Domiciliation activity exercised when operating a business centre or a co-working space

Version of 17 December 2021

There is an increasing interest for business centres and co-working spaces in Luxembourg. This activity coincides with the development of the world of work in the recent years and may offer certain advantages. At first, most co-working spaces and business centres offered three service formulas to their clients, namely:

  1. they made a workstation available in the open space where the client may use a free working space and had his/her own locker to put away his/her belongings;
  2. they made a particular workstation available in the open space which is exclusively assigned to a specific client with the possibility to put away belongings in his/her own locker;
  3. they rented a private office which is closed and which has a telephone line and a shared internet connection.

The CSSF observed that this activity has since developed significantly and that these service providers allow now clients to establish their head office at the provider’s address and offer additional services, such as mail management, incoming calls handling or welcoming visitors. Some service providers even offer the possibility to register a head office at their address on the basis of “virtual offices” without the client being required to be physically present on site.

In view of this development, the CSSF reminds that offering a head office or a commercial or professional address to a company where the latter exercises its activities in the framework of its corporate purpose and providing any service related to these activities is considered as a company domiciliation activity within the meaning of Article 1 of the Law of 31 May 1999 governing the domiciliation of companies (hereinafter the “1999 Law”).

The CSSF considers that a service provider making its address available for companies to establish their head office or address through a workstation in an open space or a virtual office carries out a domiciliation activity.

In accordance with the administrative practice of the CSSF, the rental of a closed and private office to a company where it establishes its head office is, in principle, not considered as a domiciliation activity, if that it is a genuine rental, i.e. a lasting and permanent rental ensuring that the renter has private premises available for its exclusive use. Where services are provided to companies, the activity is deemed to fall within the definition of domiciliation of companies.

A rental of “closed and private” offices is not considered genuine where:

  • the renter has not private premises available for its exclusive use including a secured access;
  • the size of the office does not allow the effective exercise of the company’s activity;
  • the office is not occupied in a permanent and exclusive manner;
  • the effective management of the company is carried out remotely; or
  • the provider offers one or several of the following services to the renter:
    • receiving mail including, among others, receiving physical or digital mail or making letter boxes or lockers which are not private or secure available at the reception of the provider;
    • managing mail including, among others, its opening, digitalisation or its physical or digital transmission, as well as organising the dispatch of mail from the renter;
    • answering and/or transmitting phone calls;
    • organising meetings;
    • welcoming visitors.

Moreover, the CSSF deems that the incubators providing services as part of support to start-ups which are in the development phase of an innovative activity do not exercise a domiciliation activity within the meaning of the 1999 Law.

The CSSF would like to point out that members of the regulated professions referred to in Article 1 of the 1999 Law other than specialised PFS authorised as corporate domiciliation agents in accordance with Article 28-9 of the LFS, are exclusively entitled to domicile companies to whom they provide professional services. The domiciliation should only be ancillary to their main regulated professional activity.

As regards these regulated professions, any domiciliation activity exercised outside their main activity, such as operating a business centre or a co-working space, requires prior authorisation of the CSSF as specialised PFS according to Article 28-9 of the LFS.

The CSSF reminds that the breach of the provisions of Articles 1 and 2 of the 1999 Law constitutes a criminal offence which may be punishable by imprisonment of between eight days and five years and a fine of between EUR 1,250 and EUR 125,000.