Working as an IT freelancer in Luxembourg is attracting more and more experts in development, cybersecurity, and project management. However, before landing your first assignments, it’s essential to understand the legal and administrative requirements that govern this activity. From business permits to social security registration, including invoicing and tax rules, Luxembourg’s regulatory framework can’t be improvised. This article guides you step by step to fully comply with your freelance practice in Luxembourg —and also presents solutions to simplify your daily life.
Being an IT freelancer in Luxembourg: what exactly are we talking about?
Working as a freelancer in Luxembourg is, above all, an independent activity, selling your services to client companies – local or international – without any subordination. For IT professionals, this concerns profiles such as:
- Web or mobile developer
- Cybersecurity Consultant
- IT Project Manager
- DevOps Engineer
- Cloud or data specialist
But to be recognized as a freelancer in Luxembourg, you still need to choose a compliant legal framework.
The different possible statuses for an IT freelancer
There are three main statuses that allow you to legally practice:
1. The sole proprietorship
The simplest to create, it is aimed at solo freelancers. It involves personal responsibility, and requires obtaining a business permit .
2. The company (SARL or SARL-S)
More structured, it allows for the separation of personal and professional assets. It involves more formalities (statutes, share capital, RCS filing, etc.).
3. Salary portage
This is an ideal solution for those who want to focus on their technical work. The umbrella company becomes the employer and handles legal procedures (contracts, contributions, declarations, etc.).
Why this choice is strategic for IT
The chosen legal status influences:
- Your legal obligations (VAT, social security, accounting, etc.)
- Your taxes
- Your social protection
- Your time available for your missions
In short: being an IT freelancer in Luxembourg is more than a status, it’s a choice of model . And that starts with understanding your administrative obligations , which we will detail in the rest of the article.
Establishment permit: a mandatory step for freelancers
First and foremost, any freelancer wishing to work in Luxembourg must check whether they are required to obtain a business permit . This is the first step to complying with the regulations , and is essential in most cases.
What is the establishment permit?
It is an official document issued by the Ministry of the Economy , which gives you the right to exercise a commercial, craft or liberal activity on Luxembourg territory.
Even for an intellectual activity such as IT developer or IT consultant , this authorization is generally required if you operate in your own name (sole proprietorship) or through a company (SARL/SARL-S).
Who must obtain it (and who can be exempted)?
You must apply if you are self-employed and:
- Reside in Luxembourg,
- Or are a cross-border worker working regularly in Luxembourg.
Exceptions :
- Not necessary in the case of salary portage: the authorization is then provided by the portage company ( 💡 big advantage ).
- If you work occasionally from abroad without a regular physical presence in Luxembourg (case to be validated on a case-by-case basis).
How to apply: step-by-step process
- Prepare your file :
- Identity document
- CV with proof of experience (e.g. previous missions)
- Proof of honorability (criminal record extract)
- Proof of professional qualification
- Certificate of residence (or address in Luxembourg)
- Submit the application online via MyGuichet.lu , or by post.
- Processing time : approximately 2 to 3 weeks.
- You will receive a receipt , then official authorization (valid without time limit as long as you carry out the same activity).
📌 Good to know :
- The authorization is individual and non-transferable .
- Any major change (activity, legal form, address) requires an update .
- Authorities may carry out post-facto checks (keep your documents up to date!).
Registration and administrative affiliations required
Once the establishment permit has been obtained , the IT freelancer must complete a series of registration and declaration procedures to comply with Luxembourg legislation. Here are the key steps.
Registration of the activity
➤ Trade and Companies Register (RCS)
- Mandatory if you are creating a company (SARL, SARL-S).
- Not mandatory for a simple sole proprietorship, unless you are carrying out a commercial activity.
Please note: IT consulting activity can sometimes be considered commercial → it is best to check with the Chamber of Commerce.
➤ Joint Social Security Center (CCSS)
- As a self-employed person, you must register with the CCSS .
- This allows you to contribute to health, retirement, accidents, etc.
- A minimum contribution base applies, even if you earn little at launch.
💡 In salary portage, this step is managed by the portage company .
Declaration of start of activity with the AED (VAT)
➤ VAT number
- To be requested from the Registration, Estates and VAT Administration (AED) .
- Mandatory if your turnover exceeds €50,000/year for services.
- Below, you may be exempt , but some customers (particularly businesses) prefer to deal with liable service providers.
➤ Periodic declaration
- Depending on your status, you must file monthly or quarterly VAT returns .
- Penalties apply for delay or omission.
Tax obligations of IT freelancers in Luxembourg
Once your activity has been declared, it’s time to address one of the most sensitive aspects of the freelance profession: taxation . As a self-employed person in Luxembourg, you are subject to several specific tax obligations, which vary depending on your legal status .
Personal income tax (IRPP)
If you operate as a sole proprietorship , your income is taxed in your name under income tax . Here are the main points:
- The system is progressive (from 0 to more than 40%, depending on the brackets).
- You are taxed on net profit (turnover – deductible expenses).
- You must file an annual declaration (form 100).
💡 Professional expenses (equipment, software, coworking, training, etc.) are deductible .
Corporate tax (IS) for SARL / SARL-S
If you operate through a company , it is liable for:
- From the collective income tax (IRC) : 17%.
