Revisionscentret Sønderborg – Møllegade 71
October 15, 2024
October 15, 2024
October 2, 2024
October 1, 2024
September 24, 2024
The 2024 Interpreneur report from Kreston Global revealed vital insights into how small and medium enterprises (SMEs) can succeed globally, focusing on the UK as a business hub. In a recent article for the International Accounting Bulletin, Liza Robbins, Kreston Global’s chief executive, highlighted that the new Labour government under Keir Starmer has introduced several initiatives to drive growth. Still, uncertainty lingers over how these will affect international business prospects. Read the full article here, or read a summary down below.
The government’s central goal is to stimulate economic growth by attracting investment into the UK and making the country more business-friendly. Key legislation, such as the Audit Reform and Corporate Governance Bill, will influence businesses by emphasising digital transformation and data management, even though it mainly targets larger corporations. Another significant proposal, the Employment Rights Bill, aims to enhance worker rights, introduce a new National Living Wage and place restrictions on dismissals and outsourcing, prompting businesses to reassess their cost management strategies.
Robbins notes the increasing role of Artificial Intelligence (AI) in business and how the UK government plans to address its development. While there was no immediate introduction of an AI Bill, the anticipation of future legislation in this area is a call for businesses to prepare for potential changes. This future legislation is expected to regulate AI, further impacting businesses, and SMEs should be ready to adapt.
Tax policy is another concern, as UK growth projections suggest that the government may need to increase business taxes. For now, the Starmer government has avoided raising income tax, national insurance, or VAT. Still, the need for revenue will likely lead to future fiscal adjustments that could affect foreign investment decisions.
According to the Interpreneur report, Western Europe remains a key region for business expansion, with the UK still attractive to international investors, despite its increasing divergence from its European neighbours. This divergence, however, could present unique growth opportunities for entrepreneurs, who prioritize growth opportunities over other factors such as government incentives or network security. This dynamic poses a challenge for the UK government, as it seeks to balance growth ambitions with the need for economic stability.
The report underscores that economic volatility, exacerbated by global events like the COVID-19 pandemic, Brexit, and inflation, remains a major concern for business leaders looking to expand into the UK. Robbins emphasises that SMEs must navigate these uncertainties, particularly the impact of Brexit on supply chains, which continues to affect trade with the EU.
The government’s efforts to mitigate fears of instability and build stronger ties with the EU, as seen in events like the European Political Community Summit, are aimed at boosting international confidence. These efforts demonstrate the UK’s commitment to maintaining strong international relations, which is crucial for business growth. However, Robbins concludes that the real test will come with the first Budget, where the government’s economic strategy will become clearer, and potential investors can better assess how the UK plans to attract and support business growth.
For more information on doing business with Kreston Global, contact us here.
September 17, 2024
Anna Kupprion is a Tax Consultant at Kreston Bansbach (Germany). She starts her career at a Big Four accounting firm and joined Kreston Bansbach in 2017. She provides expert advice on international tax issues (particularly transfer pricing) and also works on international tax questions such as double taxation agreements and withholding tax and can assist you in the best possible way.”
Andreas studied economics at the university of Hohenheim (Stuttgart) and graduated as Diplom-Ökonom (Master in economics). He joined Kreston Bansbach in 2010 starting in audit. After passing the examinations as tax advisor and certified public accountant he moved to the tax department of Kreston Bansbach in 2015 and since then focuses on international taxation, in particular transfer pricing, for a wide variety of clients from different industries. His main areas of work include transfer pricing planning, transfer pricing documentations, supporting clients in tax audits and overseeing mutual agreement procedures. Besides transfer pricing he also works on other international tax questions, for example relating to double taxation agreements and withholding taxes, issues of national taxation in Germany as well as due diligence and mergers & acquisitions.
August 22, 2024
Recent amendments to transfer pricing in Germany have brought significant changes to the country’s procedural law, particularly affecting transfer pricing documentation requirements.
These new regulations will take effect:
Given that prior tax periods, including those as far back as 2018, may still be subject to tax audits in 2025, these new regulations have a broad scope, making it imperative for taxpayers to be fully informed and prepared.
