Corporate law
Setting up a company in Luxembourg as a foreign national or non-resident in 2026
Quick answer
Yes, a foreign national or non-resident can set up a company in Luxembourg and hold 100% of it: no nationality or residence condition is required to be a shareholder. An EU/EEA or Swiss national is free to settle. A non-EU national who wants to manage the company locally needs a residence permit.
Luxembourg imposes no nationality or residence condition for being a shareholder of a company: a non-resident can hold 100% of it. The difference arises at the stage of management and settling in the country. An EU/EEA or Swiss national is free to move and settle. A non-EU national who wants to manage the company and live locally needs a residence permit. In all cases, commercial activity requires a business permit, and bank KYC remains the longest step. See also setting up a company in Luxembourg.
In short
- No nationality or residence condition for being a shareholder: 100% ownership by a non-resident is possible.
- EU/EEA or Swiss national: free to settle and manage, without a residence permit.
- Non-EU national wishing to manage locally: residence permit (self-employed worker or investor) required.
- Business permit needed for commercial, craft and liberal-profession activities.
- Bank KYC is the longest step for a non-resident: prepare the supporting documents in advance.
- Genuine substance (office, director, accounts) is recommended for tax purposes.
| Question | EU / EEA / Swiss national | Non-EU national |
|---|---|---|
| Being a shareholder and holding 100% of the capital | Yes, freely | Yes, freely |
| Nationality or residence condition for being a shareholder | None | None |
| Managing remotely through an established director | Yes | Yes |
| Settling and managing locally | Free, without a residence permit | Residence permit required |
| Business permit (commercial activity) | Required for the director | Required for the director |
| Enhanced bank KYC for non-residents | Yes | Yes |
Foreign national or non-resident: what Luxembourg law really says
The first misconception to correct: setting up a company in Luxembourg is not reserved for residents or for Luxembourg nationals. Luxembourg law imposes no nationality or residence condition for being a shareholder of a company. A non-resident can therefore hold 100% of the shares of a Luxembourg company, with no compulsory local shareholder.
The real dividing line lies not at the level of ownership of the capital, but at the level of management and physical settlement. Holding a company and managing it from Luxembourg are two separate questions, and this is where EU or non-EU status changes everything.
For the fundamentals (company forms, capital, steps), refer to the guide setting up a company in Luxembourg. This article focuses on what is specific to the foreign national and the non-resident.
Holding 100% of the capital without residing: the principle of the non-resident shareholder
Being a shareholder means contributing capital and holding shares. In this respect, Luxembourg is one of the most open environments in Europe: no national capital quota, no obligation to have a resident shareholder, no cap on foreign ownership.
Typical example: an entrepreneur based outside Luxembourg wishes to set up a SARL to invoice services in Europe. They can be its sole shareholder, hold 100% of the shares and sign the articles of association remotely through a representative, without ever transferring their residence.
This openness also applies to holding structures. A SOPARFI can be wholly owned by non-residents, which makes it a classic holding company vehicle for international investors.
EU or EEA national: freedom of establishment applies in full
If you are a national of a Member State of the European Union, of the European Economic Area or of Switzerland, you benefit from freedom of movement and freedom of establishment. In concrete terms, you can settle in Luxembourg, manage a company there and carry on a business there without a specific residence permit.
For a stay of more than three months, you simply register with the commune of residence within three months of your arrival; a registration certificate is then issued to you. No prior immigration authorisation is required to start a business.
There is nevertheless one formality not to be confused with immigration: the business permit for commercial activities, discussed below. It concerns all directors, whether they are EU nationals or not.
Non-EU national: residence permit to settle and manage locally
The situation differs for a national of a third country (outside the EU/EEA and Switzerland) who wants not only to hold, but also to settle in Luxembourg to manage their company there. Holding the shares remotely remains free. On the other hand, residing and acting as a director locally requires an appropriate residence permit.
Two main routes exist: the residence permit for a self-employed worker, and the residence permit for an investor. The choice depends on your project, the amount invested and the nature of the activity. These procedures fall under immigration law and are prepared ahead of incorporation.
To scope these pathways, see our pages on residence through investment in Luxembourg and entrepreneur immigration to Luxembourg, and where needed the support of an immigration lawyer in Luxembourg.
Holding remotely or managing locally: two projects, two regimes
The most useful distinction for a foreign national is between holding and managing locally. As long as you limit yourself to holding shares and entrusting management to a director already established in Luxembourg, you need no residence permit, even from outside the EU.
The need for a residence permit arises as soon as you want to settle physically in Luxembourg to run the business day to day. It is this move of your working life to the territory, and not mere ownership of the capital, that triggers the immigration requirements for a non-EU national.
Typical example: a non-EU investor sets up a 100%-owned holding company, without settling in Luxembourg, and appoints a resident director. No residence permit is required. If they later decide to settle in Luxembourg themselves to manage the structure, they will then have to apply for a residence permit.
The business permit: a prerequisite for commercial activities
Regardless of nationality, carrying on a regulated commercial, craft or liberal-profession activity in Luxembourg requires a business permit issued by the Ministry of the Economy. It is issued to the business, on the basis of the qualifications and good repute of the person who handles its effective management.
The designated director must demonstrate a qualification or experience suited to the activity, professional good repute (honorabilité professionnelle), and a genuine and permanent link with the business. This permit is required of an EU national director and of a non-EU director alike.
The business permit is not a residence permit: they are two separate procedures, sometimes to be pursued in parallel for a non-EU national who settles in Luxembourg.
