Owning our own company or being our own boss is a dream for many of us. Sadly, lack of stability and worry over risk often means that particular dream doesn’t become a reality. However, here in Luxembourg, you may find your opportunity comes a-knockin’. In the first of our regular series, ‘How the fuck do I…?’, we discuss the basics of just getting your idea off the ground. After all, we’ve got to start somewhere.
First piece of advice from entrepreneurs will always be ‘do something that you love‘. Read any of the interviews from our magazine full of entrepreneurial LUX WMN and it is the one common theme. You will dedicate long hours and sacrifice a great deal to make this idea just happen, let alone be successful, so you must love your product of service with a passion.
Now, do your research. You have an idea; that’s wonderful – is anybody interested? There are numerous ways of measuring success and not everything needs to just make money, but if that is one of your goals then you need to know your product and the landscape. Ask questions, read up, reach out to your network. Luxembourg is going through an economic transition and the government is keen to support an engaged entrepreneurial scene, which means there is help out there for you.
Then transform this research into a concise business plan that includes facts, figures and projections. Get it down on paper; you’ll undoubtedly come across some surprises. Right now, legal status; what are you going to be? Sole proprietorship means more flexibility and less paperwork, but you assume all the risk and commit your personal assets. Or a more commercial option including a limited liability company (SARL) under the guise of a partnership or société de personnes (S.N.C), or a public limited company (PLC) where the partners’ liability is limited to the amount of their contributions.
You also need to check the company name is available. Your request can be submitted online to the Luxembourg Business Register (go to lbr.lu; you’ll need to LuxTrust token. When in Luxembourg do you not need your token?) and once it has been processed you have 20 days to download the certificate of availability (libre).
You now need to start making this a reality and you’ll need to apply for a business permit issued by the Ministry of the Economy. To obtain one you need to reside in the EU, have the necessary qualifications, a clean, professional reputation (you will need a notary to sign a statement and a small fee is involved), and a fixed and suitable place of operation.
Now for more admin: visit the Centre Commun de la Securite Sociale (CCSS) to register for social security. If your total income as an entrepreneur is less than ¢666.20 (monthly), you can choose not to pay this, but you may receive reduced benefits. If you plan to live off your business -after all that’s the whole point – then you will likely pay 25% of your taxable income in social security. You also need to register for VAT, which you can do by submitting an initial declaration to the Land Registration and Estate Department. It is your responsibility to collect this dollar from your clients and transfer it into the government! Other taxes? Yep, the Luxembourg Administration des contributions directes (ACD) will contact you about income tax. Yep, taxes; and you thought you would be working for yourself!
These are essentially your admin basics – we need to talk financing, launching, hustling, all sorts – but we can save that for future editions. Hopefully you have enough here to just get started. Just do it. Now.
For lots of great information, go to guichet.public.lu/en/entreprises/creation-developpement.html.
This article was written for LUX WMN, Issue #1 by Charley Larcombe.