Luxembourg or Netherlands: where should your business be based?
The Netherlands ranks higher in the index, =09 against 23. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
Corporate income tax is 16% on income above €200,000 and 14% up to €175,000. With the 7% solidarity surcharge and Luxembourg City's 6.75% municipal business tax, the combined rate is 23.87%. VAT is 17%.
Taxable profit up to €200,000 is taxed at 19% and profit above it at 25.8%, rates that have applied from 2023 to 2026. VAT is 21%.
Set-up
An SARL is formed before a notary, who files the deed with the Trade and Companies Register. The registry fee is €105.91 plus VAT, and publication in the RESA follows on acceptance, normally the day of filing.
A BV is formed by a civil-law notary, with fees the government puts at €500 to €1,500, and registration costs €85.15. No standard time is published.
On the ground
Every company needs a registered office in Luxembourg. A business permit for commercial, craft and some professional activities needs a physical establishment and a manager present day to day.
Official pages state no residence requirement for directors. A director living abroad is registered with a legalised passport copy and proof of address.
Ownership
The beneficial ownership register closed to the public after the EU Court of Justice ruling of 22 November 2022. Authorities and obliged professionals have access, and journalists, AML organisations and likely counterparties can apply.
Public access ended on 16 July 2025, according to law firm reports. Access is now limited to authorities and obliged entities such as gatekeepers.
Residence
A non-EU owner who will run the business in person can apply for a self-employed residence permit, with a business plan, proof of resources and the business permit agreement in principle. A reply is due within 3 months.
The start-up permit requires a facilitator and lasts at most one year, after which a points-based self-employed permit can follow. US nationals have a treaty route.
Living and working
Currency
Euro.
Euro.
Time zone
UTC+1, or UTC+2 in summer.
UTC+1, and UTC+2 in summer.
Personal tax
Progressive rates rise to 42% on income above €234,870. With the 9% solidarity surcharge for higher earners, the top marginal rate is 45.78%.
Income above €78,426 is taxed at 49.50% (2026, below pension age); investments are taxed at 36% on a deemed return.
Flights
Luxembourg Airport at Findel offers more than 100 non-stop destinations.
Language
The Netherlands Commercial Court works in English and issues its judgments in English.
Luxembourg vs Netherlands: common questions
Luxembourg: Corporate income tax is 16% on income above €200,000 and 14% up to €175,000. With the 7% solidarity surcharge and Luxembourg City's 6.75% municipal business tax, the combined rate is 23.87%. VAT is 17%. The Netherlands: Taxable profit up to €200,000 is taxed at 19% and profit above it at 25.8%, rates that have applied from 2023 to 2026. VAT is 21%.
Luxembourg: An SARL is formed before a notary, who files the deed with the Trade and Companies Register. The registry fee is €105.91 plus VAT, and publication in the RESA follows on acceptance, normally the day of filing. The Netherlands: A BV is formed by a civil-law notary, with fees the government puts at €500 to €1,500, and registration costs €85.15. No standard time is published.
Luxembourg: Every company needs a registered office in Luxembourg. A business permit for commercial, craft and some professional activities needs a physical establishment and a manager present day to day. The Netherlands: Official pages state no residence requirement for directors. A director living abroad is registered with a legalised passport copy and proof of address.
Luxembourg: The beneficial ownership register closed to the public after the EU Court of Justice ruling of 22 November 2022. Authorities and obliged professionals have access, and journalists, AML organisations and likely counterparties can apply. The Netherlands: Public access ended on 16 July 2025, according to law firm reports. Access is now limited to authorities and obliged entities such as gatekeepers.
Luxembourg: A non-EU owner who will run the business in person can apply for a self-employed residence permit, with a business plan, proof of resources and the business permit agreement in principle. A reply is due within 3 months. The Netherlands: The start-up permit requires a facilitator and lasts at most one year, after which a points-based self-employed permit can follow. US nationals have a treaty route.
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