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Yes. Multilevel marketing is legal in Luxembourg under the Code de la consommation luxembourgeois. What Luxembourg law bans is vente pyramidale and vente &agrave; la boule de neige, where revenue depends on recruiting new participants rather than selling real products to genuine consumers.

A compliant MLM earns revenue from product sales to end consumers, with commissions tied to real sales activity. A vente pyramidale earns revenue from new participants paying entry fees or buying overpriced starter kits, with commissions tied to recruitment. Article L. 122-8 of the Code de la consommation lists pyramid schemes among unfair commercial practices banned in all circumstances.

What is the difference between MLM and a pyramid scheme in Luxembourg?

Yes. Anyone operating as a commer&ccedil;ant ind&eacute;pendant Luxembourg, including the MLM company and any distributor working as an independent agent, needs an autorisation d&#39;&eacute;tablissement. The application is filed via MyGuichet.lu with a LuxTrust certificat, and the chancellery duty is &euro;50. The autorisation establishes professional integrity and qualifications and is the foundation of all subsequent registrations (RCS, VAT, CCSS).

Do I need an autorisation d'établissement to run MLM in Luxembourg?

14 calendar days under Article L. 222-9 of the Code de la consommation for any contract concluded at distance or off-premises, including a home visit by a distributor. If the consumer was not informed of the right of withdrawal before the contract, the period extends by 12 months on top of the initial 14 days. This is one of the strictest extensions in the EU.

What is the cooling-off period for MLM purchases in Luxembourg?

The standard VAT rate is 17%, the lowest in the EU. Reduced rates of 14%, 8%, and 3% apply to specific categories. MLM operators with annual turnover below &euro;35,000 can benefit from the small-business VAT exemption (seuil franchise TVA 35000 Luxembourg) and not charge VAT at all. Above the threshold, VAT registration with AED is mandatory within 15 days of starting the activity.

What is the VAT rate for MLM in Luxembourg?

Three layers stack. Criminal sanctions under the Code de la consommation include fines and possible imprisonment for organizers. Administrative sanctions DPC Luxembourg under the Omnibus Directive can reach &euro;2 million or 4% of annual turnover, whichever is higher. GDPR fines from the CNPD can reach &euro;20 million or 4% of global turnover (the CNPD issued a &euro;746 million fine to Amazon Europe Core in 2021). Plus cross-border CPC enforcement: the 2021 LU/BE/FR pyramid case ended with coordinated asset seizures across all three jurisdictions.

What are the fines for running a pyramid scheme in Luxembourg?

Three big reasons. First, the 17% standard VAT rate is the lowest in the EU. Second, Luxembourg passporting EU MLM rights make it easy to expand across the EU from a single base. Third, the trilingual workforce (French, German, English plus Luxembourgish) covers the linguistic needs of MLM operations across most of Western Europe. Plus mature corporate infrastructure, banks that understand cross-border MLM, and a stable legal system.

Why launch an MLM company in Luxembourg specifically?

A complete legal guide to running MLM in Luxembourg: DPC and CNPD enforcement, vente pyramidale rules, autorisation d'établissement

MLM in Luxembourg: The Complete Legal & Compliance Guide

MLM in Luxembourg: Complete Legal & Compliance Guide | FlawlessMLM

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FlawlessMLM brand represents excellence in MLM software development and consulting since 2004

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FlawlessMLM provides comprehensive MLM software development, consulting, and business solutions for network marketing companies worldwide.

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