E-commerce: Online shops in Luxembourg are subject to certain compulsory legal processes and insurance. Got them covered?

⚖️How are online shops regulated by law?
 

Before you start jumping for joy when your first order comes in via your online shop, remember that this activity is still a business, which must comply with a certain number of rules and is governed by Luxembourg law. So there are a few formalities that you can’t avoid: 

Obtain a business permit
 

Any commercial activity in Luxembourg requires a permit issued by the General Directorate for SME, Craft and Retail. For an e-commerce activity, you’ll need to provide proof of appropriate professional qualifications.

Register your company
 

Before launching your online shop, you need to enter your company with the Luxembourg Trade and Companies Register (RCS). This includes choosing a suitable legal form, such as a limited company (SARL) or sole proprietorship.

File a declaration with the tax authorities
 

You must register with the Tax Authorities (Administration de l'Enregistrement et des Domaines) to obtain a VAT number, which is compulsory once your turnover exceeds certain thresholds.

🛒 What does Luxembourg law say about consumer protection?
 

Luxembourg legislation is aligned with European directives and imposes a number of obligations to protect consumers. 
 

For example, you’re required to provide clear pre-contractual information about your identity, your contact details, the characteristics of the products, prices including VAT, payment and delivery terms.
 

Consumers have the right to cancel their order within 14 days of receiving it. You need to inform your customers of this right and the procedures for returning products.
 

The legal guarantee of conformity is a minimum of two years for consumer goods.
 

Finally, you must respect the delivery times announced or, failing that, deliver within a maximum of 30 days following the purchase.

🕵️ Personal data protection rules
 

The General Data Protection Regulation (GDPR) applies fully to Luxembourg, so you must comply with it and follow these steps scrupulously:  
 

✅Make a declaration to the National Commission for Data Protection (CNPD): Although prior declaration is no longer compulsory, your company must keep a register of processing activities.
 

✅Respect the confidentiality policy: Your site must include a detailed policy explaining what data is collected and how it is used.
 

✅Obtain explicit consent: You must obtain users' consent for the collection of data that is not essential to the service (such as for marketing purposes).
 

✅Give access to the right to erasure: You must put in place procedures enabling users to exercise their right to data erasure.
 

What legal information should appear on your online shop? 
 

Your site must display certain legal information, such as:
•    Name and address of the company.
•    Trade and Companies Register number.
•    Contact details, including an e-mail address.
•    Intra-Community VAT number, if applicable.
 

Given Luxembourg's geographical position and small size, most e-tailers also target neighbouring markets (France, Belgium, Germany). This means you need to carefully look into the rules governing intra-Community VAT and the legislative differences between these countries.
 

The General Terms and Conditions of Sale - GTCS - are essential for defining the rights and obligations of each party, customer and seller, when selling online. They must be clear, accessible and easy to consult. These terms and conditions must include information on:
•    Prices and payment terms.
•    Delivery conditions.
•    Returns and refunds policy.
•    Processing of personal data.
 

Luxembourg is a multilingual country, so we recommend that you publish your e-commerce site in at least French, German and English to reach the entire population.

☂️ What insurance do you need for your online shop?
 

Taking out appropriate insurance is essential to protect your business against a whole array of risks. Here are a few types of insurance to consider:
 

Professional liability insurance
 

This insurance protects your company in the event of any damage you may cause to third parties in the course of your professional activity. This may include physical injury or material damage resulting from the use of your products.
 

A concrete example: A product sold by the company causes material damage, for example a fire caused by a faulty electrical appliance.
Depending on its extent, the cost of repairing the damage can run into tens of thousands of euros.

In Luxembourg, while not always legally compulsory for all types of e-commerce, it is strongly recommended. It also boosts the confidence of your partners and customers in your company, by demonstrating your ability to anticipate and manage risks.

Cyber risk insurance
 

Particularly relevant for e-tailers in an ultra-connected world and with cyber-attacks on the increase, cyber-risk insurance has become essential. It covers losses linked to data breaches, IT system failures or ransomware attacks.
 

Insurance for your property
 

If you hold a stock of products in a premises or warehouse, insuring "your property" can protect you against losses due to unforeseen events such as fire, theft or water damage.
You can also cover your IT equipment (computer, tablet, etc.) for these same risks.

Transported goods insurance
 

If you sell physical products, this insurance protects your goods during transport and delivery against theft, damage, loss and exceptional delays. 
 

Legal protection insurance
 

This insurance helps you cover legal costs in the event of a dispute with a customer or supplier. It can be particularly useful for dealing with complaints about the non-conformity of products or services.

Launching an e-commerce shop in Luxembourg requires you to comply with a precise regulatory framework and protect your business with appropriate insurance cover. All these steps may feel like a bit of a bind, but they lay the foundation for a secure, long-term business, both for you and for your customers. 
 

By complying with current regulations and protecting your company, you can develop your business with complete peace of mind. Don't hesitate to consult legal experts and your insurance advisor to make a success of your venture!