Registered address of a company
Setting up a business requires designating an address as head office. This choice is not to be taken lightly because Luxembourg law regulates where businesses can be registered.
Where to register a business?
In principle, the head office of a business is located where its main establishment is located1.
For businesses with business licenses (commercial, craftsmanship, industrial and service companies) the main establishment must meet certain administrative criteria of space and consistency2 :
- Commercial companies must show that they have a store or warehouse; and if they do not, they must demonstrate that they only need an office to trade.
- Craftsmen must have a workshop or a warehouse if their activity does not necessitate a workshop (road works…).
- Services companies must have an office.
A real physical infrastructure is necessary for registering a business. A simple “mail box” is not possible. It is not possible to rent a mail box and register a company at that address.
Only patrimonial companies (SOPARFIs and SPFs) and dormant companies (companies that have temporarily suspended their activity) can be registered at the address of a service provider. That service provider must be a professional3 such as a bank, a notary, a certified professional accountant, an attorney…
Registration at the address of the manager
Managers of very small companies (for example, sarl-s and sarl with only a single partner) can be tempted to register their company at their private address to limit expenses.
This choice is theoretically possible since the law authorizes a company to be register at the address of its manager4. However, the place needs to have an office, a workshop or storage space to meet business license requirements5.
Municipal regulations (and co-ownership regulations) must allow the exercise of a professional activity at that address. And it must not be contrary to any tax obligation undertaken by the owner of the property.
This, if the manager is a tenant, he will have to request from the landlord a written permission to register his company at the address. The landlord will be able to legitimately reject the request in the following cases:
- If municipal regulations forbid professional activity at the address;
- If the co-ownership agreement forbids the exercise of a professional activity at the address;
- If the landlord was granted a reduction in notary fees against the commitment to reserve the property for housing purposes;
- If the landlord has carried out construction works and obtained a reduction in VAT against the commitment to reserve the property for housing purposes;
- If the landlord can benefit from the 6% amortization rate. The 6% rate is reserved for private persons (or SCIs held by private persons) who lease new property for housing purposes. The landlord would lose the advantageous 6% rate if the place was used for professional purposes.
If the manager is also the owner of the property, he will need to check if all conditions are met so to avoid being called into question.
1Article 2 of the modified law of August 10th 1915 on commercial companies : “The head office of any commercial company is located at the place of central management of the company. The place of central management is deemed to be the head office until proved otherwise.
2Article 5 of the law of September 2nd 2011 regarding the access to crafts, commercial and industrial activities as well as access to certain liberal professions.
3Article 1 of the law of May 31st 1999 on the registered address of companies.
4Paragraph 4 of Article 1 of the law of May 31st 1999 on the registered address of companies.
5Article 5 of the law of September 2nd 2011 regarding the access to crafts, commercial and industrial activities as well as access to certain liberal professions.