Previously, transfer pricing documentation was generally requested only during tax audits, with a 60-day deadline (or 30 days for extraordinary transactions) following a tax auditor’s request. The new regulations empower tax authorities to request transfer pricing documentation at any time, even outside of a formal audit and without specific cause. German companies with cross-border transactions must now be prepared to provide transfer pricing documentation at any time.
The current 60-day deadline (30 days for extraordinary transactions) to submit requested transfer pricing documentation will be reduced to 30 days under the new rules.
During a tax audit, taxpayers will no longer receive a separate request for transfer pricing documentation. Instead, they must submit the documentation within 30 days of the tax audit announcement, which could be well before the auditor actually begins their review. This change necessitates that taxpayers prepare their documentation in advance, as the 30-day window is unlikely to allow sufficient time for adequate preparation. Extensions will only be granted in exceptional cases.
The new regulations impose stricter penalties for delays or failures in submitting transfer pricing documentation. Previously, surcharges were rarely enforced due to auditor discretion. However, under the new rules, discretion is significantly reduced. If documentation is not submitted or is deemed unusable, surcharges of 5%-10% of the additional income (with a minimum of EUR 5,000) may apply. Late submissions may incur surcharges of up to EUR 1 million, with a minimum of EUR 100 for each day the deadline is exceeded. Furthermore, failure to provide documentation and unusable documentation could result in the tax authorities estimating the tax base, potentially leading to substantial additional tax liabilities.
We strongly advise reviewing the applicable thresholds in Germany for the preparation of transfer pricing documentation (including master and local files) if your German entities engage in cross-border transactions with related companies, especially for years not yet audited.
If these thresholds are exceeded, it is prudent to prepare the necessary documentation in advance to ensure compliance with the 30-day submission deadline once an audit order is issued after December 31, 2024.
| Master-file | Local-file | |
| German thresholds | Individual turnover of the German company > EUR 100 million | Total consideration for deliveries > EUR 6 million and/or total remuneration for other services (e.g. services, loan relationships, licenses, interests, etc.) > EUR 0.6 million Please note, the deliveries/services received and those provided must be added together. Only cross-border transactions with related parties are to be included in the thresholds. Transactions between domestic members of a group are not relevant. |
If you are interested in doing business in Germany, please contact us here.
July 4, 2024
July 1, 2024
London: The Kreston Reeves Corporate Finance team have recently played a pivotal role in two significant financial developments for major infrastructure and cleantech companies.
The firm’s Corporate Finance team has successfully advised a global infrastructure services provider on securing a £5 million funding facility from HSBC. This facility is the first of its kind provided by HSBC in the UK. The London-based infrastructure company is known for its rapid growth and involvement in some of the largest construction projects worldwide, including data centres, utilities, and aviation projects across Europe.
The advisory team was led by Corporate Finance Director Craig Dallender, Corporate Finance Manager Sakshi Gupta, and Corporate Finance Assistant Managers Mark Cheung and Victoria Sunley. Corporate Tax Senior Manager Mohammed Mujtaba provided tax advice.
Craig Dallender commented, “We are delighted to work alongside this infrastructure services company and HSBC on this innovative funding facility. It will further contribute to the growth and development of this market-leading infrastructure developer. Kreston Reeves has a strong Corporate Finance team that can bring forward new and novel funding facilities for UK businesses.”
The infrastructure company’s Chief Financial Officer added, “As a company, we never stay still. We embrace change and thrive on new challenges, constantly looking to break into new sectors, new countries, and new opportunities. This funding facility from HSBC will help support that, and we thank Craig and the Kreston Reeves team for their support in securing this new facility.”
In another significant development, Kreston Reeves acted as Reporting Accountants for Time To ACT plc on its admission to the Aquis Stock Exchange (AQSE). Time To ACT plc, which was admitted on 29 May 2024, is the first admission of the year. The Middlesbrough-based company focuses on cleantech, renewables, and energy transition opportunities, with two main operating divisions: Diffusion Alloys and GreenSpur.
Diffusion Alloys supplies diffusion coatings that protect metal components in high-temperature and corrosive environments, such as hydrogen and nuclear energy generation. GreenSpur has developed innovative electrical generator designs for the wind industry that eliminate the need for Rare Earth magnets and copper coils without any loss in performance.
