Creating a Joint Venture in Luxembourg

Foreign enterprisers seeking to temporarily invest in Luxembourg can find local partners to form a joint venture with. Even if the Commercial Law does not provide for joint ventures, from a legal point of view, these are recognized. As a definition, a joint venture is an arrangement between two or more companies or private individuals in order to work on a common project. In Luxembourg, joint ventures can be set up as:

• -          private limited companies (SARL);
• -          public limited companies (SA);
• -          limited partnership (SCA);
• -          special limited partnership (SCS).

Our lawyers in Luxembourg can help foreign investors with setting up any of the type of companies mentioned above.

The video below shows the procedure to set up a joint venture in Luxembourg:

Types of joint ventures in Luxembourg

The most common vehicle for setting up a joint venture in Luxembourg is the private limited company (SARL). Considering Luxembourg is a renowned financial center, foreign enterprisers can also create joint ventures in the investment funds industry by finding local partners. In this situation they can choose a collective investment undertaking as a structure. However, one must know that they are not allowed to use UCITS funds for a joint venture in Luxembourg.

Non-investment joint ventures in Luxembourg are required to:

• -          have a commercial goal, other than a financial investment one;
• -          raise capital for other purposes than investing in any type of funds;
• -          the shareholders to be involved in the direct management of the joint venture.

Joint ventures in Luxembourg are usually set up by drafting joint venture agreements.

Advantages of joint ventures in Luxembourg

Joint ventures are easy to be created in Luxembourg when assisted by professionals, such as a local law firm which can also provide information about the legal aspects of this type of association. However, Luxembourg joint ventures are also advantageous from a taxation point of view, especially for foreign investors coming from countries Luxembourg has concluded double taxation treaties with. The corporate governance regulations, which are quite flexible in Luxembourg, are what allow foreign investors use various vehicles to set up a joint venture in the Grand Duchy.

If you need assistance with the preparation of the joint venture agreement, you can rely on our law firm in Luxembourg.