NEWSFLASH – Deferred payment of share capital: streamlining SARL incorporation
Luxembourg continues to modernise its company law with the introduction of a deferred payment mechanism for the minimum share capital of private limited liability companies (sociétés à responsabilité limitée, SARL) and simplified private limited liability companies (sociétés à responsabilité limitée simplifiées, SARL-S), as set out in Bill 8669, adopted at first reading by the Chamber of Deputies on 28 April 2026.
Until now, the founders of a SARL were required to subscribe and pay up the entire minimum share capital of EUR 12,000 prior to the execution of the notarial deed of incorporation. This requirement, dating back to legislation enacted in 1933, was at odds with the considerable difficulties and delays in opening a bank account, driven by the regulatory checks imposed on credit institutions. As a result, the incorporation of a SARL could be delayed by several weeks or even months, to the detriment of the speed required for investment transactions and business creation.
The reform is based on the principle of separating the subscription, which remains in full and is mandatory at the time of incorporation, from the actual payment of the share capital in cash. Founders now have a maximum period of twelve months from incorporation to pay up the shares corresponding to the minimum capital of EUR 12,000, in accordance with the terms set out in the articles of association or the deed of incorporation, which may provide for a shorter period. This flexibility means that a SARL may now be validly incorporated without any funds having been actually paid up. The articles of association must, however, specify the circumstances, dates or conditions under which the management (gérance) may call for payment, thereby providing flexibility aligned with the company’s actual cash flow requirements.
The deferred payment mechanism applies, however, only to contributions in cash and exclusively up to the amount of the statutory minimum capital of EUR 12,000. Any share capital exceeding that threshold must be paid up in full at the time of incorporation, as must contributions in kind. Similarly, the share premium must be paid in full at the time of incorporation. Finally, shares issued in connection with subsequent capital increases remain subject to the current regime of immediate payment.
The legislator has taken care to frame this new flexibility with safeguards inspired by the regime applicable to public limited companies (sociétés anonymes, SA). Founders are jointly and severally liable for the effective payment of the subscribed shares, including after the expiry of the twelve-month period. In the event of a transfer of shares that have not been fully paid up, the transferor is released from liabilities arising after the duly published transfer but retains joint and several recourse against the transferee and any subsequent transferees. Furthermore, voting rights attached to shares for which payments have become due and have been duly called by the management but remain unpaid are suspended until regularisation. The list of shareholders who have not fully paid up their shares, together with the amounts due, shall be published following the balance sheet, ensuring transparency vis-à-vis third parties.
From a practical standpoint, this reform is expected to significantly expedite the incorporation of Luxembourg SARLs, whether for investment or holding structures or for commercial companies that need to be established within tight timeframes or whose founders wish to defer the effective mobilisation of their contributions. This flexibility means that a SARL may now be validly incorporated without any funds having been actually paid up, or with funds having been only partially paid up. It brings Luxembourg closer to several European jurisdictions such as France, Germany, Belgium and the Netherlands, which already offer comparable or even greater flexibility.
Nonetheless, particular attention will be required to the drafting of the articles of association, which constitute the cornerstone of the mechanism by defining the schedule and terms of payment. It will also be essential to ensure that shareholders are duly informed of the consequences of a failure to pay up, including the suspension of voting rights and the potential triggering of the founders’ joint and several liability.
On 5 May 2026, the Council of State granted a waiver of the second constitutional vote at the request of the Chamber of Deputies, thereby enabling the definitive adoption of the law of 18 May 2026 amending the amended law of 10 August 1915 on commercial companies with a view to introducing the deferred payment of the minimum share capital of private limited liability companies (sociétés à responsabilité limitée). Following its promulgation and publication in the Journal Officiel du Grand-Duché de Luxembourg, the law will enter into force tomorrow, on 2 June 2026. It will apply to all SARLs incorporated thereafter, offering immediate benefits to founders seeking to streamline the incorporation process.
MOLITOR Avocats à la Cour is available to assist clients in setting up a SARL with deferred payment of share capital, including the drafting and adaptation of articles of association to incorporate appropriate payment call mechanisms, as well as advising on the practical implications of the new regime for upcoming incorporations and investment structures.