Luxembourg corporate law update – Proposed reform of SARL minimum share capital rules

What’s new?

On 16 December 2025, the Luxembourg Government has introduced a draft bill proposing to amend the law of 10 August 1915 on commercial companies. The main purpose of the reform is to allow greater flexibility with respect to the paying-up of the minimum share capital of an SARL, which is the most commonly used legal forms of vehicles in Luxembourg.

Under the current legal regime, an SARL must have at least a share capital of EUR 12,000 fully paid up at the time of its incorporation. The proposed bill would maintain the legal obligation to subscribe in full to the share capital at incorporation, but would allow shareholders to defer the actual payment of the capital so subscribed for a period of up to twelve months following incorporation.

This deferral mechanism would apply to both standard SARLs and simplified SARLs. It would be possible only with respect to contributions in cash at the time of the incorporation, but not contributions in kind, which would still require a payment in full. The articles of association will have to set out expressly the timing and conditions of the deferred payment.

How is this relevant?

The Government’s objective is to facilitate faster and more efficient company formations, particularly in situations where the opening of a bank account or the completion of funding formalities may cause delays, sometimes to a substantial extent. 

By introducing this flexibility, the reform aims at aligning Luxembourg more closely with corporate regimes in other European jurisdictions and neighbouring countries (e.g. Belgium or France) and to reinforce its attractiveness for entrepreneurs, SMEs and investment structures.

The Bill also includes safeguards designed to protect creditors and ensure transparency. Founding shareholders would remain fully liable for any unpaid capital, and voting rights could be suspended in the event of a failure to comply with valid capital calls. In addition, notaries would continue to verify the subscription in full requirement at incorporation.

From a practical standpoint, the reform would ease cash-flow constraints at the incorporation stage while preserving the legal certainty of the SARL capital framework. However, it will require careful drafting of articles of association and shareholders’ arrangements, particularly in structures involving multiple investors or staggered funding. 

It is also noteworthy that this only pertains to incorporation stages, but not to subsequent capital increases in cash where the same practical challenges may often also be met in practice. 

Where do things stand?

The Bill is currently under review by the Chamber of Deputies and is also subject to the Council of State’s opinion. We recommend that clients planning to incorporate new structures monitor developments closely and seek legal advice to ensure compliance and optimal structuring once the reform is enacted.

Bli Sahone (White & Case, Trainee, Luxembourg) contributed to the development of this publication.

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