The Simplified S.À R.L.: A New Tool To Support The Booming Luxembourg Startup Industry

Luxembourg once again strengthens its position as a leading European hub for startups and innovation with the adoption on 13 July 2016 of the bill of law 6777 establishing the simplified private limited liability company (“société à responsabilité limitée simplifiée” or “S.à r.l.-S”), which will enter into force on 16 January 2017.

The S.à r.l.-S has been designed to allow a natural person who wishes to test and develop business innovative ideas to create a tailor-made company in a timely and cost-efficient way, with a symbolic financial contribution - i.e. EUR 1 as a minimum starting capital - while benefiting from limited liability1.

The main features of the S.à r.l.-S – being a simplified variant of the traditional S.à r.l. – may be summarised as follows:

  • it can be incorporated under private seal instrument (i.e. without the need for a notary) with an initial corporate capital of between EUR 1 and EUR 12,000, which must be entirely subscribed and paid-up;
  • its capital is open to natural people only who further cannot be members of several S.à r.l.-S at the same time;
  • it can only be managed by a natural person; and
  • it can only carry out activities for which a business license is required (autorisation d’établissement) under the law of 2 September 2011 (which license must be obtained prior the formal incorporation of the S.à r.l. – S).

With its reduced costs of incorporation (i.e. around EUR 191), the S.à r.l.-S is for sure a dedicated vehicle for young talented entrepreneurs with limited financial resources but unlimited ideas.

Wildgen 4 Innovation and corporate practice group members are available to provide you with further information on this topic and discuss the advantages of the S.à r.l –S for your business.

1. In return, 5% of the net profits of the company shall be allocated, each year, to a specific – non distributable - reserve until the latter reaches EUR 12,000, making the S.à r.l.-S a transitory form of company.