BUSINESS LICENCE IN LUXEMBOURG : WHAT FOREIGN ENTREPRENEURS NEED TO KNOW

Setting up a business in Luxembourg comes with a requirement that catches many foreign entrepreneurs off guard: the business licence, known in French as the autorisation d'établissement.

Without it, you cannot legally operate. And yet, it is one of the most frequently overlooked steps in the setup process.

building with a clear blue sky

Who needs a business licence ?

A business licence is required for most operating businesses in Luxembourg, including commercial activities, craft trades, industrial activities, and certain regulated professions such as architects, chartered accountants, and surveyors.

Lawyers, doctors, and other medical professionals fall under separate licensing regimes. Holding companies are exempt as they do not carry out direct commercial activity and therefore fall outside the scope of the requirement.

Three Conditions You Must Meet

1. Physical premises suited to your activity

You need a real place of business — owned, leased, or sub-leased — that is appropriate for the nature of your activity. A domiciliation address or a virtual office will not do. This applies equally to digital businesses: Luxembourg law makes no distinction between online and offline activities. If your activity requires a business licence, physical premises are mandatory — full stop.

2. A physically present daily manager

The business licence must be held by the person who effectively manages the company on a day-to-day basis, and that person must be physically present at the business address in Luxembourg. A remote manager based abroad does not meet this requirement.

3. Professional qualifications and integrity

Depending on your activity, the licence holder must demonstrate relevant professional qualifications and a clean professional track record.

The Most Common Mistakes

• Assuming a domiciliation is enough. It is not — and this misconception alone causes significant delays for many foreign entrepreneurs.

• Appointing a manager who will not be physically present. Remote arrangements do not satisfy the legal requirement, regardless of how the role is structured contractually.

• Not checking upfront whether a licence is required. The answer is not always yes — but assuming you are in the clear without verifying can cost weeks at launch.

Conclusion

The business licence sits at the foundation of your Luxembourg setup. Getting the conditions right from the start (premises, manager, qualifications) is far less costly than correcting them after the fact.

NEHA Law advises foreign companies and entrepreneurs on setting up and grow in Luxembourg. Not sure whether your business requires a business licence or what conditions apply to your situation? Get in touch.