On 16 December 2025, the Luxembourg government introduced Draft Law no. 8669, proposing to allow the deferral of the share capital payment for companies having the form of a société à responsabilité limitée (“SARL”) for up to 12 months after incorporation. This reform would eliminate the current requirement to fully pay up the EUR 12,000 minimum share capital at incorporation, simplifying the process and aligning Luxembourg with practices in other European jurisdictions.
This article provides a brief overview of Draft Law no. 8669. It outlines the current legal framework, the key provisions of the draft bill, and the potential implications for company incorporation in Luxembourg.
The currently applicable regime
Under the current legal framework, it is mandatory to fully pay up the share capital of EUR 12,000 upon the incorporation of a Luxembourg SARL whereas, other Luxembourg company forms, such as the société anonyme (SA), already permit deferred payment of share capital. In practice, this amount must be deposited in a bank account opened in the name of the company at formation. The bank issues a blocking certificate and, following the incorporation, the notary provides an unblocking certificate enabling the release of the funds. This process might cause delays, as the opening of a corporate bank account can be complex and time-consuming in certain instances.
The Draft Law no. 8669
Key aspects
Deferral of the minimum share capital (and related share premium, if any) payment at incorporation
Draft Law no. 8669 aims to abolish the requirement to fully pay up the share capital upon incorporation. The Draft Law provides for the possibility to defer the full payment of the share capital for up to 12 months, unless the articles of association provide for a shorter period. The articles of association must explicitly specify the terms and conditions for any deferred payment.
Consequently, it would be possible to incorporate a SARL (or a simplified SARL) without immediately opening a bank account, which could instead be opened at a later stage. This would significantly simplify and accelerate the incorporation process.
Transparency
Furthermore, the Draft Law introduces transparency provisions: the list of shareholders who have not yet fully paid up their shares subscribed at incorporation, and any related share premium, together with the amounts owed, must be published following the balance sheet in the annual accounts.
Limitation to cash contributions
The scope of the planned reform is limited to cash contributions (up to a maximum amount of EUR 12,000, increased, where applicable, by any share premium) made at the time of incorporation. Structures involving a higher initial share capital (such as “alphabet shares”) would therefore only benefit from the deferred payment mechanism for the first EUR 12,000 of share capital (i.e. up to the minimum capital requirement), with any amount exceeding the minimum capital required by Article 710-5 being payable in full at incorporation.
The new mechanism does also not apply to contributions in kind, which would still need to be paid up immediately upon incorporation. Furthermore, the Draft Law permits deferral only for the payment of the initial share capital at incorporation. Any shares issued in connection with subsequent capital increases must be fully paid upon issuance. In such a case, a blocking certificate from a bank would still be necessary.
Liability of founding shareholders
The Draft Law also addresses the liability regime applicable during the deferral period. Shareholders remain liable for the amount of their shares and, where applicable, any related share premium, notwithstanding any provision to the contrary. However, a valid transfer of shares releases the transferring shareholder from liability towards the company for any debts arising after the notification of the transfer to the company (in accordance with the Luxembourg law), and from liability towards third parties for any debts arising after publication of the transfer.
Implications of the proposed law
The proposed amendments would significantly simplify the establishment of new companies. This is particularly relevant for young entrepreneurs and SMEs that may not have the required capital readily available or whose shareholders are less known to banks and require additional time to complete the currently mandatory and often burdensome bank account opening formalities prior to incorporation. Furthermore, this reform may also be of interest to larger corporate groups seeking to accelerate the formation of SARL companies.
In addition, the Draft Law aims to bring Luxembourg law in line with practices in other European jurisdictions, such as France, Germany and Belgium, where immediate full payment of the minimum share capital is not mandatory. This change is likely to enhance Luxembourg’s attractiveness and competitiveness as a business-friendly jurisdiction.
As of today, the Draft Law is still under review.
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