April 2016 | A Guideline on Substance for Companies in Luxembourg
Points for consideration.
✓ At least half of the board members reside or are actually established in Luxembourg.
✓ The board members are credible with the required professional knowledge to properly perform their duties.
✓ Regular board meetings, at least three times in a year, or every time the company carries out an important transaction, should be held.
✓ Such board meetings should take place with the physical presence of the Directors in Luxembourg - circular resolutions should be an exception to the physical meeting.
✓ All management decisions are taken in Luxembourg within such meetings.
✓ The minutes of the board meetings should be as detailed as possible and should truly reflect the discussions held and the decision making process, to evidence that the decisions are taken in Luxembourg.
✓ Luxembourg resident directors should have decision-making powers in respect of the bank accounts.
✓ The bookkeeping of the company is conducted in Luxembourg.
✓ The company is compliant with all tax filing obligations in Luxembourg.
✓ The business address of the company is in Luxembourg.
✓ The company’s sole tax residency is Luxembourg.
✓ The company’s equity is appropriate with regard to the required real risk.
The actual substance required in Luxembourg should be assessed on a case-by-case basis and maybe influenced from the perspective of the other jurisdictions involved.