Luxembourg draft bill removes obligation to open a bank account before SARL incorporation

A new draft bill introduced before the Luxembourg parliament on 16 December 2025 aims to significantly modernise the incorporation of Luxembourg private limited liability companies, offering greater flexibility for structuring investments.  

The draft bill was introduced to amend the Luxembourg law of 10 August 1915 on commercial companies. It proposes removing the need to open and fund a bank account before incorporation and allowing the minimum share capital to be paid up to 12 months after incorporation, instead of being fully paid on day one. 

This is a welcome and pragmatic reform and brings Luxembourg closer to modern European practice. It removes a frequent practical obstacle and will make Luxembourg private limited liability companies (SARL) incorporation simpler and faster, while maintaining adequate creditor and investor protections. 

The current Luxembourg regime 

Under the current regime, a Luxembourg SARL must: 

• have a minimum share capital of €12,000, and 

• fully liberate this amount at incorporation 

In practice, this requires opening a bank account before incorporation, a process which is often lengthy due to AML / KYC procedures and can delay urgent structuring or investment transactions. 

What does the draft bill change? 

If adopted, the new regime will allow subscription of the full capital at incorporation, but:

• permits payment (liberation) of the minimum capital to be deferred for up to 12 months from incorporation 

• removes, in many cases, the need to open and fund a bank account before incorporation, allowing incorporation to proceed first and banking arrangements to follow 

• extends this flexibility also to SARL-S companies 

Certain safeguards would remain: 

• any amount exceeding the statutory minimum capital must still be paid at incorporation 

• capital in kind must still be fully paid at incorporation 

• capital issued in subsequent capital increases must remain fully paid on issuance 

• unpaid capital will be disclosed and unpaid holders may temporarily lose voting rights if they fail to pay when called 

What is the purpose of the reform? 

The bill seeks to: 

• improve Luxembourg’s competitiveness compared to neighbouring jurisdictions 

• provide flexibility aligned with EU company law frameworks 

• facilitate fast incorporation for investment structures and commercial entrepreneurs 

• reduce unnecessary administrative and banking friction 

Who benefits?

The proposed reform would benefit private equity / real estate / alternative investment structures needing fast vehicle setup. It would also benefit corporate groups incorporating subsidiaries quickly for transactions, as well as start-ups and entrepreneurs seeking cash flow flexibility at launch. 

When will this apply?

The regime will apply once the law is adopted and enters into force. For now, it is a draft measure and may still be amended during the legislative process. 

How Ogier can help 

Ogier’s Luxembourg Corporate team is closely following the legislative process and can assist with assessing the practical implications of the reform. Our experts can advise on structuring and incorporating SARL vehicles under the new framework and drafting constitutional and governance documentation reflecting deferred capital mechanisms. We can also support clients navigating banking and AML practicalities in light of the anticipated removal of the need for a pre-incorporation bank account.

Whether you are planning a fast-track investment structure, setting up a subsidiary, or launching a new business, our team stands ready 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.

Regulatory information can be found under Legal Notice