Luxembourg: Corporate and Company Law

Luxembourg's Business Register has clarified how beneficial ownership rules apply when companies are held through trusts or foundations, requiring entities to register the underlying trust or foundation's beneficial owners rather than applying the standard corporate ownership test. This interpretation, issued without a transitional period, means affected entities must immediately review their beneficial ownership filings to ensure compliance with the Register's position.

Luxembourg's Business Registers will begin enforcing compliance sanctions from September 2026, introducing a graduated penalty system for entities with incomplete or inaccurate RCS and RBE filings. The framework progresses from public warnings to daily fines of EUR 40 and potential deletion from the registers, with entities able to regularise their position at any stage to avoid escalating consequences.

Luxembourg has strengthened its enforcement framework for the Register of Beneficial Owners and Trade and Companies Register, granting the Luxembourg Business Registers new administrative powers to monitor compliance and impose sanctions. Starting September 2026, entities with incomplete or inaccurate filings may face progressive penalties including daily fines, administrative deregistration, and potential dissolution.

The Anti-Money Laundering Regulation introduces sweeping changes to EU financial compliance, establishing a EUR 10,000 cap on cash transactions, prohibiting anonymous financial instruments, and mandating the conversion of bearer shares. These measures fundamentally reshape how businesses handle large payments and corporate ownership structures, with strict deadlines and automatic penalties for non-compliance.

The Luxembourg Administrative Tribunal has ruled that repayments of share premium to shareholders, without a formal share capital reduction, do not qualify for tax exemption and may be subject to 15% dividend withholding tax. This decision challenges common corporate finance practices and raises important questions about the tax treatment of distributions from equity reserves in Luxembourg.

Luxembourg has introduced a new law allowing founders of private limited liability companies (SARLs) to defer the cash payment of the EUR 12,000 minimum share capital for up to 12 months following incorporation. This legislative change addresses the practical challenge of opening bank accounts before incorporation, enabling businesses to launch quickly without immediate funding requirements while maintaining statutory minimum capital safeguards.

The Luxembourg Stock Exchange (LuxSE) Euro MTF Specialist Securities Segment (EM3S) covering both debt and equity instruments now allows securities to be admitted to trading without being recorded in a central...

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EU policymakers are entering a phase of recalibration, simplifying sustainability rules while sharpening the EU competitiveness and industrial agenda.