Luxembourg Insider is a new regular column that takes a deep dive into life as an expat in the Grand Duchy.
So we've gone over how to find a job, sort out your healthcare coverage, what to think about when renting a flat, and which languages to learn, but it struck me recently that we've not yet addressed a pretty significant group of people - freelancers like myself!
There are a few key steps that you will need to follow in order to get yourself fully set up as a freelance worker or self-employed in the Grand Duchy. While relatively simple, aspects of this may take longer than you would think. For me personally it took about 5 or 6 weeks all in all, but mainly because of the waiting time associated with requesting paperwork from abroad.
We’ll get into why this is in a moment, but first let’s quickly outline what we will cover in this article:
1) Obtaining a business permit
2) Choosing a legal form and registering your business
3) Getting a VAT (‘TVA’) number
4) Registering with CCSS for social security as self-employed
5) Where to get more information - lots of links!
It may not look like much, but it should be more than enough to keep you occupied for a little while. Now, sit down, strap in, and let’s get this thing started.
Obtaining a business permit
As promised, this section is all about business permits – and this is probably what will take you the longest, so get started as soon as you can. You may need a business permit regardless of which sector or industry you will be active in, and what product or services you plan on offering. Unfortunately it is quite difficult to determine whether or not you will actually need a permit, as it comes down to the precise nature of the services you intend to offer. Often this cannot be readily determined by reading available information, so the best option is to contact House of Entrepreneurship or the ministry of the economy (contact details for both at the end of this article) for further information.
To give you an example of how tricky it can be to determine whether you need a permit, it isn't necessarily only the product or service you are offering that will tell you whether or not a permit is needed; it can also come down to how and where you are offering said product/service! For instance you do not need a permit if you sell your own products, like artwork, crafts, or jam, but you do need a permit if you do so at fairs or markets. Some occupations (for example lawyers, architects, doctors, etc.) are subject to additional qualification requirements.
If you have resided in Luxembourg for 5+ years
1) A completed business permit form
2) Proof of qualification (a copy of your diploma, a relevant certificate of course completion, copy of a previous business permit)
3) Proof of integrity
- A recent copy of your criminal record in Luxembourg
- A completed sworn declaration form
5) Proof of payment of the €24 stamp duty
If you have resided in Luxembourg for less than 5 years
You will need to submit the above, and:
6) Copy or copies of recent criminal record(s) in the country or countries where you resided in the past five years;
7) A notarial declaration of non-bankruptcy
How and where to access the above documents
Business permit forms can be accessed through MyGuichet, where you can submit your application electronically, though this requires that you have a ‘Luxtrust’ electronic certificate. If you do not, or would prefer to submit a paper copy, you can obtain one by following this link.
Criminal record (Luxembourg) can also be obtained through MyGuichet if you have access to this service. If not, you can request a copy of your records by email, fax, post, or in person. For more information on how to do this, see this link.
Sworn declaration forms can be accessed here.
Proof of payment for the €24 stamp duty can be provided as an extract from your online banking if you pay directly into the relevant bank account (details on this can be found on the business permit form, including where to send the payment), or through administration de l'enregistrement et des domaines.
Notarial declaration of non-bankruptcy - do keep in mind that this is only needed if you have lived here for less than 5 years. As the name implies this is a document provided by a notary, and you can find one near you by visiting Notariat.lu. Their prices will vary, so it may be worthwhile shopping around if you want to avoid overpaying. I was generally quoted between €110 and €150.
Choosing a legal form and registering your business
At the most basic level you will need to decide between registering a sole proprietorship or a company. The fundamental difference is that your business is not a separate legal entity if you operate as a sole proprietor, and there is no distinction between your and the business’ property. This does of course increase the risk to your personal finances, but it is also the simplest, easiest, and cheapest option to get you started. More information about sole proprietorships can be found here.
To register a sole proprietorship, visit this page.
Companies (e.g. SA, SARL, SARL-S) on the other hand are separate legal entities, and your liability is limited to the amount of your contributions:
- SA – these are public limited companies, an require a minimum initial capital of €30,000. This company form facilitates access to capital markets and new shareholders. More information about SA can be found here.
- SARL – this is a limited liability company form, requiring a minimum initial capital of €12,000. Ownership of shares cannot be freely traded. More information about SARL can be found here. https://guichet.public.lu/en/entreprises/creation-
- SARL-S – this is a simplified form of the SARL form, which can be started with as symbolic initial capital of €1. More information about SARL-S can be found here.
Registering a company is more complex than getting set up as a sole proprietor, and requires further information such as constitutional documents, articles of association, and (except for in the case of SARL-S) the services of a notary. For more information and to get started, follow this link.
Getting a VAT (‘TVA’) number
While the Guichet website suggests, depending on how you read it, that you don't need to register for a VAT number unless your turnover is expected to be over €30,000 over the course of a year, this is actually a bit of a miscommunication. You do need to register with AED (the tax office) if you intend on starting a commercial activity of some kind, but you don't have to charge VAT. If you are offering a "b2b" or business-to-business service/product, there is really no reason why you would not charge VAT regardless of what your turnover is going to be. Rather, the VAT exemption for companies and sole proprietors is aimed more at those of you who sell direct to individual customers, as it allows you to play a bit more with the prices and generate a higher income up to a certain point. That said, you do still need a VAT number, but at the end of the year you will submit a simplified VAT return declaring that you are below the VAT threshold. The VAT rate for most services in Luxembourg is 17%.
Obtaining a VAT number is rather straight-forward, and again can be done through MyGuichet by following this link.
If you do not have access to MyGuichet, you should contact AED (Administration de l’Enregistrement et des Domaines), who handle VAT registrations, for further information.
If you are trading as a sole proprietor, all you will need to do is fill out the form and provide a copy of your ID/passport. The VAT number will be sent to you by post within a few days.
Getting registered with CCSS
We discussed the importance of being properly set up with CCSS in part three of the guide. If you are registered as a sole proprietor this is surprisingly simple. Once you have submitted your application to become registered as a sole proprietor the CCSS will be automatically notified, and you will in turn receive a letter stating that you should pop over to their offices (125 route d’Esch, L1471, Luxembourg city) to pick up your final paperwork. All you will need to bring along is your ID and the letter itself, and you’ll be good to go within a few minutes.
While there are exceptions based on how much income you generate – and the CCSS representative will make sure you don’t end up over-paying when you collect your paperwork from them – you can expect to pay 25% of your gross salary in social fees.
Where to get more information
While this is a theoretically straight-forward process, there are plenty of potential stumbling blocks along the way. Luckily there are lots of people you can contact to get further information, though!
The House of Entrepreneurship was set up specifically to help people who want to start their own business, and their advisors will be able to answer most of your questions either over the phone or in person at their offices. If they can’t, they will certainly know who can. Visit their website or call them on +352 42 39 39-330.
Guichet has lots of information on every step of starting a business on their website, with links that will take you straight to relevant forms and so on.
Business permits are issued by the ministry of the economy, their website is only available in French, but you can also reach them on +352 247-84137
VAT numbers are issued by AED and unfortunately their website is, like that of the ministry of economy, only available in French. You can also give them a call on +352 80800
For anything to do with social security you can contact CCSS on the number +352 40 14 11, or by visiting their website.
Martin Jonsson moved to Luxembourg in October in 2016, before which he lived in Edinburgh, Scotland, for 10 years. He's a freelance journalist and RTL Today contributor.