A Société à responsabilité limitée simplifiée (Sàrl-S) is a Luxembourg private limited liability company introduced by the Law of 23 July 2016 (in force 16 January 2017) and governed by Articles 720-1 et seq. of the Law of 10 August 1915 on commercial companies. Its share capital is set between EUR 1 and less than EUR 12,000, fully paid up in cash at incorporation; its shareholders must be natural persons; and its activity is restricted to those requiring a business permit. With 6,190 active entities (10,384 including inactive), it is a low-capital onramp for solo entrepreneurs and micro-businesses.

Governing law	Loi du 23 juillet 2016 (in force 16 January 2017); Art. 720-1 et seq. of Loi du 10 août 1915 (consolidated)
Minimum capital	EUR 1, fully paid up in cash at incorporation
Maximum capital	Less than EUR 12,000 (commonly stated as EUR 11,999)
Apports in kind	Not permitted — cash contributions only
Shareholders	1 to 100 natural persons only (no legal entities); one Sàrl-S per natural person
Notarial deed	Not required — incorporation by private deed permitted
Management	One or more gérants, who must be natural persons
Tax regime	Opaque — CIT + municipal business tax + net wealth tax, on the same basis as a standard S.à r.l.

What is a Sàrl-S under Luxembourg corporate law?

The Sàrl-S is a low-capital variant of the S.à r.l., created to give individual entrepreneurs a fast, inexpensive route to a limited-liability company; it is governed by the same Loi 1915 framework, modified by Art. 720-1 et seq. inserted by the Law of 23 July 2016.

The Sàrl-S is intended for natural persons starting a commercial, industrial, artisanal, or certain liberal-profession activity. Its activity scope is bounded by the Law of 2 September 2011 governing access to those professions; an autorisation d’établissement (business permit) is required. Holding-company activity, banking, insurance, financial-sector activity, and the regulated investment vehicles (SICAR, SICAV, RAIF, SIF) are excluded by activity scope. The form is governed by the SARL rules of the 1915 Law except where Art. 720-1 to 720-6 modify them.

How much share capital does a Sàrl-S need?

Share capital is set between EUR 1 and less than EUR 12,000, fully paid up in cash at incorporation; in-kind contributions are not permitted, and a special legal reserve is built from 5% of annual net profits each year until capital plus reserve reaches EUR 12,000.

The “one-euro company” framing is statutory: a Sàrl-S can be incorporated with EUR 1 of cash capital. The capital must be fully paid up at incorporation, and only cash contributions are accepted — contributions in kind are excluded. The associates must build a special legal reserve from 5% of annual net profits each year until the sum of capital plus reserve reaches EUR 12,000. Bill of Law 8669, adopted by the Luxembourg Parliament on 28 April 2026, allows deferred payment of the standard S.à r.l. capital up to twelve months; its practical impact on the Sàrl-S is limited because the minimum is already EUR 1.

Who can be a shareholder, and how are shares transferred?

Shareholders must be natural persons (Art. 720-1), 1 to 100 in number, of any nationality or residence; a natural person may hold shares in only one Sàrl-S at a time except where shares are transmitted on death.

Legal entities cannot hold Sàrl-S shares; this is the defining departure from the standard S.à r.l. The one-Sàrl-S-per-person rule signals legislative intent: the form is a vehicle for individual entrepreneurship, not for group structuring. Shares are registered only (no bearer shares). Transfers to third parties require approval of associés representing at least three-quarters of the share capital, inherited from Art. 710-12 of the 1915 Law; statuts may lower the threshold to one-half. Each associé‘s identity, address, and shareholding are publicly filed at the Registre de Commerce et des Sociétés.

Who manages a Sàrl-S, and what governance applies?

Management is by one or more gérants who must be natural persons (Art. 720-1) — the Sàrl-S departs here from the standard S.à r.l., where a legal entity can serve as gérant since the 2016 reform.

