, tax/VAT/CCSS exposure, investor readiness, and conversion triggers.

Founder Information Sheet Basic facts before choosing the legal structure.
Company working name
Founder names and roles
One-sentence revenue model
Customer locations
Target launch date
Idea Validation Worksheet Use before creating the company.
Customer problem to solve
Target customers and territory
Founder strengths
Skills or partners still needed
First feedback or tests completed
Business Plan Checklist Minimum structure for the project.
  • Mission, products, or services described.
  • Market, customers, competitors, and positioning identified.
  • Launch milestones and timing written down.
  • Technical organisation and people resources planned.
  • Revenue, overhead, and profitability forecasts prepared.
Financing Checklist Use before fixing share capital and budget.
  • Available founder funds estimated.
  • Bank financing need assessed.
  • Guarantees and Mutualité de Cautionnement checked if needed.
  • SNCI, public aid, and grants checked before committing spend.
  • Launch cash runway and safety margin calculated.
Premises and Establishment Substance and operating environment.
Address or premises type considered
Why the premises fit the activity
Effective manager presence
Incubator, shared office, or lease
Virtual-office or letterbox risk
Mandatory Registrations After permit and incorporation.
  • RCS/LBR prepared or handled by the notary.
  • RBE prepared with beneficial owners and documents.
  • VAT/AED checked before invoicing.
  • ACD and first tax obligations tracked.
  • CCSS self-employed, manager, or employer status checked.
Support Ecosystem Who to contact depending on the need.
  • House of Entrepreneurship for project structuring.
  • House of Startups or incubator for innovative projects.
  • Mutualité de Cautionnement if bank guarantees are insufficient.
  • SNCI or public aid if financing route fits.
  • Chamber of Commerce or Chamber of Skilled Trades and Crafts depending on activity.
SARL-S Eligibility Form Stop quickly if the simplified form is unavailable.
  • All shareholders are natural persons.
  • No shareholder is a company, fund, SPV, or holding vehicle.
  • No founder already owns another SARL-S shareholding.
  • Capital is EUR 1 to EUR 12,000.
  • Activity fits SARL-S scope and permit path.
Business Permit Questionnaire Use before trading or invoicing permit-covered work.
Activity classification
Permit holder
Qualifications required
Luxembourg establishment
Effective management evidence
Incorporation Checklist SARL or SARL-S incorporation readiness.
  • Name checked.
  • Articles drafted.
  • Managers and signature powers decided.
  • Identity and compliance documents prepared.
  • Capital evidence ready.
  • RCS, RBE, VAT, CCSS, accounting, contracts, and insurance planned.
Investor-Readiness Checklist Prepare before angels, funds, or convertibles.
  • Capitalisation table and shareholder register current.
  • RBE data consistent with bank compliance records.
  • Intellectual-property assignments signed.
  • Founder shareholders' agreement ready.
  • Capital increase and approval mechanics known.
  • SARL-S conversion need checked before investor talks.
Annual Compliance Checklist Keep the company clean after incorporation.
  • Bookkeeping reconciled.
  • VAT returns filed.
  • Payroll and CCSS handled.
  • RCS and RBE changes updated.
  • Annual accounts approved within 6 months.
  • Annual accounts filed within 7 months.
SARL-S to SARL Conversion Checklist Use before growth, investors, or capital above EUR 12,000.
  • Conversion trigger identified.
  • Shareholders approve structure change.
  • Articles amended with professional support.
  • RCS, RESA, RBE, bank, tax, VAT, CCSS, permit, and contracts updated.
  • Invoices, website, stationery, and legal wording updated.
Adviser Review Sheet Items to confirm before public launch or reliance.
  • 2026 deferred-capital reform status.
  • Business permit interpretation.
  • Tax, VAT, CCSS, and employment treatment.
  • Regulated-sector authorisations.
  • Articles, shareholders' agreement, contracts, GDPR, and intellectual-property assignment wording.

Glossary

Acronyms and Luxembourg terms used throughout the guide.

