Today we're diving into the topic of who qualifies as an independent worker in Luxembourg.
In Luxembourg, if you're not a public official or employee of the state (fonctionnaire), then you fall into the category of either being an employee or an independent/self-employed worker. There's no middle ground like some other countries have with solo entrepreneurs or nomad entrepreneurs.
Being self-employed in Luxembourg means:
you work for yourself,
you take on full responsibility for managing your business activities, finances, and taxes,
you are responsible alone for financing your business,
you commit your personal assets to your business and assume all liabilities for debts incurred.
It's important to note that there's no distinction between your personal and business assets - you're on the hook for all business commitments.
In addition, you are registered with the social security authorities as a self-employed worker under the status of “independent.”
Some professions, like doctors, lawyers, architects, and IT consultants, typically qualify as independent workers. However, it's not always clear-cut, as some individuals in these fields may actually be employees rather than self-employed.
For example, a bit more than 70% of doctors are independent workers, while the rest are employees. This is a specific situation, which we’re not addressing today.
For those who own at least 25% of a company, you are automatically considered self-employed. Any ownership stake below that threshold may lead to an employment status within the company, as a subordination relationship must be present.
One last comment: people who own parts of their own company can pay themselves a remuneration every month or at the end of the year. Because of this monthly or annual payment (fiche de salaire mensuelle or annuelle), they are considered by the administration to be receiving a “salary” and from a taxation point of view considered “salariés” or employees – please make no confusion, this is only for tax purposes, you are still a self-employed worker and not an employee.
I hope this episode has shed some light on who qualifies as an independent worker. Thank you for joining us on this journey through the world of self-employment in Luxembourg. Don't forget to like and subscribe to my channel for more content, and stay tuned for the next episode of my series.
Let's demystify the world of independent work together!
Daniela Clara Moraru,
President,
Independent Workers Union
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