In Luxembourg, certain activities are subject to a business license (autorisation d’établissement) according to the amended law of 2 September 2011 regulating the access to the professions of craftsman, trader, industrialist and certain liberal professions (hereinafter the „Law“).

With respect to the territorial scope of application of the Law, although this question is not expressly regulated by the Law itself, it appears from the preliminary works on the Law that it was indeed the intention of the legislator that any person established in Luxembourg exercising activities falls within the scope of the Law, whether or not such activities are exercised on the national territory.

Therefore, any person established in Luxembourg whose activities are subject to authorization will have to request a business license even if these activities are carried out abroad.

Secondly, with regard to the material scope of application of the Law, it provides that: „no person may, for profit, exercise, on a principal or secondary basis, an independent activity in the field of trade, craft industry, industry or the liberal professions referred to in the Law without being the holder of an establishment permit“. (Article 1 of the Law)

The Law specifies that the term „commerce“ must be understood as „all economic activities that consist in carrying out commercial acts within the meaning of the Commercial Code, with the exception of industrial activities and services falling under the list of artisanal activities.“ (Article 2 of the Law)

As far as the rental of movable objects is concerned, there is no doubt. Under the terms of Article 2 of the Commercial Code, any purchase of goods or merchandise for the purpose of simply renting them for use, any rental following such a purchase, or any rental of movable property for the purpose of subletting, and any subletting following such a purchase, are deemed to be commercial acts.

Thus, the business of renting movable property of any kind for profit requires a prior establishment permit.

On the other hand, the rental of real estate / property is not considered a commercial act within the meaning of the Commercial Code and Luxembourg case law has recently reminded that the rental of real estate is a purely civil act by nature.

Consequently, the exercise of an activity of renting out real estate does not, in principle, fall within the scope of the Law for the landlord and would therefore not be subject to obtaining a business license.