Luxembourg: Operating a Business

Setting Up a Company

Private Limited Company (S.A.R.L.): Number of partners: Minimum 1 partners; maximum 40 partners. NB: 1 member for a sole proprietorship.
Capital (max/min): EUR 12,000, totally subscribed.
Shareholders and liability: Liability is limited to the amount contributed.
Public Limited Company (S.A.): Number of partners: Minimum two natural or legal persons, without restriction on the number of partners.
Capital (max/min): EUR 30,000 with 1/4 released at the creation.
Shareholders and liability: Liability is limited to the amount contributed.
General Partnership (SENC): Number of partners: One or more partners, no upper limit.
Capital (max/min): No minimum capital.
Shareholders and liability: Partners' liability is joint and unlimited on obligations and debts of the company.
Limited Partnership (SECS): Number of partners: Minimum 2 with no limitation on the number of partners.
Two types of partners: active partners and sleeping partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Active partners' liability is joint and several. Liability of sleeping partners is limited to the amount contributed.
Cooperative Company: Number of partners: Minimum 7 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Partners' liability is joint and several or divided, unlimited or limited to amount contributed depending on the status.

Setting Up a Company	Luxembourg	OECD
Procedures (number)	5.0	5.2
Time (days)	16.5	9.5

Source: Doing Business.

Business Setup Procedures: Consult Doing Business Website, to know about procedures to start a Business in Luxembourg.

	2018	2019	2020
Labour Force	302,757	313,152	320,185

Source: International Labour Organization, ILOSTAT database

Source: International Labour Organization, ILOSTAT database

Legal Weekly Duration: The Law allows for a duration of 40 hours per week and 8 hours per day. The daily working time may not exceed 10 hours.
Retirement Age: 65
Working Contracts: Employment contracts are regulated by law. Collective agreements and individual negotiations complement it.
The terms of the employment contracts are very rigid.
A work contract is either signed for an indeterminate period (Contrat à Durée Indéterminée/ CDI), which it is most often the case, or for a fixed term (Contrat à Durée Déterminée/ CDD). The CDD cannot last more than 24 months, including renewals. It can only be renewed twice and only if the initial contract includes a renewal clause. The Law strictly defines the framework of using a fixed-term contract. It is contracted for the accomplishment of precise and temporary tasks in a company.
Labour Laws: Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

Minimum Wage

In 2021, the monthly minimum wage in Luxembourg is EUR 2 202, according to Eurostat.

Average Wage

In 2019, the average salary in Luxembourg is €58,520 a year (OECD, latest available data).

Social Contributions

Social Security Contributions Paid By Employers:

The employer's social security contribution rate is between 12.01% and 15.06%:

pension: 8%
sickness: 2.8 - 3.05%
accident insurance: 0.675% - 1.125%
employers' mutual insurance: 0.53% - 2.88%
maximum annual income base subject to contributions: 132,115.80 euros (index 834.76).

Social Security Contributions Paid By Employees:

The employee’s part of social security contributions ranges between 12.20% and 12.45%.
Employee’s part (capped):

pension: 8 %
sickness: 2.8 - 3.05 %
maximum annual income basis subject to contributions: EUR 132,115.80 (index 834.76).

Non-tax-deductible contributions (uncapped):

Dependence insurance: 1.4 % minus a deduction of EUR535.50 per month on gross salary. No ceiling is applicable.

Social Dialogue and Involvement of Social Partners: Luxembourg enjoys a rather calm social climate. The majority of industrial workers are associated with the dominant political party. Trade unions are active in several fields but they mainly defend union interests in collective negotiations during meetings with the employer, public and social authorities. They also provide free judicial aid.
Labour Unions: LCGB
OGBL (in French)
Unionisation Rate: Around 50% in 2007.
Labour Regulation Bodies: Ministry of Labor

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