A Q&A guide to outsourcing in Luxembourg.
This Q&A guide gives a high-level overview of legal and regulatory requirements on different types of outsourcing; commonly used legal structures; procurement processes; formalities required for transferring or leasing assets; data protection issues; supply chain compliance; specification, service levels and escalation; flexibility in volumes purchased; charging methods; customer remedies and protections; warranties and indemnities; term and notice period; termination and its consequences; liability, exclusions and caps; dispute resolution; and the tax issues arising on an outsourcing.
1. To what extent does national law specifically regulate outsourcing transactions?
There are no specific laws regulating either single jurisdiction or cross-border outsourcing transactions in Luxembourg. As with any contract, outsourcing contracts are subject to the rules of the Civil Code. Outsourcing contracts fall under the general regime of service contracts (louage d'ouvrage), as defined by Article 1710 of the Civil Code. The fundamental principle in contract law is that of freedom of contract (Article 1134, Civil Code). The parties to the outsourcing contract are therefore free to agree on anything that is not contrary to mandatory laws, public policy or morality.
However, the Law of 23 July 1991 on the regulation of sub-contracting activities (Law of 23 July 1991) applies to public procurements and outsourcing agreements exceeding EUR55,000 in value, and imposes specific rules on them.
To read the full article click on the following link: Outsourcing: Luxembourg Overview