Every day, we put startups first. Our focus is laying the groundwork and providing the necessities for entrepreneurship in order to help business owners take on the adventure of creating a company. Following the information gathered from formal meetings and events, we have learned that certain startuppers trust us with their struggles and hold us accountable for malfunction on the administrative side, whether they be incoherencies or misunderstandings. We have decided to take the time to hear them clearly and the sympathize with their stories, and sometimes, as in the present case, to remain anonymous to avoid foiling their development plans. He who testified also demanded responses for you, dear readers. Let us know what you think about the situation. Share your opinion either in the comments below or by writing to us directly.
A few months ago, we stumbled upon a French entrepreneur freshly installed in Luxembourg and very sure of his decision to launch a startup. The man had heard and bought into arguments about the startup-friendly bureaucracy and direct access to different government services in the process of building a company here. What he did not expect is that after three months of work, his company would still not be officially established in the Grand Duchy, even though his contacts at different government institutions had taken considerable steps towards domicile his activities and R&D in the country.
“Given the size of the country, Luxembourg has all the cards needed to transform its lagging bureau into a real asset for startups.”
“First off, the company manager must submit a request at the Ministry of SME in order to obtain the authorization to carry out the aforementioned activity. This request can be done online via Guichet.lu or sent by the post. At first glance, it seems that this part of the process would be easiest online. However, such is not the case in practice.”
The problem rests in the fact that the online form is not totally comprehensive, mainly because it does not explain to the sender what s/he has forgotten at the moment of submission—documents that are absolutely necessary. Another example happens when a company has two managing partners, as the website does not allow submission of necessary information for each manager, only one.
We started our request online at the end of March and our company is still not official!
Once the request is submitted online, the administrative team got back to us with additional requirements that were not mentioned when we submitted said request. What is more, these additional requirements are done by the post, which slows down the process even more. I had to provide an attestation of honor because I was on Luxembourgish soil for less than five years. And yet, this attestation costs €180 and must be done before a notary in Luxembourg! The additional requirements this prolonged our request another two weeks.
The list of documents to provide for any request for authorization is provided by the House of Entrepreneurship, and it is obvious that it’s convenient for startups to be sure to provide the totality of the necessary documents before submitting any request. However, in order to avoid forgetting anything, we can see how the online system could be reworked, as many entrepreneurs have suggested, particularly by creating immediate notifications for missing or lacking documents. Such notifications would prevent submitters from doubting about seemingly incessant back and forths with the administration, the back and forths being in most cases sent by the post and not by email, creating the lengthiest part of the process.
“Startups’ frustration is huge because, without authorization, we can neither create the company nor open a bank account, which means we cannot account our services.”
Other startups have also spoken to us about very irregular and rare follow-ups from the side of the administration. The majority of them must get in touch with their administrative contact in order to get a status update of their dossier and make sure that everything is in order. On my last call, someone asked for my NACE codes, which were not a part of my initial request because such was not asked of me. I then had to send this information by email. Again.
It seems to me that the number of requests is becoming bigger and bigger, and so the Luxembourgish administration has a hard time keeping up. When someone asks for a deadline for the completion of his/her dossier, the administration indicates that they are overbooked and cannot give a precise date.
You have to understand us. Startups’ frustration is huge because, without authorization, we can neither create the company nor open a bank account, which means we cannot account our services. If Luxembourg really want to position herself as an agile startup ecosystem capable of easy access, she must clearly rethink the bureaucratic processes.
That said, until the present we have always found a listening ear in our efforts, and we appreciate the ability to be able to easily contact the ministries, which is different than other countries where services are just saturated. Complete digitalization of these processes would be welcomed with open arms, and doing so under 24/48h would be ideal. Given the size of the country, Luxembourg has all the cards needed to transform its lagging bureau into a real asset for startups.”