Business licenses in Luxembourg
In order to engage in a professional activity (commerce, craftsmanship, services, industry…) in Luxembourg, it is mandatory to be in possession of a business license [1] (sometimes called trade authorization or authorization of establishment).
The BUSINESS LICENSE is mandatory, regardless of the company’s legal form
The business license is mandatory, no matter the company’s legal form: SA (PLC), SARL (LLC), SARL-S, sole-proprietorship…
The formation of SARL-S company or a sole proprietorship starts by applying for a business license, which is necessary to register to the Trade Register. SAs and SARLs can registered with the Trade Register before receiving the business license but they are not allowed to perform any operational, commercial or artisanal activities as long as they have not been granted the license in due form.
The business license is in effect a holy grail which allows a Luxembourg company to operate, hire, issue invoices…
Granting conditions
A business license is granted by the Ministry of Finance based on an application which allows them to evaluate:
- If the business leader is competent for the task. In practice, the candidate must prove the competence of its manager:
- Either by his experience in the activity requested;
- Or by presenting the adequate degree for professions were a degree is mandatory (surveyor, advisor, real estate agent…), particularly when the manager is not eligible for the second chance scheme.
- If the manager is respectable. Respectability of the manager is proved by a double investigation which aims at verifying:
- That on the one hand the manager has not been sentenced for economic offenses or crimes (misuse of a company’s asset, embezzlement…)
- That on the other hand the manager has not been jeopardized in bankruptcies in which his liability can be engaged.
- If the company has got the necessary equipment for its activity. Practically, this means that a commercial or services company has got a furnished office or that an artisanal company has got a workshop.
The Ministry of Finance also requires the authorized manager to live either in Luxembourg, or in a border region of Luxembourg, or at minimum in a geographical area close enough as to allow him to personally run the day to day operations of the business.
The Professions
Some professions are ruled by the right of establishment: architect, surveyor, urban planner, accountant, engineer, Certified Public Accountant…
Other professions are not covered by the right of establishment but are subject to specific regulations: doctor, auditor…
Other professions that are neither subject to the right of establishment nor to specific regulations are accessible without specific formalities: sophrologist, statistician…
[1] Law of September 2, 2011 regulating the access to craftsmanship, commerce and industry as well as specific intellectual professions.
