Learn how the sale of shares in Luxembourg works. Legal rules, procedures, tax implications, and practical guidance for investors and businesses.
The sale of shares in Luxembourg is a common transaction for investors, entrepreneurs, and companies operating in the country’s international financial hub. Under Luxembourg law, a transfer of shares is governed by both the Civil Code and the Company Law of 10 August 1915, as amended. Whether in a Société à responsabilité limitée (SARL), Société anonyme (SA), or other legal forms, the rules vary in terms of approval requirements, formalities, and tax treatment.
This article provides a comprehensive overview of how a share transfer works in Luxembourg, including the legal framework, step-by-step process, taxation aspects, and practical issues such as notarisation, shareholder approval, and registration. By the end, you will know exactly how to approach a sale of shares under Luxembourg law and what obligations to consider.
Luxembourg Company Law of 1915 (as amended)
Civil Code provisions on contracts and obligations
Commercial Register (RCS) obligations
Register of Beneficial Owners (RBE) rules
SARL (Private Limited Company)
Share transfers often require approval from at least 50% of existing shareholders, unless articles state otherwise.
Notarial deed required if capital increase accompanies transfer.
SA (Public Limited Company)
Shares are freely transferable unless restricted by articles of association.
Dematerialised shares may involve additional procedures.
SCA, SCSp, and other vehicles
Rules vary depending on partnership agreement or articles.
Due diligence: legal, financial, tax checks.
Valuation of shares: often supported by auditors or accountants.
Confidentiality agreement: signed before negotiations.
Key clauses include:
Identification of parties and shares transferred
Purchase price and payment terms
Representations and warranties
Conditions precedent (e.g., approvals, regulatory consents)
Governing law and jurisdiction
In SARLs, shareholders must generally approve the transfer.
In SAs, approval is not required unless articles impose restrictions.
Private deed or notarial deed (depending on company form)
Registration with Luxembourg Business Register (LBR/RCS)
Update of Register of Beneficial Owners (RBE)
For individuals:
Gains taxable if held < 6 months (speculative gain) or if >10% participation disposed.
For corporations:
Participation exemption may apply under conditions (≥10% or €6m investment, held ≥12 months).
No transfer tax on share sales, unlike real estate transfers.
Fixed registration duty (€75) when deed notarised or filed.
No withholding tax on share transfers.
Dividends may be subject to 15% WHT, unless reduced by tax treaties or EU Parent-Subsidiary Directive.
Luxembourg’s 80+ double tax treaties impact taxation.
EU directives apply for intra-EU transfers.
Escrow accounts often used to secure payments.
Earn-out provisions for future performance.
Certain industries (banking, insurance, investment funds) require CSSF or CAA approval.
Aspect | SARL | SA |
|---|---|---|
Transfer restrictions | Requires shareholder approval | Generally free |
Notarial deed | Sometimes required | Rarely required |
Registration | RCS + RBE | RCS + RBE |
Capital gains | Possible tax | Possible exemption |
Flexibility | Limited | Higher |
A Luxembourg SARL with 3 shareholders receives an acquisition offer for 40% of its shares. The SPA is negotiated, shareholders approve by majority, and the transfer is notarised and registered with RCS and RBE. Tax advisors confirm no registration tax applies, but the seller’s gain qualifies as taxable since participation was <10% and held for less than 6 months.
No. For SARLs, sometimes a notary is required, but for most SAs, a private deed suffices.
No stamp duty applies, but a fixed registration fee (€75) may apply if filed with RCS.
Yes. Luxembourg has a liberal investment regime, but regulated industries require approvals.
Individuals: speculative gains within 6 months, or >10% shareholding, are taxable. Corporations: participation exemption may apply.
Any change must be declared in the RBE within one month.
The sale of shares in Luxembourg is a straightforward yet structured process governed by company law, contractual freedom, and tax rules. Investors benefit from Luxembourg’s predictable legal framework, favourable tax regime, and cross-border treaty network, but they must carefully observe shareholder approval, RCS/RBE registration, and tax implications.
For personalised advice and execution of your share transfer in Luxembourg, contact Financial Services Luxembourg. Our team provides end-to-end support covering legal structuring, tax planning, and regulatory compliance.
“In today’s Luxembourg market, the sale of shares requires a rigorous approach. It is essential to carefully assess the company’s ownership structure, review the relevant contractual provisions such as shareholders’ agreements or approval clauses, and ensure full transparency on the tax implications. Being guided by a local expert who can navigate both accounting requirements and Luxembourg/EU regulations is a decisive factor in securing and optimizing such a transaction.” Mickaël LOC, Managing Director Financial Services Accountant Luxembourg
They talk about us, read an article on Financial Services Luxembourg, expert en création d’entreprise et services comptables
See also: Company Formation in Luxembourg
See also: Liquidation in Luxembourg
See also: Accounting & Tax Advisory Luxembourg