Introduction of the Luxembourg simplified limited liability company
Luxembourg Law of 23 July 2016 introduced recently the simplified limited liability company (“SARL-S”).
The purpose of this new type of limited liability company is to accelerate the company formation process and to reduce the costs in particular for businesses with low capital requirements.
This new corporate vehicle was inspired by other European countries that have previously simplified the possibility to set up limited liability companies (France :“EIRL”, Germany: the “Mini -GmbH”, Belgium: the ” SPRL- Starter” and Netherlands the “Flex -BV”).
The main innovations include:
- Possibility to set up the company by private deed (notarial deed no longer required)
- Minimum share capital as of EUR 1 (one), max. EUR 12,000 (twelve thousand)
- Only natural persons may be shareholders and directors of the SARL-S
- Mandatory commercial activity subject to business license (autorisation d’établissement)
- Contributions may be made in cash or in-kind
It is interesting to note that while the total costs of a “traditional SARL” may amount to approx. EUR 13,300 (capital included), the total costs for a SARL-S (capital included) may be less than EUR 200.
The new regime will become effective and SARL-S may be created as from 16 January 2017.