A 1933 rule finally relaxed
Since the SARL was introduced into Luxembourg law by the law of 18 September 1933, the rule had not moved: to incorporate a private limited company, you had not only to subscribe the full minimum share capital of €12,000, but also to pay it up, i.e. actually transfer it, at incorporation. In practice, that meant opening a bank account, depositing the funds and obtaining a blocking certificate before even going to the notary.
More than ninety years on, this requirement had become a well-known obstacle, all the more so as, for several years now, opening a bank account in Luxembourg has been an uphill struggle for companies: ever heavier due-diligence procedures, lead times measured in weeks or even months, and frequent refusals for certain company profiles. The result: delayed incorporations, cash tied up before any activity starts, and real difficulty in quickly creating acquisition or financing vehicles. The law of 18 May 2026, stemming from bill no. 8669 tabled in December 2025 and adopted by the Chamber of Deputies on 28 April 2026, addresses this: since 2 June 2026, payment of the minimum share capital of SARLs may be deferred.
What changes in practice
The new regime, written into the amended law of 10 August 1915 on commercial companies, is simple in principle: where shares are subscribed for cash contributions, payment of the minimum share capital, the famous €12,000, may now take place after incorporation, within a maximum of twelve months. The mechanism is optional, founders who prefer to pay up the capital immediately still can, and applies to SARLs and SARL-S (simplified private limited companies) alike.
The most tangible consequence: incorporation no longer depends on a bank account being opened beforehand, nor on the funds being paid immediately. A SARL can be created before the notary, registered and legally operational, while the capital is paid up in a second phase, according to the timetable set in the articles of association.
What does not change
The reform relaxes the payment timetable, but leaves the fundamentals untouched:
- The minimum capital remains €12,000 for the SARL: the reform does not reduce it;
- Full subscription remains compulsory at incorporation: every share must have a committed subscriber; only the payment may be deferred;
- The deferral only concerns the minimum share capital: any part of the capital above €12,000, as well as any share premium, must be fully paid up at incorporation. For a SARL incorporated with capital above the minimum, the practical benefit of the scheme is therefore much reduced;
- Only cash contributions are concerned: contributions in kind remain subject to their own regime and must be paid up in full;
- Compliance obligations (KYC / AML-CFT) remain unchanged: deferred payment in no way lightens identity and source-of-funds checks.
The safeguards to know
The legislator has paired this flexibility with several protective mechanisms, for the company as well as for third parties. Three deserve particular attention:
Suspension of voting rights. If a shareholder fails to pay the sums duly called by the management and fallen due, the voting rights attached to the shares concerned are suspended until the situation is regularised. A defaulting shareholder therefore cannot continue to weigh on the company's decisions.
Transparency towards third parties. The list of shareholders who have not fully paid up their shares, with the amounts still due, must be published after the balance sheet. Your partners, banks, suppliers and clients will therefore be able to see how much of the capital has been paid up.
A regulated regime for transfers. Partly paid shares may be transferred, but under a regime modelled on that of public limited companies: the transferor is released from obligations arising after the duly published transfer, with recourse between transferor and transferees. In practice, any transfer of shares not fully paid up will have to deal explicitly with the outstanding balance: who bears it, from when, and with what guarantees.
Who benefits most?
The parliamentary debates say so plainly: the reform aims to strengthen the attractiveness of Luxembourg against more flexible neighbouring jurisdictions, and to meet very concrete needs.
Business founders, first: it becomes possible to incorporate a company without tying up €12,000 on day one, and to pay up the capital gradually over twelve months, at the pace of the start-up. For an entrepreneur launching a project, the difference is tangible.
Investment structures, next: funds and groups that need to create acquisition vehicles or intermediate companies in a holding chain quickly gain precious time, as legal incorporation no longer waits for the bank account to be opened, often the longest step.
For the SARL-S, whose capital ranges from €1 to €12,000, the practical benefit of deferral remains modest where the capital is limited to a few euros: it becomes real as the capital approaches the ceiling.
Our advice before you start
This reform is a genuine step forward, provided it is used methodically. In our view, three reflexes are essential:
- Take care over the articles of association. Payment timetable, capital call procedures, consequences of default: everything is decided in the statutory clauses. A poorly adapted generic template can create more problems than the deferral solves.
- Anticipate the image given to third parties. Unpaid capital is visible (published with the balance sheet) and may raise questions with a banker or a partner. Depending on your project, prompt payment may remain preferable.
- Plan cash over twelve months. Deferral does not remove the obligation to pay up: it postpones it. The financing plan must factor in these instalments to avoid a capital call at the worst moment.
Thinking of setting up a company in Luxembourg, or restructuring an existing group? We assess with you whether the new regime is worthwhile, draft suitable articles and coordinate the incorporation from start to finish, notary included.