Creating a Public Limited Company (SA) in Luxembourg

The Luxembourg société anonyme, or SA, is a public limited company with limited shareholder liability and detailed rules on management and control. It can suit a group subsidiary, a holding company or a project involving several investors. The legal form alone does not make a company eligible for a stock-market transaction. The issuer, the securities and the relevant market rules must still be assessed.

An SA requires at least EUR 30,000 of subscribed capital, meaning capital that shareholders commit to contribute. It must be formed before a notary and may have one shareholder. Its more formal management rules distinguish it from the SARL, a private limited liability company, and the SAS, a simplified joint-stock company.

The SA in plain terms

The SA is a legal entity in its own right and owns its assets separately from its shareholders. Shareholders are generally liable only up to their agreed contributions. A personal guarantee, conduct as a director or an unlawful distribution can create separate liability.

The current Companies Law allows one or more shareholders, whether individuals or legal entities. The company may carry on an operating activity, hold participations for its own account or combine both, subject to its corporate object and any activity-specific authorisation.

Share capital and contributions

The minimum subscribed capital is EUR 30,000. At least 25% of each share subscribed in cash must be paid when the company is formed. An SA formed entirely with cash at the minimum therefore starts with at least EUR 7,500 paid in. The company can request the unpaid balance under its articles of association, the document setting its internal rules, and the relevant company decisions.

Contributions in kind are assets provided instead of cash. They generally require a report from a réviseur d’entreprises, a qualified company auditor, describing the assets and how their value was assessed. The law provides exceptions to this report requirement. Each share must be at least one-quarter paid at incorporation, and shares issued for contributions in kind must be fully paid within 5 years. The company also needs enough resources for its activity and obligations, beyond meeting the capital minimum.

Shares and transfers

An SA may issue registered shares recorded in the holder’s name, bearer shares or dematerialised shares recorded in an account, subject to the legal conditions. Shares that are not fully paid remain registered. Bearer share certificates must be held by an authorised depositary.

Shares are transferable in principle, but the articles may require prior approval or give specified persons a priority right to buy, called a pre-emption right. Other transfer restrictions are also possible within the law. These rules help organise the arrival of new investors. The SARL has a more restrictive legal framework for transfers to people who are not already shareholders.

Governance choices

The SA offers two governance models. The one-tier model uses a board of directors. The two-tier model separates a management board from a supervisory board. A single-shareholder SA may have one director. Once the presence of several shareholders has been recorded, that arrangement may continue until the following ordinary general meeting. The ordinary minimum is then 3 directors.

Daily management may be delegated within the limits set by law and the articles. The board or management board retains responsibility for matters that have not been validly delegated.

Shareholder decisions

Shareholders approve the annual accounts, decide how to use profits or deal with losses and make the appointments for which they are responsible. Changes to the articles, including changes to capital, permitted activities or legal form, normally require an extraordinary general meeting before a notary.

The annual general meeting is held in Luxembourg within 6 months after the financial year end. The first meeting may take place within 18 months of incorporation, taking account of the first financial year and filing duties. Remote participation may be available where the law and articles permit it. A sole shareholder records decisions in writing, while the ordinary meeting rules continue to apply to an SA with several shareholders.

Audit and annual accounts

An SA that is not required to have a statutory audit generally has one or more commissaires aux comptes, responsible for supervising the company under company law. This role differs from that of an approved statutory auditor. An approved statutory auditor becomes required when the company exceeds two of the following three limits for two consecutive financial years under the Accounting Law and the 2024 size-criteria regulation.

Under the interpretation of the Accounting Standards Commission (CNC), a change in size category takes effect in the financial year after the second consecutive crossing. A newly incorporated company is classified using a good-faith forecast for its first year. The two-year rule therefore does not create an automatic audit exemption for a new SA. Listed securities and sector-specific rules can also require an audit regardless of size.

The approved accounts are filed with the Trade and Companies Register (RCS) within one month after approval and no later than 7 months after year end. The official filing guidance explains the publication sequence. Bookkeeping, tax returns and beneficial-owner information follow their own calendars.

Comparison with the SARL and SAS

The choice should follow the intended decision process, investor entry and exit, financing and control rights. Capital alone rarely decides the form.

Tax and recurring administration

An SA is fully taxable. The corporate income tax rate is 14% up to EUR 175,000 of taxable income and 16% above EUR 200,000, with an intermediate formula between those amounts. The employment-fund surcharge and municipal business tax are added. The official corporate tax table provides the current rates.

An SA used to hold participations may qualify for the participation exemption, which can exempt income and gains from those holdings if each condition is met. That outcome comes from tax law, not from the SA form or the SOPARFI label used for a company holding financial participations. Ongoing administration also includes accounting, annual company approvals, RCS filings and, where relevant, value added tax (VAT) and payroll.