Business Licence Reform in Luxembourg: What's New?

On 30 July 2018, the law of 18 July 2018 (the “Law of 2018”) amending the law of 2 September 2011 regulating access to the craftsman, tradesman, industrialist and certain liberal professions (the “Law of 2011”) entered into force in Luxembourg.

The previous regulation was one of the most restrictive in Europe and constituted a barrier to entrepreneurship in Luxembourg under which the competitiveness of the Grand-Duchy suffered.

In order to boost, support and promote investments and attract new entrepreneurs, the administrative procedure of requesting a business licence clearly needed to be eased and sped up.

The major innovations of the Law of 2018 are as follows:

  • The Law of 2018 facilitates access to large-scale retail store businesses (such as supermarkets and hypermarkets) by deleting chapter 6 of the Law of 2011. Setting up, expanding, taking over, transferring or changing the main commercial divisions of a sales area exceeding 400 square meters no longer requires the specific authorisation (procédure d’autorisation particulière) of the Ministry of Economy. This time-consuming process was only duplicating existing regulations in competition law and land use and urban planning law.
  • In accordance with the Law of 2018, obtaining a business licence for merchants/commercial activities and services no longer requires professional qualifications, such as a certificate of professional competence (diplôme d’aptitude professionnelle) or professional experience of three years and training. This change also applies to the Horeca (hotels, restaurants, etc.) and real estate sectors. Liberal professionals, such as architects and certified accountants, are not affected by this change.
  • Furthermore, the Law of 2018 has abolished the titles for counsel and economic counsel professionals. These professions do not require special business licences anymore but are covered by business licences used for commercial activities and services. Existing business licences for these professions remain valid but will be considered general authorisations for commercial activities and services; professional qualifications are no longer required. Only proof of good repute is still needed.
  • The Law of 2018 also erased the obligation to register diplomas for certain professions prior to the application for a business licence unless the Ministry of Economy considers such a registration to be needed to verify the qualifications of the concerned person.

From the foregoing, we can conclude that the changes the Law of 2018 brought to the process of requesting business licences were much needed and will most likely benefit the development of entrepreneurship in Luxembourg, especially for large-scale retail stores. Nevertheless, only time will tell if the new regulation will be strong enough to successfully compete with the laws applicable in the rest of Europe.