The Kreston Reeves team, led by Craig Dallender, Sakshi Gupta, and Senior Manager Jeremy Marshall, guided Time To ACT plc through the listing process.
Craig Dallender expressed his enthusiasm, stating, “We are thrilled to have worked alongside the TTA team on its admission to the Aquis Stock Exchange. It is an exciting step in its continued growth journey. Kreston Reeves has a strong reputation and track record in acting as Reporting Accountants to companies wishing to list on the Aquis exchange and shows the strengths we have to help businesses grow through listings, fundraising, and mergers and acquisitions.”
Chris Heminway, Executive Chairman at Time To ACT plc, remarked, “Listing on the AQSE Growth Market marks a significant milestone for the company, and I would like to thank the Kreston Reeves team for their assistance in making this day a reality. Time To ACT is committed to fostering innovation in this sector and developing engineering-led solutions for a cleaner, greener world. Being listed on the AQSE Growth Market will play an important role in helping us to deliver on this commitment.”
These achievements underscore Kreston Reeves’ expertise and dedication to supporting businesses through innovative funding solutions and strategic market listings.
If you would like to speak to one of our corporate finance experts, please get in touch.
June 19, 2024
Background
Ayvens Croatia Ltd. (former ALD Automotive), a subsidiary of the Société Générale Group in Croatia, specializes in full-service-operating car leasing services. Operating in a complex multinational environment, the company faces stringent compliance requirements with transfer pricing regulations, particularly for financial transactions such as inter-company loans.
Challenge
The main challenge was to prepare comprehensive transfer pricing documentation for Ayvens financial transactions with related entities. These transactions required detailed benchmarking to ensure compliance with local and international tax laws, which vary significantly across jurisdictions. The company needed to manage and execute this task efficiently within a framework of regional and international cooperation.
Solution
To address this challenge, Ayvens enlisted Kreston Serbia’s and Kreston Croatia’s expertise. Kreston Serbia took charge of the technical aspects, including benchmarking the financial transactions to ensure they met arm’s length standards. This involved a detailed analysis of the terms and rates of loans between Ayvens and its related parties compared to market conditions and the use of appropriate benchmarking tools provided by Moody’s Analytics.
Simultaneously, Kreston Croatia managed the organisation, client management, and preparation of the final local transfer pricing documentation. Their role was crucial in coordinating efforts between the different branches and ensuring that all documentation met the specific requirements of Croatian tax authorities.
Results
The collaborative efforts of Kreston Serbia and Kreston Croatia resulted in robust transfer pricing documentation that fully complied with both local and international tax regulations. The project was not only a testament to effective regional cooperation, but also showcased the ability to serve international clients through a well-coordinated network.
Client Testimonial
Marela Barac, Finance Director at Ayvens Croatia Ltd., expressed her satisfaction with the services provided: “I am grateful for the assistance and dedication provided. It has been a pleasure working with you.
Conclusion
The successful preparation of transfer pricing documentation for Ayvens Croatia Ltd. demonstrates the effectiveness of Kreston’s network in leveraging regional expertise to meet the needs of international clients. This project not only ensured compliance with complex regulatory requirements but also set a precedent for future collaborations within the Kreston network.
Aurore Calvi is the Managing Director of OmniTrust. With a distinguished career spanning over 25 years in a Big Four accounting firm and various fiduciary organisations, she has held the position of CFO at Capita Assets Services/Link starting in 2009 and became a CSSF-authorised director in 2015, a role she fulfilled until her departure in late 2018. In 2019, she founded OmniGroup. Since 2022, she has been a board member of the Order of Chartered Accountants of Luxembourg, representing small and medium-sized firms within the profession at the board level.
June 17, 2024
A new Luxembourg property law enacted in May 2024, aims to invigorate the housing market, which has recently faced challenges due to rising interest rates and construction costs. This legislation introduces several measures designed to encourage property transactions, stimulate investment, and support social housing. Here’s a closer look at the main provisions of this new law:
For the year 2024, capital gains from property sales will benefit from a reduced tax rate of 10.5% for properties held for more than two years. This is a significant reduction compared to the standard rate and aims to boost property transactions. However, starting from January 1, 2025, this favourable tax treatment will only apply to properties held for over five years. Properties sold within five years of purchase will be subject to the standard progressive tax rates.
