ESTABLISHING A BRANCH OR AN AFFILIATE IN LUXEMBOURG

Luxembourg branch of a foreign company

Setting up a corporate branch in Luxembourg is carried out through private deed recorded in the Trade Register and published in the Memorial. A branch does not have its own share capital or own moral personality independent from the main company on which it depends. As a result, it cannot go bankrupt or into liquidation, but rather that is the responsibility of the main company under which it is held.

A foreign company which opens a branch in Luxembourg must obtain a trade license from the General Directorate for SMEs and Entrepreneurship of Luxembourg.

The branch is represented and managed by a trustee which has the same responsibilities as a manager or administrator of a company.

Luxembourg affiliate of a foreign company

In contrast to a branch, an affiliate has its own moral personality, independent from that of the parent company. The business of the affiliate can be the same or different from that of the parent company.

A Luxembourg affiliate often takes the form of a SA or a SARL company (PLC or LLC). Establishing an SA or SARL must be carried out by a notary.

The minimum capital of an SA is 31,000 EUR (paid up at a minimum of 25%) and 12,500 EUR (paid up in full) for a SARL.

An affiliate can go bankrupt or undergo liquidation. The parent company is responsible only as far as the contribution it has made.
A Luxembourg affiliate is subject to the same formalities as all Luxembourg companies (publication of the financial statements¹, tax returns...) and must also obtain a trade license.

¹ Certain affiliate are nevertheless, under certain limited circumstances, not required to file their financial statements with the Trade Register. For more information please see "Précis de droit comptable" by Denis Colin (Editions Legitech, page 158. Available in French).