Bank KYC: the longest step for a non-resident
In practical terms, the most frequent obstacle is neither company law nor immigration, but opening the bank account and depositing the capital. Luxembourg banks apply particularly rigorous Know Your Customer (KYC) and anti-money-laundering procedures.
For a non-resident, the bank examines the source of funds, the identity of the beneficial owners, the economic coherence of the project and the links with Luxembourg. Bank KYC is the longest step in a non-resident's project and can determine the whole timetable, since the deposit of the capital in principle precedes the signing of the articles of association. Since 2 June 2026, however, payment of the capital subscribed in cash may be deferred for up to twelve months after incorporation if the articles of association so provide.
Anticipating this step changes everything: a complete file, translated supporting documents, a clear description of the activity and of the expected flows. It is often the quality of the file sent to the bank, more than the company form, that determines the real time needed for incorporation.
Substance and central administration: why an effective presence is recommended
Being able to hold a company without residing does not mean that an empty shell is enough. For tax purposes, genuine substance in Luxembourg is strongly recommended so that the company is recognised as being effectively managed and taxed there.
Substance takes the form of concrete elements: a head office with real resources, one or more directors who are present and competent, accounts kept locally, decisions taken in Luxembourg and a coherent economic activity. Conversely, a structure run entirely from abroad is exposed to challenges to its tax residence.
For holding structures, these requirements are central: see the page dedicated to the SOPARFI, where substance determines access to the preferential regimes and security in dealings with foreign authorities.
The concrete steps for a non-resident, from the project to the RCS
The sequence remains that of a standard incorporation, but for a non-resident each step calls for more thorough preparation. The starting point is defining the activity and choosing the company form; then, depending on the profile, the residence permit and the business permit are secured.
Next comes the banking side: opening the account, KYC and depositing the capital (unless deferred payment is provided for in the articles), followed by the signing of the articles of association before a notary (except for a SARL-S, which can be set up by private deed), which is possible remotely through a representative. The company is then registered with the Trade and Companies Register (RCS) and its beneficial owners declared to the Register of Beneficial Owners (RBE), and only then are VAT and social security activated.
For the detail of the general steps and costs, the guide setting up a SARL in Luxembourg: steps serves as the reference, to be read alongside the non-resident specifics set out here. Drafting the company's articles of association deserves particular attention when the shareholders are abroad.
Choosing the right company form for your profile as a foreign national
The choice of form does not follow rules specific to foreign nationals, but certain configurations come up often. The private limited liability company (SARL) suits the entrepreneur who wants limited liability and simple governance, including with a sole non-resident shareholder.
The public limited company (SA) is aimed rather at projects with several investors or a high capital requirement, with more formal governance. The SOPARFI, which is not a separate form but a SARL or SA whose purpose is holding participations, is the vehicle of reference for international investors.
The right reflex is to start from the project (operating activity, holding of participations, group structuring) and the profile of the shareholders before settling the form. A firm practising company law in Luxembourg aligns company form, governance and immigration status.
Common mistakes of foreign and non-resident founders
The first mistake is to confuse holding and management: believing that a residence permit is necessary to hold shares, whereas it is only necessary to settle and manage locally as a non-EU national.
The second is to underestimate bank KYC and to start the notarial procedures before securing the bank, which blocks the deposit of the capital. The third is to neglect substance, by setting up a purely remote structure that proves fragile from a tax perspective.
Finally, many forget the business permit for commercial activities, or appoint a director who does not meet the qualification and good repute conditions. Securing these points upfront avoids refusals and costly delays.
Getting support: corporate lawyer and immigration lawyer
A project by a foreign national or non-resident cuts across several areas: company law, tax law and, for non-EU nationals, immigration law. Support consists in coordinating these areas so that they progress coherently rather than in silos.
On the corporate side, a corporate lawyer in Luxembourg structures the form, the articles of association and the governance. On the residence side, an immigration lawyer in Luxembourg secures the permit suited to the entrepreneur or investor profile.
The objective is simple: align ownership, management, residence and substance from the design stage, for a solid structure that withstands bank scrutiny as well as tax audits.
| Step | Point of attention for the non-resident | Indicative timescale |
|---|---|---|
| Define the activity and the company form | Align with the immigration status | Variable |
| Residence permit (non-EU, settling in Luxembourg) | Self-employed worker or investor | Several weeks to months |
| Business permit | Qualification and good repute of the director | 1 to 4 weeks |
| Opening the account and depositing the capital | KYC: the longest step | Several weeks |
| Signing the articles of association (notary) | Possible remotely through a representative | 1 day |
| RCS registration and RBE declaration | Beneficial owners to be documented | 1 to 5 days |
Depending on your profile
For EU/EEA or Swiss nationals
You benefit from freedom of establishment: you can settle in Luxembourg and manage a company there without a residence permit. Registration with the commune within three months of arrival is sufficient. Remember the business permit for commercial activities and bank KYC.
For non-EU nationals
Holding 100% of a Luxembourg company remains free, even without residing there. To settle and manage locally, plan for a self-employed worker or investor residence permit, to be prepared in parallel with the incorporation.
For international investors
You can wholly own a SOPARFI or a SARL without residing in Luxembourg. The key is substance: a genuine office, director and accounts in Luxembourg to secure tax residence in dealings with foreign authorities.
For online entrepreneurs
You can set up a Luxembourg company from abroad and hold 100% of it. Anticipate bank KYC, check the business permit linked to your activity and take care of substance if management is remote.
Official sources
Update history
- : Residence formalities for EU citizens clarified (registration within three months), Switzerland added, category of residence permit corrected to self-employed worker, and holder of the business permit corrected.