To incentivise the rental market, the law increases the tax exemption on rental income from social rental management organisations to 90%, up from 75% in 2023. Additionally, for properties purchased in a future state of completion intended for rental housing between January 1 and December 31, 2024, a special construction deduction of 4% is introduced. This deduction is capped at 250,000 euros.
The deduction ceiling for mortgage interest related to financing a principal residence is increased. For the first five years, the ceiling is set at 4,000 euros per person. This decreases to 3,000 euros for the subsequent five years and to 2,000 euros thereafter, making home financing more affordable.
To support young employees, a new rental allowance has been introduced. Effective from June 1, 2024, employers can offer a rental allowance to employees under 30 years old with a 25% tax exemption, capped at 1,000 euros per month. This measure aims to alleviate housing costs for young workers.
Investors purchasing rental properties will benefit from a tax credit of up to 20,000 euros, documented by a notarised deed between January 1 and December 31, 2024. This credit is intended to reduce acquisition costs and stimulate investment in rental properties.
The law reactivates the scheme allowing deferral of capital gains tax when reinvesting in new property intended for social rental management or achieving an A+ energy performance rating. Investors can defer capital gains tax until the new property is sold, provided the reinvestment occurs by the end of 2026.
The exemption on capital gains from the sale of properties to the state, municipalities, and municipal syndicates has been extended to include sales to the Housing Fund. This measure aims to encourage transactions with public entities, promoting social housing projects.
These fiscal and legislative reforms present substantial opportunities for both investors and residents, fostering the revitalisation of Luxembourg’s real estate market. For further details or assistance regarding these measures and their application to your real estate projects, our team is ready to assist you.
If you would like to talk to an expert about buying property in Luxembourg, please get in touch.
June 14, 2024
Kreston Reeves has successfully provided transaction advisory services to A4P Consulting on its sale to LabConnect, a US-based leader in global central laboratory services and scientific-focused Functional Service Provider (FSP) solutions.
Headquartered in Discovery Park, Sandwich, Kent, with a subsidiary in Appenzell, Switzerland, A4P Consulting specialises in regulated bioanalysis and genomics, biomarker strategy, personalised healthcare, biosample operations, and bespoke logistics solutions. A4P serves a diverse clientele across various therapeutic areas, partnering with pharmaceutical and biotechnology companies, contract research organisations, and foundations/non-governmental organisations.
LabConnect, renowned for its innovative Central Laboratory Services and scientific FSP solutions, supports clinical trials of all sizes and complexity globally. As the demands of clinical trials and drug development have increased, LabConnect meets these challenges by providing comprehensive scientific and technical expertise, strategic lab data collection advice, and end-to-end analytical and logistical solutions tailored to each trial.
The acquisition of A4P Consulting by LabConnect significantly enhances LabConnect’s industry-leading position. This strategic move unlocks exciting opportunities for both companies to broaden their geographic reach and enhance their service offerings. Ian James, PhD., Co-Founder and CEO of A4P, expressed his enthusiasm for the future:
“I am excited for the future for both our customers and our valued staff, and grateful to the team at Kreston Reeves for bringing their experience and insights to get this deal across the line.”
The Kreston Reeves transaction advisory services team, led by Partner Scott Mile and Business Advisory Manager Jak Hill, with tax advice from Director Michael Haig, played a pivotal role in bringing this deal to fruition. Their expertise and insights were instrumental in navigating the complexities of the transaction, ensuring a successful outcome for all parties involved. This highlights Kreston Reeves’ exceptional capabilities in transaction advisory services.
Dawn Sherman, CEO of LabConnect, highlighted the complementary experience and expertise that A4P brings. The combined strengths of both companies provide clients with unprecedented access to cutting-edge scientific solutions, furthering the mission to create healthier communities and improve patient lives by accelerating the development of medicines.
