How to become your own boss in Luxembourg?

You want to create your own company and become your own boss? You have deeply analysed the market and the competition and discovered key needs to whom you can bring an added value? You have drawn up your business plan and build your market strategy? You have found the necessary funding to set up your own business? Perfect. Now it is time to launch yourself in the adventure. But how to proceed? Is it so complicated to become self employed in Luxembourg?

First of all, you have to obtain a business permit (commonly known as autorisation de commerce). For this, you have to satisfy the following conditions: professional qualification in line with the activity and resources to effectively manage the business. In some cases, you have to prove that your business will have a positive impact on the Luxembourgish economy, for example by creating new jobs. Then you have to choose the legal form of your business. If you are alone, you can choose between a sole proprietorship (self employed person), a ‘single member” limited liability company (SARL unipersonnelle) and a ‘single member’ public limited company (SA unipersonnelle). Each legal form has its own advantages and disadvantages. It is up to you to decide what is the best for you.

To help you making your decision, you can seek assistance from the Espace entreprises of the Chamber of Commerce or the Contact entreprise of the Chamber of Trades. The range of services provided free of charge includes business support, access to a profession and commercial, social and legal assistance and advice. It could be very helpful because you have to fulfil some administrative formalities such as the initial declarations with the tax authorities and the registration with the Luxembourg Trade and Companies Register.

As a self-employed person, you are required to affiliate with the Joint Social Security Centre (Centre commun de la sécurité sociale – CCSS) which handles the collection of contributions for the different insurance funds (sickness, invalidity, retirement, etc.). Contrary to what one might think, the main advantages of being self employed in Luxembourg are not fiscal, but social. As a self-employed person, your social protection is almost the same as if you were a salaried employee:

• like a salaried employee, you have the right to maternity and parental allowances;
• from the age of 65, you can benefit from a full retirement pension provided that you can prove that you have been insured at least during 120 months;
• you can receive an early retirement pension provided that you fulfil all the conditions required. The amount is based on the contributions made during the active period and adapted to the cost of life;
• you can receive an invalidity pension if, for health reasons, you have to stop your professional activities before the legal age of retirement;
• if you voluntarily join the employers’ mutual insurance scheme (Mutualité des employeurs), you can receive allowances in case of loss of income due to sickness;
• if you have to stop your activity due to financial and economical difficulties, medical reasons, an act of a third party or in case of force majeure, you have the right, under certain conditions, to unemployment benefits.

If you consider all what is mentioned above, you can think that it is too much for you to handle. Think again because it is in reality very quick and simple. Except particular situations, you can fulfil all the administrative procedures between only two and four weeks. Now it is time for you to build your own successful business!

11/2021