A business plan is an essential tool to help you structure and plan your entrepreneurial project. It allows you to clarify your objectives, anticipate your financial needs and define your strategy. It must include, in particular:

• the legal form intended for your business;
• the characteristics of the sector of activity;
• financial forecasts; and
• the human and technical aspects of the project.

Various advisory services are available to support you in your entrepreneurial project.

The House of Entrepreneurship is a key point of contact for personalised support.

Other specialised bodies, such as:

• Luxinnovation;
• the Chamber of Skilled Trades and Crafts.
• the Chamber of Commerce;
• the Start-up Luxembourg platform;
• the House of Startups;

can also guide you based on your profile and your sector of activity.

In addition, it is recommended that you take specific training courses on setting up a business. In this regard, the Luxembourg Lifelong Learning Center portal offers a wide range of training courses tailored to different profiles and levels of progress.

In addition to your own funds, you can also apply for a medium- or long-term bank loan to finance your project. Other financing solutions may be taken into consideration, depending on the nature and maturity of your business, such as:

• mezzanine financing;
• crowdfunding; or
• foreign investment.

Please note: you are obliged to inform the Ministry of the Economy of any foreign investments if your activity falls within a sector that is considered critical.

Business permit

Before starting your business, it is important to check whether a business permit is required. In general, a business permit is necessary for the following activities:

• skilled craft or industrial activities;
• commercial activities;
• liberal professions.

The permit application must be sent to the General Directorate for SME, Craft and Retail of the Ministry of Economy (Direction générale PME, artisanat et commerce du ministère de l’Économie). Specific conditions may apply depending on the profession in question (qualifications, experience, integrity, etc.). Therefore, it is recommended that you find out in advance to ensure that your application complies with the conditions.

To obtain a business permit, you must prove your professional integrity. The purpose of this requirement is to ensure the business is conducted with integrity and to protect future partners and customers.

The General Directorate for SME, Craft and Retail checks the professional integrity when the authorisation is made.

When setting up your business, you may be asked to provide an extract of your criminal record certifying that you have no convictions or prosecutions against you. This document is free of charge and can be obtained from the Criminal Records Department, either online or in person in Luxembourg City.

If you are planning to work as a self-employed person, you must register with the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS) as soon as you receive your business permit. This registration is essential in order to benefit from social security cover as a self-employed worker (health insurance, pension, etc.).

In addition, you also have the option to join the Employers' mutual insurance scheme on a voluntary basis in order to benefit from additional protection in the event of sickness or incapacity for work. This membership can be particularly useful for securing your income in the event of unforeseen circumstances.

Your business must be registered with the Trade and Companies Register (Registre de commerce et des sociétés - RCS). Registration is mandatory, whether you operate as a natural person (sole proprietor) or as a legal person (company). This procedure can be carried out online or in person, whichever you prefer.

Registration fees vary depending on the legal form selected for your business. It is recommended that you find out in advance about the applicable costs and the documents required with regard to your specific situation.

If you plan to hire staff, you must carry out certain administrative procedures to ensure that your business complies with Luxembourg legislation. In particular, you are obliged to:

• submit an operating declaration (déclaration d'exploitation) to the Joint Social Security Centre (CCSS). This procedure will enable you to obtain an employer registration number (or employer national identification number), which will remain valid for the entire lifetime of your business. In the event of a change in the legal form, you must submit a new application;
• register with the Accident Insurance Association (Association d’assurance accident - AAA) and the Employers' mutual insurance scheme (Mutualité des employeurs - MDE) to ensure you are covered for occupational risks and sick leave.

You will also be automatically registered with the Multi-Sector Occupational Health Service (Service de santé au travail multisectoriel - STM), unless you choose to join another accredited occupational health service.

Before hiring, it is essential to understand the main rules of Luxembourg labour law, which govern the relationship between the employer and employee.

Types of contracts

There are 2 main types of contracts:

• a CDI (permanent employment contract), which ensures stability and continuity;
• a CDD (fixed-term employment contract), which is reserved for specific or exceptional needs.

There are also temporary employment contracts or specific types of contracts, such as a temporary loan of labour.

Working time

The legal working week is 40 hours. However, this can be adjusted under certain conditions (e.g. part-time employment contract, half-time work, etc.).

Leave

Every employee is entitled to at least 26 working days of paid leave per year. Leave for personal reasons may be added (birth, marriage, death, etc.), as well as specific provisions such as parental leave or leave for family reasons.

Working conditions

As an employer, you must provide a healthy and safe working environment, comply with occupational health regulations, and ensure non-discrimination and equal treatment.

By incorporating these measures at the start of your hiring process, you not only ensure your business' legal compliance, but also provide a transparent, fair and motivating work environment for your future employees.

When you begin your activity, your business must be registered with the Luxembourg Inland Revenue (Administration des contributions directes - ACD) in order to meet its tax obligations. This registration is mandatory, whether you operate as a sole proprietorship or as a company.

The ACD will assign you a tax identification number, which is required for:

• declaring your professional income;
• determining your annual tax obligations.

The procedures may vary depending on the legal form of your business.

In principle, as an entrepreneur or self-employed person, you are a taxable person subject to VAT. Registration is:

• mandatory if you exceed the turnover thresholds set by the law;
• optional if you benefit from the small enterprises exemption scheme but still wish to reclaim VAT on your business purchases.

To register, you must submit an initial declaration to the Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA - AED).

As soon as your business is registered, it will be assigned its own VAT number.