- From a contribution to the employment fund : 7%.
- From a municipal commercial tax (rate depending on the municipality, ~6-10% in Luxembourg City).
👉 Added to this is your personal tax on the remuneration or dividends received .
Tax declarations to be respected
- Annual income declaration (personal or company).
- VAT declarations : monthly, quarterly or annual depending on turnover.
- Payment of provisional installments (quarterly).
⚠️ Any failure or delay may result in penalties!
Accounting: mandatory, but adaptable
- Self-employed people must keep simplified accounts (receipt/expense journal).
- Companies must keep complete accounts (balance sheet, income statement).
- Using an accountant is strongly recommended, especially when starting out.
Social security and social protection for IT freelancers
Contrary to popular belief, freelancers in Luxembourg do benefit from social security … provided they fulfill the necessary obligations. Paying contributions is not only legal, but also essential for accessing benefits in the event of illness, retirement, or an accident.
Affiliation to Luxembourg social security (CCSS)
As soon as you start your business, you must join the Joint Social Security Center (CCSS) . This affiliation allows you to activate the following rights:
- Health insurance (CNAM)
- Retirement (CNAP)
- Daily compensation in the event of work stoppage
- Family allowances and social benefits
- Contributions for work accidents
📌 This process is automatic if you are a salaried contractor: the contractor company becomes your official employer and takes care of everything.
How much does social security cost for a freelancer?
Social security contributions are calculated based on estimated annual net income (and adjusted the following year). For information purposes:
- Overall rate ≈ 24–28% of net income
- Minimum contributions even if turnover is low (approx. €500/month )
💡 Adjustments are possible in the event of fluctuations in activity or recent launches.
Contractual obligations and invoicing: staying square with your customers
Freelancing isn’t just about charging for a service; it’s also about properly contracting , anticipating disputes, and complying with legal billing requirements . Here’s what every IT freelancer in Luxembourg needs to know.
The mission contract: essential even for a short mission
A written contract, even a simple one, protects both the freelancer and the client. It should include:
- The contact details of both parties
- The precise description of the mission
- The amount, method and deadlines of payment
- Termination conditions
- Specific clauses: confidentiality, intellectual property, GDPR, late payment penalties
💡 Even if you work for an ESN or on a freelance basis, you can (and should) request a clear contract in advance.
Mandatory information on your invoices
In accordance with Luxembourg regulations, each freelance invoice must include:
- Your name/denomination and address
- The establishment authorization number
- Your VAT number (or exemption statement)
- The invoice number (unique, chronological)
- The detailed description of the service
- The amount excluding VAT , the VAT rate and amount, the total including VAT
- The date of issue and the date payment is due
⚠️ Any omission may result in the invoice being rejected … or even a correction in the event of an audit .
Specific cases: cross-border freelance and salary portage
The Luxembourg market attracts many freelancers residing in France, Belgium or Germany , particularly in IT. However, working in Luxembourg as a non-resident or through an umbrella company involves specific rules.
Cross-border IT freelance: what you need to know
Do you live in Metz, Arlon, or Trier and work for Luxembourg clients? Here’s what you should expect:
➤ Physical presence in Luxembourg
- To benefit from Luxembourg social security , you must generally work at least 25% of your time in the territory .
- Without this, you remain affiliated with the social security of your country of residence.
➤ Taxation: avoiding double taxation
- Luxembourg has signed tax treaties with bordering countries.
- You declare your income in Luxembourg, but sometimes also partially in your country (depending on cross-border tax thresholds).
💡 An accountant familiar with cross-border agreements is a real plus here.
➤ Legal status
- You can set up a Luxembourg company as a non-resident .
- Otherwise, you can opt for salary portage : simpler, especially for testing the market.
Salary portage: a secure framework without creating a business
More and more IT freelancers in Luxembourg are choosing payroll management to avoid legal complexities.
➤ How does it work?
- You sign a contract with a portage company (like SELKEA ).
- It invoices your clients for you, then pays you a net salary .
- You are declared as an employee , with a pay slip, full social security and tax form.
➤ Key Benefits
- No establishment permit required
- No accounting or VAT declaration to manage
- Health, retirement, and welfare coverage like an employee
- Ideal for beginners, cross-border workers or consultants on long-term assignments
➤ Who is it for?
- Experienced freelancers who want to delegate paperwork
- New independents looking for a secure environment
- Cross-border workers who want to access the Luxembourg market without creating a structure
Becoming an IT freelancer in Luxembourg is therefore a golden opportunity… provided you respect a precise legal and administrative framework . Here are the essential things to remember:
- Establishment permit : almost always required to practice.
- Registration with the CCSS, the AED, and possibly the RCS.
- Taxation adapted according to your status (sole proprietorship or company).
- Social protection to be provided, with incompressible contributions.
- Contracts and invoices strictly regulated by law.
- As a cross-border worker or beginner , salary portage offers a real turnkey alternative.
Want to get started without any hassle?
Whether you are a developer, consultant or project manager, SELKEA supports you with a salary portage solution designed for IT freelancers in Luxembourg:
👉 Administrative support
👉 Complete social protection
👉 Zero paperwork
💬 Contact us and request your salary portage income simulation!
