Luxembourg has many opportunities for companies looking to expand overseas, with strong banking, steel, and IT sectors and a growing economy. Staying ahead of payroll and compliance requirements is vital to your success.
There are several types of companies that can be established in Luxembourg, including general partnerships, co-operative companies, and private limited liability companies. Branches of foreign companies operating in Luxembourg must register yearly with tax authorities. Local companies are registered with the Tax Office.
Corporate tax rates range from 15-20% based on taxable income each year, and municipal taxes may also be required depending on business activities. There are many payroll and labor considerations in Luxembourg:
- Minimum wage is €15.53 per hour for skilled workers, €12.94 for unskilled workers
- Employment contracts should be written
- Collective Bargaining Agreements are determined at the industry and company levels
- New hires must be registered with the Centre Commun de la Sécurite Sociale (CCSS)
- Businesses must complete an employer declaration and submit to the CCSS to obtain a business membership certificate and a registration number
- Payroll taxes are withheld from employee pay and must be reported monthly
- EU, Switzerland, Norway, Liechtenstein and Iceland nationals do not need a visa or work permit to live and work in Luxembourg, but all other foreign nationals must apply for temporary residence permits to obtain both a work and residence permit
- Employers must prove that a job has been advertised locally and no residents are appropriate for the position before hiring a foreign worker for the position
- In accordance with the labor laws in Luxembourg, employees must inform their employer on the first day of absence due to illness. Absence from work beyond 3 days will require a medical check. The employee must provide the following:
- A copy of the medical certificate, duly completed and signed by their attending physician, to the National Health Fund (Caisse Nationale de Santé – CNS)
- A copy of the paperwork sent to the employer
Blue Marble has created easy-to-use cloud-based payroll technology to manage payroll and compliance in Luxembourg. Our customized monthly reporting gives you access to real-time payroll costs across all countries and currencies on one platform. We simplify payroll with a unique combination of a US-based service team and direct access to local, in-country experts when questions come up. To learn more, click here to get started