Gérants may be associates or non-associates, of any nationality or residence. The natural-person-only gérant rule rules out using the Sàrl-S inside group structures with a corporate managing entity. The 60-associé threshold for a mandatory annual general meeting (Art. 710-15 of the 1915 Law, raised from 25 by the Law of 10 August 2016) and for a mandatory commissaire aux comptes applies to the Sàrl-S by reference, though Sàrl-S companies in practice rarely reach this threshold.

When does a Sàrl-S need an auditor?

A statutory audit by a réviseur d’entreprises agréé is required when the company exceeds, in two consecutive financial years, two of three thresholds: balance sheet total EUR 7.5 million, net turnover EUR 15 million, and 50 average full-time employees.

These thresholds, raised by the Grand-Ducal Regulation of 25 October 2024 implementing EU Directive 2023/2775 and applicable to financial years starting on or after 1 January 2023, apply to every Luxembourg commercial company including the Sàrl-S. Most Sàrl-S firms sit far below these levels. A commissaire aux comptes — a lighter oversight role inherited from the SARL rules — is required where the Sàrl-S has more than 60 associés, and is subject to pending abolition by Bill of Law 8286. See Luxembourg audit thresholds for the two-of-three test.

How is a Sàrl-S taxed?

The Sàrl-S is tax-opaque — taxed in its own name as a Luxembourg corporate taxpayer — subject to corporate income tax, the municipal business tax, and net wealth tax, on the same basis as a standard S.à r.l.

The combined effective rate of corporate income tax and municipal business tax in Luxembourg-Ville is 23.87% from 1 January 2025 (CIT 16% plus a 7% solidarity surcharge plus MBT 6.75%). Net wealth tax runs 0.5% on net assets up to EUR 500 million (0.05% above), with a progressive minimum of EUR 535 / 1,605 / 4,815 since FY 2025. Unlike a standard S.à r.l., the Sàrl-S cannot elect into the Soparfi tax regime, because financial-participation activity falls outside its authorised scope.

How long does it take to incorporate, and what does it cost?

Practical total: two to four weeks, materially faster than a standard S.à r.l. because no notarial deed is required (Art. 720-1) — articles of association can be signed under private deed and registered directly at the RCS.

The private-deed incorporation route is the Sàrl-S’s main procedural advantage. The associates sign articles of association, register at the RCS, and publish in the Recueil électronique des sociétés et associations; no notary fees apply. The business-permit application precedes or runs alongside RCS registration. Combined cost typically runs in the low hundreds of euros rather than the EUR 1,500–2,500 notarial range of a standard S.à r.l. The bank-account KYC procedure for the share-capital deposit remains the practical timing bottleneck, but the simpler capital range (EUR 1 to under EUR 12,000) reduces friction.

How does a Sàrl-S file annual accounts?

Annual accounts are approved by the associés within six months of FY-end and filed at the RCS within one month of approval, via eCDF and the LBR portal; abridged-format filing is available given the Sàrl-S’s typical size profile.

Sàrl-S firms typically file in abridged format, as the small-undertaking thresholds are far above their typical operating scale.

How does the Sàrl-S compare to the S.à r.l. and the S.A.?

	Sàrl-S	S.à r.l.	S.A.
Governing law	Loi 23 juillet 2016; Art. 720-1 et seq.	Loi 1915 Title VII (Art. 710-1 et seq.)	Loi 1915 Title IV (Art. 420-1 et seq.)
Minimum capital	EUR 1	EUR 12,000	EUR 30,000
Maximum capital	Less than EUR 12,000	None	None
Apports in kind permitted	No	Yes	Yes (with auditor valuation)
Paid up at incorporation	100% in cash	100% (deferral pending Bill 8669)	25%
Shareholders	1–100 natural persons only	1–100, natural persons or legal entities	1+ (no cap), natural persons or legal entities
One per natural person	Yes (except by inheritance)	No	No
Notarial deed required	No (private deed permitted)	Yes	Yes
Share form	Registered only	Registered only	Registered or bearer (depositary)
Manager (gérant) type	Natural person only	Natural person or legal entity	Director board
Mandatory AGM	If >60 partners	If >60 partners	Every year
Typical use	Solo entrepreneurs, micro-businesses, consulting	SMEs, holdings, family businesses, professional firms	Listed companies, regulated entities, joint ventures

The Sàrl-S, the standard S.à r.l., and the S.A. form a graduated capital ladder for closely-held businesses: the Sàrl-S removes the EUR 12,000 capital barrier for individual entrepreneurs; the standard S.à r.l. is the default form for SMEs once capital and structure mature; the S.A. fits when bearer-share flexibility, listing capability, or higher governance formality are required.

