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Draft Bill No. 8669 introduces greater flexibility for incorporating Luxembourg private limited liability companies. The new draft legislation proposes to achieve this by allowing the payment of the initial minimum share capital to be deferred and be dealt with a post-incorporation item.
Introduction
Approved by the Luxembourg Government on 12 December 2025 and submitted to Parliament on 16 December 2025, Draft Bill No. 8669 on the deferred payment of the minimum share capital of private limited liability companies (société à responsabilité limitée, S.à r.l.) (the "Draft Bill") launches the legislative process to modernize the amended Law of 10 August 1915 on Commercial Companies (the "1915 Law").
Currently, incorporating a Luxembourg S.à r.l. requires a minimum share capital of EUR 12,000 (current article 710-5 of the 1915 Law), fully paid upon incorporation (current article 710-6 of the 1915 Law). This framework, inherited from the 1933 introduction of the S.à r.l. into Luxembourg legal framework, is viewed as overly rigid in light of modern business needs.
In practice, except for contributions in kind, this requirement of full payment of the initial share capital implies having a bank account opened in the company's name before its incorporation. It is a time-consuming process (given AML/CFT due diligence that needs to be performed by the bank) which can delay or even, in some circumstances, block a transaction.
The Draft Bill aims to enhance Luxembourg's competitiveness and align domestic law with flexibility permitted under EU law, while preserving safeguards for the third parties. The latter includes public disclosure of unpaid amounts, suspension of voting rights in case of default following a valid call for funds and liability of founders and transferors.
Scope of application
The Draft Bill removes the obligation of immediate full payment of the minimum share capital of an S.à r.l. upon incorporation, currently set out in article 710-6 of the 1915 Law.
Under new article 710-6, paragraph 1, second paragraph of the 1915 Law, unless the articles of association provide for a shorter period, payment of the minimum share capital may be deferred for up to twelve months following incorporation.
This flexibility is subject to clear limits:
- Amount deferred limited to the legal minimum. Any portion of the capital exceeding the legal minimum of EUR 12,000 must be fully paid upon incorporation.
- Limited to cash contributions. Contributions in kind must be fully paid at incorporation.
Importantly, the Draft Bill only allows for the deferral of the payment of the initial share at incorporation. Shares issued upon subsequent capital increases (including share premium, if any) must be fully paid immediately.
Liability of founders and transferring shareholders
To ensure a coherent liability framework, the draft proposes to transpose to the founders of a S.à r.l. the regime applicable to the founders of public limited companies (S.A.) through new article 710-7 of the 1915 Law, which organizes the liability of founders (A) and transferring shareholders (B).
A. Liability of founders
Founders' liability will extend to any portion of the incorporation capital that was not validly subscribed and to the effective payment of the incorporation capital, where applicable, upon expiry of the twelve-month period provided by the Draft Bill.
B. Liability of transferring shareholders
In the event of a transfer of shares, the Draft Bill mirrors the S.A. regime (current article 430-13, second paragraph of the 1915 Law) and sets out the rules of liability in the event of a transfer of shares which have not been fully paid at incorporation.
A valid transfer of shares releases the transferring shareholder from any contribution to debts incurred after the transfer, with respect to the company, and from any contribution to debts incurred after publication of the transfer with the Luxembourg Trade and Companies Register, with respect to third parties.
To the extent the transferring shareholders were required to contribute to debts pre-dating the transfer of its shares, it will have a right of recourse against its direct transferee as well as against any subsequent transferees (all of whom will be jointly and severally liable).
C. Sanctions for non-payment
Voting rights attached to shares for which the holder remains in default of payment of the subscription price despite a valid call for funds by the company shall be suspended for as long as such duly called and payable amounts remain outstanding.
Extension to simplified S.à r.l. (SARL-S)
The Draft Bill also clarifies that the deferred payment mechanism applies to SARL-S, subject to their specific statutory framework.
Practical implications
The proposed amendments would greatly facilitate the process of establishment of new companies. In particular, complex structures, frequently involving multiple S.à r.l. companies, could now be deployed swiftly without causing the risk of delaying a transaction.
Market participants will gain flexibility by being able to incorporate an S.à r.l. without first finalizing the opening of a bank account, while still complying with AML/CFT requirements, the observance of which is ensured by the notary before whom the act of incorporation is passed.
The legislative process is expected to continue over the coming months. To access the draft bill (French only): Dossier Législatif | Chambre des Députés du Grand-Duché de Luxembourg.
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