Living in France, Belgium or Germany, founding in Luxembourg

You can own a Luxembourg company, manage it and hold its business permit while living in Arlon, Thionville or Trier. The permit conditions are the same ones a resident meets: professional integrity, professional qualification in line with the planned activity, establishment in Luxembourg, effective and permanent management of the business by the permit holder, and compliance with tax and business obligations. Residence is not among them.

What the cross-border version adds is two thresholds from two different legal systems: a day count that decides where your salary is taxed, currently 34 days a year for a French resident, and a percentage that decides which country's social security you pay into, starting at 25%.

These are not the same rule. The day counts sit in the double-taxation treaties and are published by the Administration des contributions directes; the percentages come from EU social-security coordination and the framework agreement on cross-border telework run by the CCSS. Both sets were read on those pages in August 2026.

The tax side: a day count per treaty

Each treaty fixes how many days a year a non-resident may work outside Luxembourg before Luxembourg's right to tax that slice of salary falls away. All three neighbours now sit on the same figure, each by its own protocol.

The German convention carries the same 34-day figure, and the ACD publishes all three in one FAQ answer.

The allowance covers more than its name suggests: the threshold does not cover telework alone — any other professional stay outside Luxembourg, such as a business trip or a training course, counts against the same allowance. And every working day counts towards the threshold, including part-time days and days with shortened hours. A short morning at the kitchen table is a whole day spent, and a client visit in Metz costs the same.

The consequence is stated plainly by the ACD: once the threshold is passed, Luxembourg loses the right to tax the salary earned for the work carried out outside its territory. That salary does not vanish. It leaves the Luxembourg base and is reconciled in your residence state's return, usually a year later. The founder version of the mistake is to treat the count as a home-office rule while trade fairs, training and client meetings eat the same allowance.

The social-security side: percentages, not days

Affiliation is a separate question, decided by EU coordination rather than by the treaty. Under article 13 of Regulation (EC) No 883/2004, pursuing a substantial part of your activity in the country where you live moves you to that country's system. The CCSS puts substantial at 25%, measured on working time and/or remuneration. Below 5%, activity is marginal and disregarded.

On top of that sits the framework agreement, in force since 1 July 2023 and covering cross-border telework between 25% and less than 50% of the employee's total professional activity. Germany, Belgium and France have all signed it, and an A1 certificate issued under it can run for up to 3 years.

The CCSS spells out the fallback: an employee who does not meet the framework agreement's conditions falls back on the ordinary EU coordination rules of Regulation (EC) No 883/2004.

This is filed, not assumed. The employer or its agent must file the request, using either an electronic declaration via SECUline (procedure DEMDET, available whatever the telework percentage), or the paper 'Exercice d'activites dans deux ou plusieurs Etats membres (pluriactivite)' form where telework is not 100% of working time, or the paper 'Demande de detachement dans un Etat membre (art. 12 du reglement n°883/2004)' form where telework is 100% of working time. A request can be backdated by up to 3 months, and only where the employee was already affiliated to Luxembourg social security throughout that period.

So the declaration belongs in the first weeks of the arrangement, not in the first audit.

Health cover runs on two registrations: a non-resident employee is in principle also registered with the sickness fund of their place of residence so that healthcare can be reimbursed there.

The two regimes do not talk to each other. A director can sit well inside the treaty day allowance and still be nowhere near the 25% social-security line — days against percentages of total activity, counted by two administrations that do not share a form.

The company still has to live in Luxembourg

A Luxembourg company needs its registered office at an address in Luxembourg, and that is the easy half. The tax test has two prongs: a company is resident, and so under unlimited tax liability, when it has its registered office or its place of effective management in Luxembourg.

Since a resident company is taxable on its worldwide income, a company that drifts out of Luxembourg management does not simply pay less. It argues with two administrations at once.

