Contracting in Luxembourg

If you have a business outside Luxembourg and wish to employ Luxembourg staff, then Tenebras Sarl can give you a professional employer of record (PEO) service.

You don’t have to incorporate a company in Luxembourg or register your company as a foreign employer. Tenebras Sarl can act as the employer of your staff, and they can work for your business. Tenebras Sarl will ensure that all the employment requirements will be met and attend to any HR issues.

In return for an agreed fixed fee, we will attend to all the activities that need attention, and we will present you with monthly invoices for the costs of employment plus our fees. Nothing could be much more straightforward!

As a recruitment business, you will want to ensure that your contractors work lawfully in Luxembourg, whether Luxembourg nationals or foreigners. All EU/EEA nationals can come to live and work without restriction in Luxembourg. All other citizens must have the legal right to work, and this may be through a work permit, European Blue Card, by family entitlement or Trading License (Autorisation d’Etablissement). Tenebras Sarl can assist the contractor who requires it to obtain the legal right to work.

After that, there are three ways that an employee can be structured compliantly, and these are:

• Self-employment
• Employment
• Limited Company

Not everyone is eligible for all three solutions, and each has its advantages and disadvantages. The only way to establish the best method in a given case is to understand your requirements, clients’ wishes, and the contractor’s best interests.

We demonstrate this by carrying out an in-depth fact find, and we believe that Access Financial Group is unique in using this methodology.

Briefly, Self-employment is a good choice where there is sufficient independence between the contractor and client. Employment is the only method where there is insufficient independence. Where a contractor has a suitable PSC / Limited Company, the localising the contractor and the company can be a way for the contractor to maintain his or her independent contracting activity in a tax and social security efficient way.

Luxembourg is a small country that punches economically and administratively above its weight. It also acts as an economic magnet for people living in France, Belgium and Germany who cross the border to work in Luxembourg. From 1st January 2021 British people no longer have the right to live or work in Luxembourg. However, as a country in the Schengen Area, British people may spend up to 90 days in any 180 days for tourism or business purpose but not for gainful work. They will need a work visa as will any third-country national.

Tenebras Sarl can sponsor work permits and assist contractors in obtaining Professional Cards or EU Blue Cards. Subject to having the legal right to work, there are three ways to work legally in Luxembourg:

• Self-employment
• Employment
• Limited Company

Not everyone is eligible for all three solutions, and each has its advantages and disadvantages. The only way to establish the best method in a given case is to understand your requirements.

We demonstrate this by carrying out an in-depth fact find, and we believe that Access Financial Group is unique in using this methodology.

Briefly, Self-employment is a good choice where there is sufficient independence between the contractor and client. Employment is the only method where there is insufficient independence. Where a contractor has a suitable PSC / Limited Company, the localising the contractor and the company can be a way for the contractor to maintain his or her independent contracting activity in a tax and social security efficient way.

If you would like to discover your tax and net retention in Luxembourg, you can easily use our free online income calculator.