If you would like to speak to one of our experts about transaction advisory services at Kreston Global, please get in touch.
Aurore Calvi is the Managing Director of OmniTrust. With a distinguished career spanning over 25 years in a Big Four accounting firm and various fiduciary organisations, she has held the position of CFO at Capita Assets Services/Link starting in 2009 and became a CSSF-authorised director in 2015, a role she fulfilled until her departure in late 2018. In 2019, she founded OmniGroup. Since 2022, she has been a board member of the Order of Chartered Accountants of Luxembourg, representing small and medium-sized firms within the profession at the board level.
June 12, 2024
The Luxembourg wealth tax has been found unconstitutional in a landmark ruling on 10 November 2023. The Constitutional Court of Luxembourg found point 2(a) of paragraph 8 of the amended law from 16 October 1934, part of the wealth tax legislation known as the “Vermögensteuergesetz” (VStG), to be unconstitutional. This provision, amended on 23 December 2016, has been a cornerstone of Luxembourg’s wealth tax framework.
Paragraph 8 of the VStG specifies:
The Constitutional Court’s ruling was based on two key constitutional principles:
The Court determined that the EUR 350,000 threshold for financial assets in point 2(a) lacked rational justification, thus infringing on these principles. Consequently, this provision was declared unconstitutional effective 1 July 2023.
The decision significantly affects companies with a balance sheet total between EUR 350,000 and EUR 2 million, where financial assets make up over 90% of the total. For these companies, the applicable minimum net wealth tax should now be EUR 1,605 instead of EUR 4,815, aligning with point 2(b) of paragraph 8.
Pending new legislation, the Court recommends applying the more favourable point 2(b) provision whenever it benefits the taxpayer more than point 2(a). This ruling underscores the necessity for rational and equitable tax thresholds, ensuring fair treatment of all taxpayers.
This decision prompts a review of Luxembourg’s wealth tax laws to better align them with constitutional principles, providing clarity and fairness within the tax system. Businesses and financial professionals in Luxembourg should stay informed of legislative updates to ensure compliance and optimise their tax strategy.
This decision is significant for several reasons:
If you would like to speak to an expert on tax in Luxembourg, please get in touch.
Experienced Managing Director with a strong background in business development, strategy, and leadership. A licensed Certified Auditor and Accountant and Registered Court Expert with expertise in economics and finance. Extensive board and committee membership, including the Supervisory Board of Unicredit bank Serbia and AmCham Tax and Finance Board. Published author in reputable business publications. Holds a Master’s degree in Quantitative Finance and a Bachelor’s degree in Economics. Fluent in Serbian and English with limited working proficiency in Spanish. Committed to driving growth, delivering results, and fostering strategic alliances. Jelena holds qualifications from the East China University of Science and Technology and the University of Belgrade, Faculty of Economics and Business.
June 4, 2024
The Serbia-China Free Trade Agreement (FTA) signed on October 17, 2023, represents a significant milestone for the two nations and in the broader context of international politics, particularly the dynamics between Europe and China. This agreement is noteworthy for several reasons:
This FTA is the first of its kind between China and a Central Eastern European country, positioning Serbia as a pioneer in this new phase of economic relations with China. It marks a departure from China’s previous European FTAs with nations like Switzerland, Iceland, and Georgia, extending its reach into a region where such agreements have been absent.
The agreement promises to enhance trade and cooperation across automotive, technology, agriculture, and commodities sectors. In 2022, bilateral trade between China and Serbia was valued at approximately $3.55 billion, with Serbia exporting mainly ores, slag and ash, copper, and electrical equipment to China. Conversely, China’s exports to Serbia included machinery, electronic equipment, and vehicles. This FTA aims to further increase this trade volume by eliminating tariffs on a significant portion of goods, creating opportunities for both countries.
Serbia’s active participation in China’s Belt and Road Initiative (BRI) signifies a deepening of strategic ties. China has been heavily involved in infrastructure projects in Serbia, including the construction of highways and power plants, reflecting a growing economic partnership under the BRI framework.
The FTA represents a notable divergence from the path Serbia has been expected to follow in its pursuit of EU membership. The European Union, which has been cautious in its trade dealings with China and does not have an FTA with Beijing, may view this agreement as a significant deviation from Serbia’s expected alignment with EU policies and standards.