SARLStandard Luxembourg private limited liability company.
SARL-SSimplified SARL for eligible natural-person founders with low share capital.
Business permitAuthorisation that may be required before the company can legally carry out the activity.
RCSLuxembourg Trade and Companies Register where companies and filings are registered.
RESAElectronic publication platform for company filings and notices.
RBERegister of Beneficial Owners, used to record natural persons who ultimately own or control the company.
AEDAdministration de l'enregistrement, des domaines et de la TVA, relevant for VAT and registration duties.
ACDAdministration des contributions directes, relevant for direct taxes such as corporate income tax.
CCSSCommon Social Security Centre, relevant for self-employed affiliation, employers, payroll, and social security.
eCDFElectronic platform used for structured financial and VAT filings.
Beneficial ownerNatural person who ultimately owns or controls the company.
FiduciaryAccounting or corporate-services provider that often helps with bookkeeping, filings, payroll, or tax coordination.

References and Review Status

These links anchor the guide to public sources. They do not replace a Luxembourg professional review for a real incorporation or regulated activity.

Source checked

Business creation journey

Idea, takeover, business plan, financing, business permit, legal structure, premises, mandatory registrations, and support ecosystem.

Open Chamber of Commerce
Source checked

SARL legal form

Minimum capital, notarial deed, shares, transfers, managers, and dissolution certificates.

Open Guichet SARL
Source checked

SARL-S legal form

Natural-person rule, one-SARL-S rule, EUR 1 to EUR 12,000 capital, private deed, and conversion trigger.

Open Guichet SARL-S
Source checked

Business permit

Professional integrity, qualifications, Luxembourg establishment, effective management, and RCS link.

Open business permit page
Source checked

Annual accounts

RCS filing, eCDF validation, approval within 6 months, and filing within one month after approval.

Open annual accounts page
Source checked

RBE beneficial owners

Beneficial-owner definition, one-month update deadline, online filing, and sanctions.

Open RBE page
Source checked

CCSS affiliation and hiring

Self-employed affiliation, managing-shareholder treatment, employer registration, and 8-day employee declaration.

Open CCSS affiliation Open CCSS hiring

Professional Review Notes

Before publishing or relying on this guide, verify sensitive items with a Luxembourg notary, lawyer, accountant, tax adviser, payroll adviser, or regulator.

Professional review required 2026 watchpoints
2026 deferred-capital reform watchpoint Treat the deferred payment of SARL minimum capital as a current-law verification item. Confirm publication, entry into force, notarial wording, RCS practice, bank evidence, and treatment of in-kind contributions before relying on it.
  • Business permits: check activity classification, qualifications, establishment, and effective management.
  • Tax and VAT: confirm current rates, exemptions, return frequency, cross-border treatment, and withholding.
  • Employment and CCSS: confirm manager status, payroll, minimum wage, working time, and cross-border cases.
  • Regulated sectors: check CSSF, CAA, health, transport, real estate, HORECA, craft, crypto, payment, and FDI screening issues.
  • Contracts, GDPR, and intellectual property: verify terms, privacy notices, processor agreements, employee clauses, and assignment wording.
Primary law

Legilux

Published legal texts, to verify final legal rules.

Official procedures

Guichet, LBR, RBE, AED, ACD, CCSS

Formalities, filings, registers, VAT, tax, and social security.

Founder journey

Chamber of Commerce

Practical creation path, support ecosystem, financing, and network.

Summaries and watchpoints

PwC and advisers

Tax, 2026 reform, employment, regulated sectors, and structuring.

  1. LegiluxOfficial legal texts and final published laws.
  2. Chamber of CommercePractical business creation journey, support ecosystem, financing, permits, and registrations.
  3. Guichet.luGovernment portal guidance and practical procedures.
  4. LBR / RCS / RESACompany filing, publication, and register practice.
  5. RBEBeneficial-owner registration and updates.
  6. AEDVAT registration, returns, exemptions, and eCDF filing.
  7. ACDCorporate income tax, withholding, and tax administration.
  8. CCSS / ITMSocial security, payroll, labour, and employer obligations.
  9. Professional advisersNotary, lawyer, accountant, payroll, tax, intellectual-property, and sector specialists.