Company law starts from a presumption in your favour: the domicile of a commercial company sits at the seat of its central administration, which is presumed — until proof to the contrary — to coincide with its registered office. Read the middle clause twice. The presumption is rebuttable, and what rebuts it is your own calendar.

For the manager, the working test is a commute rather than a map: the director has to live within daily commuting distance of the office — there is no distance published in law, and the administration decides it case by case. A founder twenty minutes over the border is in a different position from one who flies in quarterly.

The permit law says the same thing in its own vocabulary: the manager must ensure day-to-day management of the business effectively and permanently, through a physical presence at the establishment, at premises amounting to an appropriate physical installation, adapted to the nature and the scale of the activities carried on. A bare letterbox is the classic false economy; the registered office guide covers what the address must satisfy.

The permit file, frontalier edition

Integrity is proved by the manager of the business in whose name the permit will be issued; and, where the business is operated as a company, also the person holding the majority of the shares and anyone who can exert a significant influence on the management or administration of the business. The second half matters across borders: a majority shareholder living abroad and holding no mandate is still inside the check.

One further document applies to non-residents, and to residents of under ten years: a declaration of non-bankruptcy, recent and unlimited in time and space, made before a notary in Luxembourgish, French, German or English — required of non-residents as well as of anyone resident in Luxembourg for less than 10 years; it must state that the applicant has not been involved in the bankruptcy of a business in their own name or in the bankruptcy of a company.

Alongside it go criminal-record extracts from every state you have lived in over the past 10 years, per guichet's integrity page. The papers are simple. The fetching is what takes weeks.

The permit itself costs €50 in chancellery duty. The ministry acknowledges receipt within 15 days and has 3 months to decide; the absence of a ministerial reply before the end of the 3-month period counts as a tacit authorisation. Where a foreign professional qualification has to be recognised, that window can be extended by 1 month, which is the branch that catches a diploma earned across the border.

The sequencing trips people up: the articles of association must be registered with the Trade and Companies Register before the permit is definitively granted, so the company exists before the permit is final, not the other way round.

Hiring, and the clocks that start with it

Two short clocks start the moment you have staff. The company registers as an employer within 8 days of starting the activity, and every new entry, resident or frontalier alike, is declared within 8 days. The fine does not bite immediately: it starts beyond a 30-day tolerance, at €50 per month of delay, capped at €2,500.

Common questions

Do I have to move to Luxembourg to be the manager?

No. Residence is not required; presence is. For effective management, the director has to live within daily commuting distance of the office — there is no distance published in law, and the administration decides it case by case.

What happens if I go over my country's day threshold?

The treaty answer is that once the threshold is passed, Luxembourg loses the right to tax the salary earned for the work carried out outside its territory.

Does teleworking change which country's social security I pay?

Not automatically. The framework agreement covers telework between 25% and less than 50% of the employee's total professional activity. Outside its conditions the ordinary Regulation 883/2004 rules apply, and there the line that matters is 25% of total activity in your country of residence.

How are dividends taxed if I live across the border?

Dividends paid out of the company carry 15% Luxembourg withholding tax before anything crosses a border. What your residence state then does with that withholding is set by the treaty covering your country, which is a different calculation from the one on your salary.

The checklist

1. Count days from day one. Keep one calendar of every working day spent outside Luxembourg (home office, client visits, training) and set it against your country's allowance above.
2. File the telework declaration, don't assume it. The employer submits it to the CCSS, and backdating reaches only 3 months.
3. Start the slow documents now. The notarised non-bankruptcy declaration and criminal-record extracts covering 10 years of residence are the long pole in the permit file.
4. Make the establishment match the story. Registered office, premises fit for the activity, and a manager whose presence there is a working routine rather than a paper one.
5. Diarise both CCSS clocks. Employer registration and every entry declaration go in the calendar before the first hire, not after.

What goes wrong in cross-border founding is rarely eligibility. It is a day count nobody kept and a declaration nobody filed.