Dormant Company in Luxembourg: Options and Obligations

Obligations maintained during dormancy

• Filing of annual accounts with the RCS via eCDF (even when accounts are at zero)
• Annual IRC and ICC tax returns (nil return if no income)
• VAT return if registered (deregistration can be requested)
• Payment of minimum wealth tax (535 euros for companies whose financial assets exceed 90% of the balance sheet)
• Holding of annual general meeting and drafting of minutes
• Update of the beneficial owners register (RBE)

Non-compliance risks

Failure to file annual accounts for 3 consecutive years may lead to judicial dissolution at the request of the Public Prosecutor. Non-payment of minimum wealth tax triggers late-payment interest. Failure to update the RBE exposes the company to fines from 1,250 to 1,250,000 euros. In practice, the annual cost of maintaining a dormant company ranges from 2,000 to 4,000 euros (accountant + minimum tax + domiciliation).

Reactivation or liquidation?

Reactivation is straightforward if the company is up to date with its obligations: simply resume activity and request a new business permit if needed. If no resumption is planned, liquidation is preferable to avoid recurring costs. Simplified liquidation is generally possible for dormant companies without debts and costs between 3,000 and 5,000 euros, i.e., less than 2 years of dormancy costs.