The slow pace of Serbia’s EU accession negotiations has created a void, which China appears eager to fill. This FTA can be seen as Serbia seeking to diversify its economic alliances and reduce its dependence on European markets, in response to the protracted EU integration process.
This development poses a challenge for the EU, highlighting the need for a nuanced approach towards aspirant countries and their international agreements. The EU may need to address the implications of China’s increasing economic presence in regions traditionally under EU influence, especially among countries awaiting EU membership.
In summary, the Serbia-China FTA is a landmark development, highlighting shifts in global trade dynamics and the evolving relationship between Europe and China. It reflects Serbia’s strategic navigation of international relations amidst delayed EU accession and China’s expanding influence in regions critical to European interests.
If you would like to speak to one of our specialists in Serbia, please get in touch.
Aurore Calvi is the Managing Director of OmniTrust. With a distinguished career spanning over 25 years in a Big Four accounting firm and various fiduciary organisations, she has held the position of CFO at Capita Assets Services/Link starting in 2009 and became a CSSF-authorised director in 2015, a role she fulfilled until her departure in late 2018. In 2019, she founded OmniGroup. Since 2022, she has been a board member of the Order of Chartered Accountants of Luxembourg, representing small and medium-sized firms within the profession at the board level.
June 1, 2024
Luxembourg’s 2024 investment tax rebates are set for significant changes following the recent passage of Bill No. 8276 by the Chamber of Deputies. This bill aims to reform Article 152bis of the Income Tax Law (LIR), focusing on tax rebates for investments. The new regime, effective from the 2024 tax year, introduces substantial benefits for companies investing in digital transformation and ecological and energy transition projects.
Under the existing Article 152a LIR, commercial, industrial, mining, or craft enterprises in Luxembourg can apply for an investment tax credit. This incentive comprises two parts:
Complementary investment credit
Overall investment credit
The 2024 reform abolishes the additional investment tax rebate and adjusts the overall investment tax credit as follows:
Global investment credit
Digital transformation and ecological transition projects
Digital Transformation: Implementing new or significantly improved production or distribution methods using digital technologies.
Process Innovation: Significant changes in production or distribution methods excluding minor improvements or capacity increases.
Organisational Innovation: Implementing new organisational methods or improving company relations, excluding minor procedural changes.
Circular Economy: Maximising the value and use of resources to reduce environmental impact and waste.
Ecological and Energy Transition: Significant technical changes reducing environmental impact in energy production and resource use.
Eligible investments and expenses include:
The process to claim these rebates involves obtaining eligibility and compliance certificates from the Minister of the Economy, and verifying the investments and expenses made.
This reform aims to incentivise Luxembourg companies to invest in innovative digital and ecological projects by providing substantial tax rebates. By encouraging such investments, Luxembourg positions itself as a leader in digital transformation and sustainable development.
For more detailed information on the eligibility criteria and application process, consult the full text of Bill No. 8276 or contact the Luxembourg tax authorities.
If you would like to speak to an expert in Luxembourg, please get in touch.
May 30, 2024
OmniTrust has written a guide to setting up a business in Luxembourg. Luxembourg is a dynamic, multicultural country with 645,000 residents, 47.5% foreigners from 175 nationalities. It benefits from a central location in Western Europe, sharing borders with Belgium, Germany, and France, making it an ideal hub for business and travel.
Luxembourg’s strategic position in the heart of Europe provides excellent connectivity through a highly developed logistics infrastructure. This accessibility, combined with a high quality of life, makes Luxembourg attractive for businesses and residents.
Luxembourg City hosts numerous European institutions, such as the European Court of Justice and the European Investment Bank, making it a key player in European politics. It is also one of the world’s leading financial centres, particularly in the fund sector, boasting over 125 banks and a significant market share.
Luxembourg operates as a constitutional monarchy with a stable political environment that supports integration. It has a 60-member Chamber of Deputies elected every five years and a government led by a Prime Minister appointed by the Grand Duke. The country is a founding member of the EU, Eurozone, NATO, and other international organisations, and it allows long-term foreign residents to vote in local and European elections.
