Setting Up an E-commerce Company in Luxembourg: VAT, Legal Forms and Compliance
Mickaël LOC
E-commerce & VAT Specialist ·
Setting Up an E-commerce Company in Luxembourg: VAT, Legal Forms and Compliance
To set up an e-commerce company in Luxembourg, the SARL is the most suitable form for medium-sized structures, with a minimum capital of €12,000. You then need to register for Luxembourg VAT (standard rate 17%, the lowest in the EU), implement the OSS regime if your B2C sales exceed €10,000 in other EU countries, and ensure GDPR compliance. Luxembourg is an ideal European headquarters for e-commerce thanks to its competitive tax regime and central position.
Recommended legal form
The SARL is the most widely used form for medium-sized e-commerce businesses. For larger structures or those requiring fundraising, an SA or SAS is preferable. The SARL-S can be suitable at start-up for projects with little initial capital.
E-commerce VAT in Luxembourg
Since 1 July 2021, the OSS (One Stop Shop) regime applies to intra-Community B2C sales. If your turnover exceeds €10,000 in EU countries (excluding Luxembourg), you must register for OSS and apply the VAT rate of the buyer's country.
VAT rates in Luxembourg
- Standard rate: 17% (the lowest in the EU)
- Intermediate rate: 14%
- Reduced rate: 8%
- Super-reduced rate: 3% (books, certain food products)
Legal obligations for e-commerce
- GDPR compliance (European data protection regulation)
- Clear T&Cs and mandatory legal notices
- 14-day right of withdrawal for European consumers
- Return policy compliant with consumer law
- VAT registration in countries where the OSS threshold is exceeded
Are you setting up an e-commerce company in Luxembourg? Our experts support you in the creation of the structure, the management of European VAT, and regulatory compliance.
Frequently Asked Questions
What is the standard VAT rate in Luxembourg for an e-commerce business?
The standard VAT rate in Luxembourg is 17%, the lowest in the European Union. However, since 1 July 2021, B2C sales to customers in other EU Member States are subject to the VAT rate of the buyer's country through the OSS scheme.
What is the OSS scheme for e-commerce?
The OSS (One Stop Shop) scheme allows e-commerce operators to declare and pay the VAT due in all EU Member States through a single Luxembourg portal. It applies as soon as B2C sales outside Luxembourg exceed €10,000.
Is GDPR compliance required for a Luxembourg-based e-commerce?
Yes, the GDPR (General Data Protection Regulation) applies to any e-commerce selling to European consumers. This entails a compliant privacy policy, cookie consent, and management of user rights (access, rectification, deletion).
What withdrawal right applies to European customers?
European consumers benefit from a withdrawal right of 14 calendar days from receipt of the product. The e-commerce operator must fully refund the customer within 14 days of the withdrawal.
Which legal form is recommended for an e-commerce?
The SARL is the most commonly used form for mid-sized e-commerce businesses. The SARL-S is suitable for starting up with limited capital. For larger structures requiring fundraising or an IPO, the SA or SAS will be preferable.
