Luxembourg adopts long awaited reform simplifying SARL incorporations

Luxembourg has taken a significant step towards modernising its corporate law framework by adopting a new law that will make Luxembourg private limited liability companies (SARL) incorporation simpler and faster. 

On 28 April 2026, the Luxembourg Chamber of Deputies adopted Bill of Law No. 8669, amending the law of 10 August 1915 on commercial companies to introduce greater flexibility in the incorporation of a Luxembourg SARL.

The reform removes practical hurdles that have long affected SARL incorporations and brings Luxembourg closer to modern European market practice, while preserving key creditor and investor protections. 

Key features of the new regime 

Under the adopted law: 

• the minimum share capital of €12,000 must still be fully subscribed at incorporation 
• however, the payment (liberation) of the minimum share capital may be deferred for up to 12 months following incorporation, instead of being fully paid on day one 

This change eliminates, in many cases, the need to open and fund a bank account prior to incorporation, allowing companies to be incorporated first and banking arrangements to follow. The same flexibility applies to simplified SARLs (SARL S).

Prior to this reform, a Luxembourg SARL was required to have a minimum share capital of EUR €12,000 and fully liberate this amount at incorporation. 

In practice, this required opening and funding a bank account before incorporation. Given increasingly stringent AML / KYC procedures, this process can be lengthy and has frequently delayed time critical structuring and investment transactions. 

Safeguards retained under the new law 

While introducing welcome flexibility, the law maintains important protections: 

• any amount exceeding the statutory minimum capital must still be fully paid at incorporation
• contributions in kind must remain fully paid at incorporation
• capital issued in subsequent capital increases must be fully paid on issuance
• unpaid capital must be disclosed, including in corporate documentation and accounts
• shareholders who fail to pay when duly called may temporarily lose voting rights, and liability regimes apply to founders and transferors of unpaid shares 

Objective of the reform 

The legislator’s objectives are clear: 

• to improve Luxembourg’s competitiveness compared to neighbouring jurisdictions
• to align Luxembourg law with EU level flexibility already available in other company forms
• to facilitate rapid company formation, particularly for investment structures
• to reduce unnecessary administrative and banking friction without undermining creditor protection 

Who benefits? 

The reform is particularly relevant for: 

• private equity, real estate and alternative investment structures requiring fast SPV setup
• corporate groups incorporating subsidiaries within tight transaction timetables
• start ups and entrepreneurs seeking greater cash flow flexibility at launch 

Timing and entry into force 

The law was adopted on 28 April 2026 and will apply once it enters into force following publication in the RESA. The new regime will apply to SARLs and SARL S incorporated after that date.

How Ogier can help 

Ogier’s Luxembourg Corporate team is closely monitoring the implementation of the new regime and can assist with: 

• assessing whether deferred capital mechanisms are appropriate for your structure 
• incorporating SARL and SARL S vehicles under the new framework 
• drafting or updating articles of association to reflect deferred payment mechanics and capital calls 
• advising on banking and AML practicalities now that pre incorporation funding is no longer systematically required 

Whether you are planning a fast track investment structure, setting up a Luxembourg subsidiary or launching a new business, our team would be pleased to support you. 

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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