Luxembourg’s economy is open, diverse, and stable, with one of the highest per capita GDPs globally. The country ranks highly in international competitiveness and political stability, and it is a leader in the finance, logistics, and technology sectors. Luxembourg boasts a skilled, multilingual workforce and an impressive infrastructure supporting innovation and business growth.
Luxembourg is the fifth largest financial centre in the EU and a top green financial centre globally. It is home to various international banks, investment funds, and insurance companies. The country’s robust regulatory framework and investor protection measures attract significant financial activity, making it a central global finance and investment hub.
Luxembourg’s business-friendly environment has attracted many multinational companies, including ArcelorMittal, Goodyear, Amazon, and Google. Luxembourg’s strategic location, skilled workforce, and supportive policies benefit these companies.
To operate in Luxembourg, businesses must obtain necessary government authorisations. This involves registering with the Trade Register, the Joint Social Security Centre, and tax authorities. Certain professions require specific permits and qualifications.
Businesses in Luxembourg can be structured as sole proprietorships or various types of companies, such as SAs, SARLs, and SARL-Ss. Each structure has specific requirements regarding capital, shareholder liability, and management.
Setting up a business involves several steps, including identifying beneficial owners, checking name availability, opening a bank account, and formally incorporating the company. Compliance with regulatory bodies is crucial for a successful establishment.
The Labour Code and employment contracts govern labour relations in Luxembourg. The country maintains high standards for employee rights, including fair wages, reasonable working hours, and comprehensive social security benefits.
Luxembourg offers various support measures for businesses, including subsidies for R&D, investment projects, and training. These initiatives aim to foster innovation, competitiveness, and business growth.
Luxembourg’s competitive tax policy includes a maximum effective corporate tax rate of 24.94%. The country provides numerous tax incentives and reductions to support business investments and operations.
Luxembourg has the lowest standard VAT rate in the EU at 17%, with reduced rates for specific goods and services. Businesses must comply with VAT reporting and payment schedules to avoid penalties.
The social security system in Luxembourg covers a wide range of risks, including health, maternity, disability, and retirement. Employers and employees contribute to the system, ensuring comprehensive coverage for all workers.
Luxembourg supports businesses in protecting their intellectual property rights, offering tools and incentives to effectively manage patents, trademarks, and copyrights.
Luxembourg offers a high quality of life with efficient healthcare, attractive salaries, and a beautiful natural environment. The country provides excellent educational options and has made all public transport free.
Non-EEA nationals must obtain a residence permit from the Ministry of Foreign Affairs before settling in Luxembourg.
Luxembourg has one of the lowest personal income tax rates in Europe, with progressive rates based on income. Tax returns must be filed annually, with various deductions available for qualifying expenses.
Luxembourg imposes no inheritance tax for direct line inheritance, with varying rates for other degrees of kinship. Donation taxes range from 1.8% to 14.4%.
Employee social security contributions range between 12.20% and 12.45%, ensuring robust social protection for all workers.
OmniTrust provides comprehensive fiduciary services, assisting businesses from inception to daily management. Their expertise spans accounting, tax compliance, financial advisory, and operational support, ensuring seamless business operations in Luxembourg. Find more about them here.
May 22, 2024
Najat Moughil is a seasoned audit and consulting specialist, known for her expertise in consolidating accounts, implementing IFRS standards, and optimising financial processes. With a strong focus on enhancing internal controls and risk management, she excels in streamlining operations and meeting closing deadlines efficiently. Moughil also offers valuable support in project management, business ownership, and change management initiatives.
May 1, 2024
In recent years, Morocco has undergone significant transformations, positioning itself as a formidable player on the global stage. This strategic repositioning has not only altered perceptions of the North African nation but has also greatly influenced the landscape for doing business within its borders. Najat Moughil, Partner at Exco ACDEN discusses Morocco’s emergence as a global player has ushered in a wave of opportunities.
