SNC in Luxembourg: General Partnership - Complete Guide
Mickaël LOC
Founder & Managing Director, Financial Services ·
SNC in Luxembourg: General Partnership - Complete Guide
The SNC (Société en Nom Collectif), Luxembourg's general partnership, is the simplest legal form to set up in Luxembourg: no minimum capital is required, incorporation can be done by private deed and all partners have the status of merchants. In exchange, each partner has unlimited and joint liability for the company's debts on their personal assets. It suits partnerships based on mutual trust, notably in the liberal professions.
Key features
- No minimum capital required
- All partners are merchants and jointly and unlimitedly liable
- No separation between personal and professional assets
- Incorporation without mandatory notarial deed (private deed possible)
- Partnership interests are not freely transferable without unanimous consent of the partners
Tax regime of the SNC
The SNC is tax-transparent in Luxembourg: profits are taxed directly in the hands of the partners, in proportion to their share in the capital. The company itself is not subject to corporate income tax (IRC). This tax transparency can be advantageous for certain investment or operating structures.
When to choose an SNC?
The SNC suits partnerships between people who know each other and trust each other, notably in the liberal professions, professional firms and small commercial structures where partners want simple and informal governance.
Is the SNC the right choice for your partnership? Our experts advise you on the legal form best suited to your situation and the risks you are willing to take on.
Frequently Asked Questions
What is the main risk of the SNC?
The main risk is the unlimited and joint liability of all partners. If the company incurs debts, creditors can claim against the personal assets of each partner without limit.
Does the SNC pay corporate income tax in Luxembourg?
No, the SNC is tax-transparent. It does not pay corporate income tax. Profits are taxed directly in the hands of the partners, pro rata to their shares, according to their personal tax situation.
Is minimum capital required to set up a SNC?
No, there is no minimum capital requirement to incorporate a SNC in Luxembourg. Partners may contribute whatever they wish, in cash or in kind.
Is a notarial deed required for the SNC?
No, the SNC can be incorporated by private deed, without a notary. The articles of association must nevertheless be filed with the Trade and Companies Register.
Who can be a partner in a SNC?
All partners of a SNC automatically acquire the status of trader. There must be at least 2 partners. Legal entities may also be partners in a SNC.
