Company Domiciliation in Luxembourg: Legal Framework and Permitted Activities

For several decades, Luxembourg has established itself as a leading centre for the structuring of companies and investment vehicles. This attractiveness is reflected in the particularly high number of registered entities. According to the latest available data, the Luxembourg Trade and Companies Register recorded more than 168,000 entities as at 31 December 2025, representing an increase of approximately 13,000 entities in just one year.

Beyond the sheer number of entities, the Luxembourg financial centre is characterised by the diversity of its structures, with a strong presence of holding companies, investment structures and cross-border vehicles. Over the years, there has been a steady increase in the number of Reserved Alternative Investment Funds (RAIFs), Alternative Investment Funds (AIFs), as well as general partners and limited partners forming part of fund structures. In this environment, company domiciliation is a widely used solution, allowing certain companies to establish their registered office in Luxembourg without maintaining their own infrastructure.

However, this practice is strictly regulated by the Law of 31 May 1999 governing the domiciliation of companies (hereinafter the “Domiciliation Law”) and cannot be reduced to the mere provision of an address. On the contrary, it is subject to a specific legal framework.

The role of a domiciliation service provider is therefore to support the companies it domiciles throughout their corporate lifecycle, while ensuring their compliance with applicable legislation. In particular, the provider may be required to coordinate or directly provide administrative, legal or accounting services to these companies, while ensuring compliance with the relevant legal obligations.

Against this background, it is essential to revisit the concept of company domiciliation, clarify its fundamental distinctions and identify the circumstances in which it is, or is not, permitted.

1. Concept of Company Domiciliation and Fundamental Distinctions

A company’s registered office is, in principle, located at its principal place of business. In Luxembourg, however, the practice of domiciliation allows, subject to certain conditions, a company to establish its registered office at a third party’s address “to carry out an activity falling within its corporate purpose and for that third party to provide services of any kind connected with that activity”. Article 28-9 of the amended Law of 5 April 1993 on the financial sector (hereinafter the “Financial Sector Law”) uses similar wording to define the activity of a company domiciliation agent, which falls within the category of other professionals of the financial sector.

Three main elements therefore determine the legal scope of company domiciliation:

• The establishment by a company of its registered office at a third party’s address;
• The performance at that address of an activity falling within the company’s corporate purpose;
• The provision by that third party of services of any kind connected with the domiciled company’s activities.

Domiciliation involves a structured relationship with an authorised professional and cannot be equated with the mere provision of an administrative address. It requires the active involvement of a third party providing services to the domiciled company. The Domiciliation Law also imposes several professional obligations on the domiciliation service provider, including the prior verification of compliance with the provisions governing the company’s registered office and the identification of the actual members of its governing bodies. It also allows the provider to terminate the domiciliation agreement in the event of non-compliance with the legislation governing commercial companies and business establishment requirements.

Some service providers offer premises in business centres through lease agreements rather than domiciliation agreements. However, such arrangements may fall within the scope of the domiciliation regime where the landlord provides ancillary services connected with the company’s activities. Established case law confirms that the legal classification does not depend solely on the agreement concluded between the parties but must be assessed in light of the services actually provided: it is a question of fact. Accordingly, services such as receiving or forwarding mail may be sufficient to constitute domiciliation, provided that they are connected with the company’s activities.

It should also be recalled that domiciliation is, in principle, incompatible with the requirements of business establishment legislation. Indeed, the amended Law of 2 September 2011 regulating access to the professions of craftsman, trader, industrialist and certain liberal professions (hereinafter the “Business Establishment Law”) requires commercial or craft activities to be carried out from an “establishment” meeting strict requirements, particularly regarding physical premises, effective management and the presence of the manager. The legislator expressly provides that domiciliation within the meaning of the Law of 31 May 1999 does not constitute an establishment. Consequently, the mere provision of an address is insufficient to satisfy the requirements of business establishment legislation.

More generally, case law adopts an approach based on a combination of indicators to distinguish arrangements involving the genuine provision of office premises from those which, in substance, constitute domiciliation. Relevant factors include the number of companies registered at the same address, the nature and extent of the premises, the human resources actually present and the standardisation of the services provided.

Conversely, certain specific arrangements do not fall within the domiciliation regime. This is particularly the case where several companies belonging to the same group share a common address.

2. Permitted Activities

As previously indicated, companies carrying out commercial or craft activities cannot rely on domiciliation. They must maintain appropriate infrastructure, including genuine business premises and sufficient human resources.

Conversely, passive holding activities are more readily compatible with domiciliation.

In the field of intellectual property, the mere holding of intangible assets or the receipt of income derived from such assets may, in principle, be regarded as a passive holding activity. By contrast, the active, regular and profit-oriented exploitation of such rights, particularly where it involves a dedicated organisation and the provision of services to third parties requiring the “independent and habitual performance of operations constituting an economic activity”, may qualify as a commercial activity within the meaning of Article 1 of the Law of 2 September 2011, which covers any independent activity carried out for profit. The legal classification will therefore depend on the actual nature of the operations performed.

With regard to regulated funds, the Domiciliation Law expressly excludes from its scope, firstly, the domiciliation of an investment company or another undertaking for collective investment established in the form of a commercial company at the registered office of a management company of undertakings for collective investment (hereinafter “UCIs”) and, secondly, the domiciliation of a UCI management company or a UCI advisory company at the registered office of another UCI management company.

The CSSF has also noted an increasing number of general partners (“GPs”) among domiciled entities forming part of fund structures. These entities provide services that do not fall within the scope of the Business Establishment Law, as such services are provided to an undertaking belonging to the same group. They may therefore be domiciled with an authorised professional.

In all circumstances, the assessment must be carried out on a case-by-case basis, taking into account the company’s corporate purpose and the services actually provided in Luxembourg.

Conclusion

Company domiciliation is a central feature of the Luxembourg financial centre and contributes significantly to its attractiveness. It provides flexibility in corporate structuring while remaining subject to a rigorous legal framework requiring compliance with specific conditions. It cannot, however, replace a genuine business establishment where the nature of the activity requires one.