Luxembourg SARL reform: Draft law allows deferred payment of minimum share capital

On 16 December 2025, the Luxembourg government submitted draft law n°8669 to the Chamber of Deputies, proposing an amendment to the law of 10 August 1915 on commercial companies (the “1915 Law”). The draft law would allow Luxembourg private limited liability companies (sociétés à responsabilité limitée – SARLs) to defer payment of their statutory minimum share capital of EUR 12,000 for up to 12 months after incorporation.

If adopted, the reform would mark a significant evolution of the Luxembourg SARL regime, introducing greater flexibility in company formation while preserving core principles of creditor protection and legal certainty.

Modernisation of an outdated rule

Under the current Luxembourg company law framework, a Luxembourg SARL must have a minimum share capital of EUR 12,000, which must be fully paid up at the time of incorporation. This requirement, introduced by the law of 18 September 1933 and historically inspired by French company law, is increasingly viewed as rigid in light of modern corporate, investment and structuring practices.

In practice, the obligation to open a bank account and deposit the share capital prior to incorporation often delays the formation of new entities. These delays are frequently exacerbated by anti-money laundering and know-your-customer obligations imposed on financial institutions, which may require extensive due diligence before allowing capital payments.

By introducing a deferred payment mechanism, Luxembourg would align itself more closely with several other EU jurisdictions where full payment of share capital at incorporation is not always required and, in some cases, minimum capital requirements have been abolished altogether.

Key features of the proposed reform

Deferred payment of minimum share capital

Founders of a Luxembourg SARL would be permitted to defer payment of the statutory minimum share capital of EUR 12,000 for up to 12 months from the date of incorporation, unless the articles of association or the constitutive deed provide for a shorter period. This mechanism applies exclusively to contributions in cash.

Any capital subscribed in excess of the statutory minimum must, however, be fully paid at the time of incorporation.

Subscription requirement maintained

The reform does not affect the obligation to fully subscribe the share capital at incorporation. Full subscription remains a constitutive requirement for a SARL. The reform is limited to allowing a deferral of payment of the subscribed share capital and does not introduce any form of partial or progressive subscription.

No deferral for contributions in kind

Contributions in kind must continue to be fully paid at the time of incorporation, together with any issue premium (prime d’émission) relating to such contributions.

Issue premiums at incorporation

Where an issue premium is provided for in connection with the capital subscribed at incorporation and paid in cash, the draft law removes the obligation for immediate payment. Such issue premiums may be paid within the same 12-month period as the minimum share capital.

This flexibility does not apply to:

• issue premiums linked to capital exceeding the statutory minimum; or

• issue premiums related to capital increases after incorporation.

Capital increases excluded

Shares issued after incorporation, and any related issue premium, must continue to be fully paid at the time of issuance. The deferred payment regime is therefore strictly limited to the initial constitution of the SARL.

Suspension of voting rights

Where a shareholder fails to pay the amounts due following a valid and exigible call for funds, the voting rights attached to the unpaid shares are suspended until full payment is made.

Liability regime aligned with public limited companies

The draft law aligns the SARL regime with that applicable to public limited liability companies (sociétés anonymes – SAs), notably by:

• extending founders’ liability to cover the effective payment of the capital, including where payment has not been made upon expiry of the 12-month period; and

• limiting the liability of transferring shareholders in respect of post-transfer debts, subject to safeguards for liabilities accrued prior to publication of the transfer.

Disclosure of unpaid capital

To protect third parties, the identities of shareholders whose shares (or related issue premiums) have not been fully paid, together with the outstanding amounts, must be published alongside the annual accounts, in addition to existing disclosure requirements applicable where reference is made to the share capital in corporate documents.

Practical relevance for investors, entrepreneurs and other economic actors involved in structuring

The proposed reform is particularly relevant for:

• private equity and real estate structures, where rapid incorporation is required ahead of transaction closings;

• start-ups and SMEs, which may not have immediate access to the full amount of capital at incorporation; and

• investment funds, which frequently use SARLs companies as holding or acquisition vehicles and may face timing mismatches between incorporation and funding.

By introducing additional flexibility while maintaining transparency and creditor protection, the reform is expected to further enhance Luxembourg’s attractiveness as a structuring jurisdiction.

Next steps

The draft law will now be subject to parliamentary debate and may be amended during the legislative process. If adopted, it would represent a significant evolution of the Luxembourg SARL regime.

At Chevalier & Sciales, we regularly advise clients on Luxembourg company formation, structuring and corporate governance matters. We are closely monitoring the legislative process and will provide updates as the draft law progresses.

If you are considering the incorporation of a Luxembourg SARL, or reviewing existing structures in light of this reform, our corporate team remains at your disposal to assess its practical implications.