Acquisition or incorporation
Two routes to a Luxembourg company, and the annual services that follow.
Request informationAcquire an existing company or incorporate a new one?
Both routes lead to a Luxembourg company. The right choice depends on your timing and on how much of the structure you want to tailor.
| Acquire an existing company | Incorporate a new company | |
|---|---|---|
| Starting point | The company already exists and is registered. Ownership is transferred by a transfer of shares. | The company is created for you: name, articles of association, share capital and registration. |
| History | The company has a past. Its situation (accounts, liabilities, activity) should be verified before acquisition. | No past, no inherited liabilities. |
| Customisation | Name, corporate object and governance can usually be amended after the transfer. | Designed from the start around your project. |
| Compliance | Identification (KYC) of the new owner and beneficial owners is required. | Identification (KYC) of the owners and beneficial owners is required. |
| Business activity | Any commercial activity may require a business authorisation, in both cases. | Any commercial activity may require a business authorisation, in both cases. |
For a new incorporation, we do not incorporate companies ourselves: we introduce you to independent professionals (notary, registered office provider, accountant) who handle the process.
Annual services for the company
A Luxembourg company has recurring obligations. Whatever the route, it needs professionals to stay compliant. We introduce you to independent providers for:
- Registered office (domiciliation) in Luxembourg
- Bookkeeping, annual accounts and tax returns
- Filing of annual accounts and register updates
- Director, manager or chairman mandates, where needed
- Auditor (commissaire aux comptes or réviseur), where required
- Compliance follow-up (beneficial owners register, KYC)
The services are provided and invoiced by the professionals themselves.
Advantages and drawbacks
Depending on the company and on what the parties agree, each route presents the following advantages and drawbacks.
Incorporating a new company
+
- No disputes and no debts
- A tailor-made project
- Lower price than an acquisition
−
- No history
- No confidentiality
- Share capital to be paid up
- KYC and bank fees, notary fee
- Time needed to set up
- Risk of refusal to open a bank account
- Taxation from the first euro of profit
- Compliance and beneficial owner identification documents
Acquiring an existing company
+
- Benefit from the shareholder current account
- Confidentiality
- Tax losses carried forward
- Liability guarantee
- Bank account available
- No capital deposit required
- Articles of association can be amended
- Company available on the first day
−
- Higher cost than incorporation
Choice of legal form
Luxembourg offers several options, such as the S.à r.l., the S.A. or the S.A.S.
Each form has advantages and drawbacks depending on your objectives, the number of partners, the capital required, the degree of confidentiality you want and the responsibilities of the directors. The right choice follows your strategy.
What parties usually consider when pricing an existing company
No debts, but losses carried forward
A debt-free company reduces the buyer's risk. Losses carried forward can offset future profits and may justify a higher price.
Shareholder current account
A credit current account can be repaid to the purchaser as the repayment of a debt rather than as a dividend distribution.
Liability guarantee
Protects the buyer against liabilities not identified at the time of the sale.
Active bank account
An active account is generally part of the sale and avoids a new account opening for a non-resident owner.
The price is freely agreed between buyer and seller. These are factors parties commonly take into account. No service is included in the sale: we do not provide any.
Substance requirements
A Luxembourg company that carries out financing activities should have a real presence in Luxembourg, so that its effective place of management is in the country.
Board of directors
At least half of the decision-making directors are resident in Luxembourg or work there, with sufficient knowledge and real authority to act. They are not mere nominees.
Decision-making
Key management decisions are taken in Luxembourg and properly documented. Decisions may be prepared abroad but must not simply be rubber-stamped.
Personnel
Qualified personnel able to execute and record the transactions, employed or outsourced to qualified Luxembourg providers that the company supervises.
Tax residence
The entity must not be regarded as tax resident in another State.
Tell us what you are looking for
Identified requests only. We reply to every request from an identifiable person.