What is a business licence and who must obtain one?
A business licence (autorisation d’établissement) is the administrative authorisation that allows you to legally carry on an independent activity in Luxembourg. Based on the amended law of 2 September 2011, it ensures that professionals meet strict requirements of professional integrity and qualification. This requirement applies to general trade, hotels and catering, transport, industry, crafts, and certain liberal professions such as chartered accountants, architects, or surveyors.
Are you a sole trader? The licence will be issued to you personally. Are you setting up a company? The company must appoint a natural person as manager, registered with the Trade and Companies Register (RCS), who will hold the required professional qualification and integrity. This manager must ensure the effective and permanent management of the business, with a regular physical presence in Luxembourg or the Greater Region.
Penalties for operating without a licence are severe: up to 3 years’ imprisonment and a fine of up to EUR 125,000 for individuals, and double that amount for companies. The Ministry may also order the temporary closure of the establishment.
Eligibility conditions vary depending on your business sector
Three cumulative conditions must be met to obtain the licence: professional integrity, appropriate qualification, and an effective establishment in Luxembourg.
Professional integrity is assessed over the past ten years. The Ministry checks the absence of convictions incompatible with the intended activity, fraudulent bankruptcy, or breaches of tax and social security obligations. If you have resided in Luxembourg for more than ten years, an extract from the Luxembourg criminal record is sufficient. Otherwise, you must provide criminal record extracts from all countries where you have lived, together with a notarised declaration of non-bankruptcy.
Qualification requirements vary significantly by activity. For trade, industry, or crafts listed in List C, no specific qualification is required. By contrast, crafts listed in List A—electrician, carpenter, plumber, hairdresser, baker—require a master craftsman’s certificate, a bachelor’s degree covering the activity, or a CAP/DAP combined with six years’ experience in managerial functions. Liberal professions generally require a master’s degree and several years of professional practice.
An effective establishment means a genuine physical setup adapted to the nature of the activity. Simple domiciliation is not sufficient: the Ministry systematically refuses “letterbox companies” without a real physical presence.
Preparing a complete file: the essential documents
An incomplete file is the primary cause of delays. The following documents are systematically required:
– Application form and declaration on honour
– Copy of identity document (ID card or passport)
– Proof of payment of the EUR 50 administrative fee
– Extract from the Luxembourg criminal record No. 3 (less than 6 months old)
– For non-residents: criminal records from all countries of residence over the past 10 years and a notarised declaration of non-bankruptcy (less than 3 months old)
– Draft articles of association for a company in formation, or an RCS extract for an existing company
– Proof of establishment (lease agreement for the place of business)
For craft activities and liberal professions, add diplomas or professional certificates. If your qualifications were obtained abroad, prior recognition by the Ministry of National Education is mandatory—allow an additional two to six weeks for this step.
Actual timelines and procedure: what to anticipate
Applications are submitted online via MyGuichet.lu with a LuxTrust certificate, or by post to the Ministry of the Economy. The electronic route is strongly recommended: exchanges are faster and the authorisation is delivered directly to your professional space.
The statutory processing time is a maximum of three months. In practice, a perfectly prepared file receives a response within two to four weeks. Conversely, incomplete files or those requiring additional checks will use the full statutory period. Notably, if no response is received after three months, tacit approval applies.
The authorisation remains valid as long as the activity is carried on, but lapses after two years of inactivity. Any change—address, manager, or extension of activity—must be notified to the Ministry within one month.
The five pitfalls that systematically delay applications
First pitfall: starting the activity before the licence is granted.
This is illegal and severely sanctioned. A company may be registered with the RCS, but it may not carry out any operational activity until the licence is issued.
Second pitfall: unrecognised diplomas.
Qualifications obtained outside Luxembourg must be recognised before applying for the licence. This preliminary step is frequently overlooked by foreign entrepreneurs.
Third pitfall: incomplete criminal records.
If you have lived in several countries over the past ten years, each criminal record must be provided. Documents must be recent and, where applicable, translated by a sworn translator.
Fourth pitfall: lack of a real establishment.
The Ministry verifies the existence of appropriate infrastructure. Domiciliation companies may host your registered office, but you must have an effective place of business for activities subject to authorisation.
Fifth pitfall: underestimating cumulative timelines.
Between diploma recognition, obtaining foreign criminal records, and processing the application, several months may elapse.
Special cases: non-EU nationals and regulated activities
Third-country nationals must submit a single file to the Ministry of Immigration, combining the application for a residence permit for self-employed persons and the business licence. The professional component is then forwarded to the competent department.
Certain activities require additional approvals: the financial sector falls under the CSSF, medical professions under the Ministry of Health, and lawyers under the Bar Association. The standard business licence does not cover these specifically regulated professions.
For companies with multiple managers, note that one manager may not be designated for more than two craft businesses in Lists A and B, unless they hold at least 25% of the shares in each.
Conclusion: secure your launch with expert support
The business licence conditions your right to operate in Luxembourg. A poorly prepared file can delay your project by several weeks—or even months. The complexity of the requirements—sector-specific qualifications, diploma recognition, integrity conditions—justifies professional support from the preparation phase.
Our team of chartered accountants supports dozens of entrepreneurs each year with their establishment procedures in Luxembourg. From analysing your personal situation to compiling a complete file, we secure every step so you can start your activity as quickly as possible. Contact PCG for an initial discussion about your project.
