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Luxembourg Legal Framework: Historical Perspective

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Luxembourg has created a global services package with advantages for Israeli companies that want to launch their business in Europe. This presentation describes Luxembourg's legal system, history, economics and lifestyle. It was created as part of the Luxembourg/Israel Business Initiative which is led by P&TLuxembourg's TERALINK unit. The law firm of Lauer and Sartor contributed this presentation.

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Luxembourg Legal Framework: Historical Perspective

  1. 1. Luxembourg’s position in Europe : history, economics, life styleChristian-Charles Lauer, Attorney, Lauer & Sartor
  2. 2. FROM THE ROCK TO THE GRAND-DUCHY OF LUXEMBOURGKEYDATES :963 : Creation of the earldom of Luxembourg (Lucilinburhuc)1354 : Dukedom (duchy) and a member of the holy German empire - Luxembourg had three times its actual sizeXVIIe : Losing parts along the French border (Louis XIV)1815 : Losing parts along the German border (fall of Napoleon 1st)
  3. 3. FROM THE ROCK TO THE GRAND-DUCHY OF LUXEMBOURG1839 : Losing parts of territories along the Belgium border (creation of the Kingdom of Belgium)1839 : * actual size * own monarchy , still in place today (the house NASSAU -WEILBURG) * independent * national identity1842 : Membership in the « Zollverein »1868 : Slipping of the fortress
  4. 4. FROM THE ROCK TO THE GRAND-DUCHY OF LUXEMBOURG1911 : Creation of A.R.B.E.D.1914 : First World War1918 : End of the first World War1933 : Second World War1940 : Invasion of the German troops & forced annexion of Luxembourg to Germany1942 : General strike against the Nazi regime (21 death sentences)1945 : End of the Second World War
  5. 5. FROM THE ROCK TO THE GRAND-DUCHY OF LUXEMBOURG1945 : Founding member of the UNO (United Nations Organization)1949 : Founding member of the NATO (North Atlantic Organization)1951 : Founding member of the CECA (European Steel & Coal Community) with its headquarter in Luxembourg70’ : Development of the financial sector (149 banks nowadays)1999 : Adoption of the Euro as scriptural money
  6. 6. FROM THE ROCK TO THE GRAND-DUCHY OF LUXEMBOURG2002 : Introduction of the Euro2003 : * Creation of the Luxembourg University * development of research activities (medical, biotechnical) * development of the ICT sector
  7. 7. NOWADAYSHosting of important European institutions :- European Court of Justice (1st and second degree of juridiction)- European Investment Bank- European Court of Auditors- European Agency of Official Publications- A number of services of the European Commission- Secretariat general of the European Parliament- Eurostat (European statistic office)- Sessions of the council of ministers (April, June & October of each year)
  8. 8. NOWADAYS• Luxembourg counts today 9,500 European servants.• Today’s population : 502,066 persons including foreigners (43 % of the total population).• Each day 135,400 persons are non-resident workers coming from our neighboring countries (France, Belgium & Germany).
  9. 9. TYPES OF COMPANIESWORDING S.A. (public limited) S à R L (private limited)Name Freeely chosen denomination Business name or freeely chosen denominationMinimum social capital 31000 € fully subscribed but 12500 € fully subscribed and possibility to pay only ¼ (release) paid (released)Founders Represented by shares Min. one, maximum of 40 (registered or bearer shares) partners Min. one (Law 2006) Certificate of participation No maximum of shareholdersAdministration Board of directors (min. 3) Director (gérant technique) and one chairman General assembly once a year at least No need of a general assembly if the number of partners ≤25Supervision By an independant auditor No need of an independant auditor if the number of partners ≤25
  10. 10. TYPES OF COMPANIESIN BOTH CASES THE COMPANY’S HEADQUARTER HAS TO EXIST PHYSICALLYIN LUXEMBOURG OTHERWISE :THERE’S A RISK THAT THE AUTHORITIES (tax authorities) CONSIDER THAT THEREAL HEADQUARTER ISN’T IDENTICAL WITH THE HEADQUARTER INDICATED IN BOTH CASES THE COMPANY’S HEADQUATER HAS TO EXIST PHYSICALLYAND IN LUXEMBOURG ANTOHERWISE :THEY WILL RELOCATE THE HEADQUARTER AT THE PLACE WHERE THE REALPOWER OF THAT THE AUTHORITIES (tax authorities) CONSIDERED THAT THE REAL RISK DIRECTION OF THE COMPANY IS EXERCISED. HEADQUATER ISN’T IDENTICAL WITH THE HEADQUATER INDICATED ANDISN’T IDENTICAL WITH THE THE HEADQUATER AT THEAND THEY WILL RELOCATE HEADQUATER INDICATED PLACE WHERE THE REALTHEY WILL RELOCATE THE HEADQUATER AT THEEXERCICED. POWER OF DIRECTION OF THE COMPANY IS PLACE WHERE THE REALPOWER OF DIRECTION OF THE COMPANY IS EXERCICED.

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