Positioned at the crossroads of Europe and Africa, Morocco plays a pivotal role in linking the economies of both continents, fostering trade, investment, and collaboration in various sectors. Morocco is member of the African Union and the leading investor in West Africa. Major Moroccan institutions such as
Attijariwafa Bank, Bank of Africa, and the OCP Group, a leading player in phosphate and fertiliser production, now exert significant influence in Africa.
Concerning Europe, Moroccan exports are primarily aimed at the Old Continent, comprising approximately two-thirds of the country’s total exports. Casablanca Finance City, an economic hub hosting over 200 international companies, is crucial in Morocco’s role as a bridge between Europe
and Africa. Thanks to its geographical location and political stability, strong and modern infrastructures, the implementation of ambitious sectoral strategies, highspeed industrialisation, the development of green energies and the signing of several free trade agreements with the world’s major economic players, Morocco offers a favorable environment for investing in various sectors: aeronautics, automotive, textiles, leather, agri-food and aggrotech, electronics, tourism, information technology, infrastructure and even energy.
In order to strength its position as logistic hub, Morocco made important investments in logistics projects, in ports and railways. In the automotive and aeronautical sectors, Morocco’s logistical role has already grown and investments in production facilities and logistical solutions have been made. Morocco’s automotive industry, aircraft parts manufacturing and mining are traditional industries that offer important export opportunities.
Morocco is also moving forward with various policies to unleash the potential of the private sector, including reform of the vast network of public enterprises and a revision of the investment charter.
The hosting of the 2030 World Cup will provide Morocco with a unique opportunity to extend its influence beyond the continents of Africa and Europe, as the tournament could inject up to US$ 1.2 billion into the Moroccan economy. In preparation, the country plans extensive upgrades to stadiums and
infrastructure, aiming to attract investments through incentives. Tourism is also expected to boom. Banks will benefit from increased infrastructure financing, while the telecoms sector will see higher traffic and investments in 5G technology. Despite the costs, the World Cup offers Morocco a lucrative return on investment and a lasting national legacy. Such a robust economic agenda requires the implementation of
complementary social reforms to ensure its benefits are equitably distributed and accessible.
Amidst efforts to fortify businesses, a parallel consideration arises for initiatives aimed at enhancing the welfare and security of Moroccan households. The efforts have so far focused on the social sectors, with a landmark initiative to expand access to national health insurance and family allowance systems.
In recent months, the Moroccan government has officially launched the registration process for the Direct Social Support program. This program is devised to offer direct aid to families, particularly those in need, including school-age children, children with disabilities, newborns, economically vulnerable families, and
those supporting elderly individuals. The program’s aim to improve socioeconomic conditions will foster economic stability, benefitting businesses operating in the country.
The Moroccan authorities remain committed to an ambitious program of structural reforms designed to put Morocco on a more solid and equitable growth path.
The government’s commitment to social welfare is paralleled by its ambitious environmental agenda. Just as the Direct Social Support program aims to uplift Moroccan households, the “Morocco Offer” seeks to elevate the country’s standing in the renewable energy sector, thereby securing a sustainable future for
all its citizens. On 11 March 2024, the Moroccan government made an official announcement unveiling the “Morocco Offer,” aimed at nurturing the growth of the green hydrogen sector. Prime Minister released a circular outlining a framework of incentives and assistance for potential project developers. This proposition targets investors keen on manufacturing green hydrogen and its byproducts and has attracted approximately a hundred domestic and international investors.
Morocco possesses significant potential for advancing its renewable energy sector, thanks to its abundance of wind and solar energy resources. With the world’s largest photovoltaic plant already in operation, the North African nation is committed to swiftly reducing its carbon footprint. Furthermore, prominent Moroccan companies such as OCP Group, demonstrate remarkable commitment to integrating renewable sources of water and energy into their production processes.
The alternative energies, energy efficiency and the circular economy are becoming the most attractive sectors in Morocco. In 2030, the country aims to reduce its energy consumption by 15% and to reach 52% of renewables in its power capacity.
Morocco’s strategic repositioning as a global player has significantly transformed its business landscape, attracting an influx of international investors. With many projects in progress, such as the gas pipeline between Nigeria and Morocco, the country is poised to become an even more significant player on the global stage.
If you would like to speak to one of our experts in Morocco, please get in touch.
