SARL-S in Luxembourg: Create a Company from €1 - 2026 Guide
Mickaël LOC
Founder & Managing Director, Financial Services ·
SARL-S in Luxembourg: Create a Company from €1 - 2026 Guide
The SARL-S (Simplified Private Limited Liability Company), introduced by the law of 23 July 2016, allows you to set up a company with a minimum capital of €1. Aimed at individual entrepreneurs starting a commercial or craft activity, it drastically lowers the entry barrier while offering the protection of limited liability. But beware: several structural restrictions set it apart from the classic SARL.
Who can set up a SARL-S?
The SARL-S is reserved exclusively for natural persons. A given person may only be a shareholder of one SARL-S at a time (except in the case of transmission by inheritance). The corporate purpose must relate to an activity requiring a business permit (commercial, craft or regulated liberal profession) and the shareholder must be the holder of that permit. This de facto excludes wealth holding companies and purely financial activities.
SARL-S vs SARL: 2026 comparison table
| Criterion | SARL-S | SARL |
|---|---|---|
| Minimum capital | €1 | €12,000 |
| Maximum capital | €12,000 | Unlimited |
| Shareholders | Natural persons only | Natural persons and legal entities |
| Number of shareholders | 1 to 100 | 1 to 100 |
| Business permit | Mandatory for the shareholder | For the director |
| Incorporation deed | Private deed (free template) | Notarial deed required |
| Enhanced legal reserve | 25% of profit up to €12,000 | 5% up to 10% of capital |
| Average incorporation time | 5 to 10 days | 10 to 15 days |
| Incorporation costs | ~€300 to €600 | €2,300 to €5,300 |
Fast-track incorporation procedure
- 1. Obtain the business permit File with the Ministry of the Economy via MyGuichet.lu. The sole shareholder must be the holder. Cost: €50. Processing time: 2 to 4 weeks.
- 2. Draft the articles The official template is available free of charge on the Ministry of Justice website. No notary required: a private deed is sufficient.
- 3. Pay up the capital The capital (even a symbolic €1) must be fully paid up before incorporation.
- 4. File with the RCS Direct filing via LBR online. RESA publication mandatory.
- 5. VAT and CCSS registration Same as for the classic SARL: VAT if turnover > €35,000, employer registration if hiring.
The enhanced legal reserve: watch the trap
A key SARL-S specificity: the company must set aside 25% of its annual net profit as a reserve until the reserve reaches €12,000. At that point, the company must be converted into a classic SARL (shareholder resolution and amendment of articles). This constraint is intended to capitalize the company and move it into the ordinary regime as soon as it can afford to. If overlooked, it can lead to the judicial dissolution of the company.
When to choose the SARL-S?
- Local craft or commercial activity: restaurateur, hairdresser, plumber, independent consultant.
- Low-capitalization project: you expect less than €50,000 in annual turnover in the first few years.
- No need for corporate shareholders: no institutional investors or family holding planned.
- Tight incorporation budget: you want to get started for less than €1,000 all in.
Limits and alternatives
The SARL-S is not suited to high-growth projects, activities requiring external investors, holding companies or complex structures. In these cases, look at the classic SARL (€12,000 capital) or the SA (€30,000, with 25% paid up, i.e. €7,500 at start-up). For a wealth holding activity, see SOPARFI : Le véhicule de holding luxembourgeois expliqué or SPF Luxembourg : La société de gestion de patrimoine familial expliquée.
Express SARL-S incorporation Bookkeeper.lu prepares your file in 5 days: articles template tailored to your activity, RCS filing, VAT registration, accounting support from the first month.
Frequently Asked Questions
What is the difference between a SARL and a SARL-S in Luxembourg?
The main difference is the minimum capital: €12,000 for the SARL and €1 for the SARL-S. The SARL-S is reserved exclusively for individuals (maximum 5 shareholders), whereas the SARL can accept up to 100 shareholders, including corporate entities. The SARL-S also does not require a notarial deed.
Is the SARL-S suitable for all types of activity?
The SARL-S works well for self-employed professionals, consultants and founders at the startup stage. It is not recommended for activities requiring substantial capital (banking, insurance, investment funds) or for onboarding institutional investors.
Do you need a notary to set up a SARL-S?
No, the SARL-S can be incorporated by private deed, without the mandatory involvement of a notary. This significantly reduces incorporation costs. The articles of association must nevertheless be filed with the Trade and Companies Register (RCS).
What is the SARL-S legal reserve?
The SARL-S is subject to a mandatory legal reserve of 5% of annual profits, until the reserve reaches €12,000. This reserve is designed to progressively strengthen the company's financial soundness.
Can a SARL-S be converted into a standard SARL?
Yes, a SARL-S can be converted into a SARL once the conditions (in particular the €12,000 capital) are satisfied. This conversion requires an amendment of the articles of association by notarial deed.
