Self-employed in Luxembourg: there is no auto-entrepreneur status

In short. There is no auto-entrepreneur or micro-enterprise status in Luxembourg. No flat-rate social scheme, no lump-sum tax calculated on turnover. To start out on your own in the Grand Duchy, you register as self-employed in your own name, with a business permit, an affiliation to the Joint Social Security Centre and accounts to keep. The one real simplification close to the micro spirit is the VAT exemption up to €50,000 of turnover. Here is what that means in practice, especially if you are coming from France.

The question comes up constantly, above all from French cross-border workers: "how do I become an auto-entrepreneur in Luxembourg?" The answer fits in one line, and it often surprises people: that status does not exist here. Luxembourg never adopted the French-style micro-enterprise. That does not mean you cannot start on your own, quite the opposite, but the path has a different name and follows different rules. Better to know them before you invoice your first client.

Why everyone looks for a status that does not exist

The confusion comes from France. Since 2009, the auto-entrepreneur regime, later renamed micro-entrepreneur, has made starting an activity almost instant there: an online registration, social contributions charged as a percentage of turnover, tax that is often a flat rate, and bookkeeping reduced to a simple income log. Hundreds of thousands of French residents use it, and many, looking across the border at Luxembourg, naturally hunt for the local equivalent.

But the Grand Duchy made a different choice. There is no "micro" tax or social category reserved for small activities. A self-employed person invoicing €8,000 a year and another invoicing €200,000 fall under the same framework in principle, with obligations that grow with size, but with no flat-rate regime dedicated to the smallest. It is more demanding on paper, and sometimes more advantageous in reality, because contributions and tax are calculated on real income, not on a flat rate that can penalise a low-margin activity.

The real equivalent: self-employed in your own name

To work on your own in Luxembourg, the simplest route is to register as self-employed, a natural person, in your own name. You are not a company: you carry on a commercial, craft or professional activity under your name, your profit is added to your income, and you answer for your debts with your personal assets. It is the local counterpart of "going into business for yourself".

Three formalities frame this start, and none looks like the single click of the French auto-entrepreneur.

• The business permit. Most commercial, craft or industrial activities require this authorisation from the Ministry of the Economy before the first invoice, based on qualification and good repute. We set out the conditions in our guide to the business permit in Luxembourg.
• Social affiliation. Every self-employed person affiliates with the Joint Social Security Centre and contributes on their real professional income. Set these contributions aside as you go, or the year-end adjustment stings.
• The income tax return. The profit is taxed under personal income tax, on the progressive scale, in your own return. There is no turnover-based lump-sum payment as in the micro-enterprise.

If your project needs to protect your personal assets or gain banking credibility, the alternative is not a micro status but a company, most often a simplified Sàrl with reduced capital or a standard Sàrl. We compare the two paths in our article on setting up a Sàrl in Luxembourg.

France micro-enterprise, Luxembourg self-employed: the comparison

To see clearly, nothing beats a line-by-line comparison between the French reflex and the Luxembourg reality. The French thresholds change every year and do not apply here: this table is there to explain the logic, not to carry figures from one country to the other.

The lesson of the table: Luxembourg does not lock you into a micro-enterprise cap, but it does not hand you the social and tax flat rate that makes the French regime so comfortable either. You gain freedom to grow, you lose the automatic calculation. That is exactly where accounting support earns its place.

The €50,000 VAT exemption, the real local simplification

If one Luxembourg mechanism comes close to the "micro" spirit, it is the small-business VAT exemption. Since 1 January 2025, it applies up to €50,000 of annual turnover, with a 10% tolerance up to €55,000, as set out by the indirect tax portal. Below that threshold, you do not charge VAT and you do not file it, provided your invoices carry the wording "VAT not applicable, article 57bis of the amended law of 12 February 1979".

Watch out for two misconceptions. First, this exemption does not free you from keeping accounts: you still have to track your income, if only to prove you are staying under the threshold. Second, it has a downside: with no VAT charged, you cannot reclaim the VAT on your purchases. For an activity that invests in equipment or subcontracting, opting out of the exemption is sometimes more profitable. That trade-off appears in the first year, and it is far from obvious on your own.

French cross-border worker: what actually changes for you

Many people wanting to go self-employed live in France and want to work in Luxembourg. Good news: neither residence nor nationality blocks setting up as self-employed. What counts is the effective establishment of the activity in the Grand Duchy and compliance with local conditions, the business permit first among them.

The tricky part is not the setup, it is personal taxation, which straddles two countries and depends on your situation. Trying to combine a French auto-entrepreneur status with a self-employed activity in Luxembourg is a classic source of mistakes, because the two regimes do not stack cleanly. This is a case where we look at your file before deciding, rather than applying a generic recipe. For the Luxembourg accounting and social side, our dedicated article on the accountant for the self-employed and freelancers in Luxembourg sets out your real obligations.

What it costs, and when to get support

Let's be direct, because it is rare in our trade: not everyone needs an accountant from day one. If you start in your own name, under the exemption threshold, with a handful of invoices and no significant purchases, careful tracking often does the job in the first year, and we will tell you so rather than sell you something you do not need.

Delegating pays off as soon as the activity takes shape: you cross the exemption threshold and have to file VAT, you move to a company, you hire, or your invoice volume climbs. The Luxembourg market most often charges by the hour, with no posted price, which we break down in our article on what an accounting firm costs in Luxembourg. At Advena, support starts from €325 per month, all in: day-to-day accounting, VAT and eCDF filing, annual accounts and filing with the register for companies, payroll if you have staff, a monthly review with a dedicated manager and permanent real-time access to your books. No invoice lands outside the monthly fee, and you keep your books inside the Odoo we configure for Luxembourg, not in some corner you never see.

Frequently asked questions

Does the auto-entrepreneur status exist in Luxembourg?

No. Luxembourg has no auto-entrepreneur or micro-enterprise regime. To start out on your own, you register as self-employed in your own name, with a business permit, a social security affiliation and accounts to keep.

What is the equivalent of the micro-enterprise in Luxembourg?

The closest is being self-employed in your own name, combined with the VAT exemption up to €50,000 of turnover. That is the only simplification that echoes the micro spirit, but contributions and tax stay based on real income, not a flat rate.

Can a French cross-border worker be an auto-entrepreneur in Luxembourg?

They cannot be an auto-entrepreneur in Luxembourg, since that status does not exist there. They can set up as self-employed. Cross-border personal taxation is then examined case by case, and combining a French micro-enterprise with a Luxembourg activity calls for caution.

Do you need a permit to become self-employed in Luxembourg?

Yes, for most commercial, craft or industrial activities. The business permit is issued by the Ministry of the Economy on the basis of qualification and good repute, and must be obtained before the activity begins.

How much turnover can I make without charging VAT?

Up to €50,000 a year since 2025, with a 10% tolerance up to €55,000. Below that, you do not charge VAT, but you cannot reclaim it on your purchases either, and you still have to keep your accounts.

Going further

• Accountant for the self-employed and freelancers in Luxembourg
• Setting up a Sàrl in Luxembourg: steps, capital and procedures
• SARL-S in Luxembourg: setting up a company with reduced capital
• The business permit in Luxembourg: conditions and timelines
• What an accounting firm costs in Luxembourg: fixed fee, hourly rates and hidden extras

Why Advena?

We are the only Luxembourg accounting firm that keeps your books inside the management tool it deployed for you. A fee announced in advance from €325 per month, a named manager, books kept up to date at all times, and not one surprise invoice. We inform you about the Luxembourg framework without replacing tailored tax advice, and if your activity is still too light for a monthly fee, we say so.