What this means for different readers

For a founder choosing between forms

Choose the Sàrl-S only if you are a natural person, your business needs less than EUR 12,000 of capital, your activity requires a business permit, and you do not need a holding company or financial-sector vehicle. Otherwise, the standard S.à r.l. removes the capital ceiling and accepts legal-entity shareholders, at the cost of a notarial deed and higher minimum capital.

For a cross-border worker, employee, or supplier

A Sàrl-S counterparty is a small Luxembourg-incorporated company owned by one or a few natural persons, with capital between EUR 1 and under EUR 12,000. Standard Luxembourg labour, social-security, and commercial-payment rules apply. The founders’ identities, addresses, and shareholdings are publicly filed at the RCS.

For a journalist, researcher, or due-diligence analyst

A Sàrl-S is structurally transparent: every associé is a named natural person whose identity, address, and shareholding are publicly searchable at the RCS. Each natural person may appear as an associé of only one Sàrl-S. Annual accounts are filed in abridged format in most cases. Material events (manager changes, transformation to a standard S.à r.l., transfers) are published in the Recueil électronique des sociétés et associations.

Common confusions

• The Sàrl-S is a distinct legal form, not a sub-type of the S.à r.l. It is governed by its own set of articles (Art. 720-1 to 720-6) inserted by the Law of 23 July 2016, and its shareholder, capital, and gérant rules are not interchangeable with the standard S.à r.l.
• The Sàrl-S cannot be a Soparfi or holding company. Holding-company activity falls outside the Sàrl-S’s authorised activity scope; founders who need a holding structure must use a standard S.à r.l. or S.A.
• The EUR 1 minimum is a legal floor, not an operating budget. Practical capital needs (bank-account opening fees, business-permit costs, operating runway) generally far exceed the legal minimum; the EUR 1 figure removes a legal barrier, not the underlying economic one.

Frequently asked questions

What is the difference between a Sàrl-S and a regular S.à r.l. in Luxembourg? A Sàrl-S has minimum capital of EUR 1 and maximum capital below EUR 12,000 (a regular S.à r.l. has EUR 12,000 minimum, no maximum); accepts only natural-person shareholders, with each person allowed to hold shares in only one Sàrl-S at a time; requires a natural-person gérant (a S.à r.l. may have a legal-entity gérant since the 2016 reform); accepts incorporation by private deed without a notary; and limits its activity scope to those requiring a business permit under the Law of 2 September 2011.

Can a Sàrl-S be used as a holding company or benefit from the Soparfi tax regime? No. The Sàrl-S’s activity scope is restricted to commercial, industrial, artisanal, and certain liberal-profession activities requiring a business permit under the Law of 2 September 2011. Holding-company activity, financial-participation management, banking, and insurance are excluded. Founders who need a holding vehicle must use a standard S.à r.l. or S.A. that can elect into the Soparfi regime.

What happens if a Sàrl-S grows past EUR 12,000 of share capital? The capital ceiling for a Sàrl-S is strictly below EUR 12,000. A Sàrl-S that needs to raise capital above that level must be transformed into a standard S.à r.l. The transformation requires an extraordinary general meeting of the associates, a notarial deed recording the change of form and the new capital, and RCS publication. The transformation is not automatic; it must be organised by the associates, and the company retains its legal personality through the change.

Can a non-resident form a Luxembourg Sàrl-S? Yes. Luxembourg corporate law imposes no nationality or residency condition on the natural-person associates or the natural-person gérant of a Sàrl-S. The company must, however, maintain its registered office in Luxembourg and obtain a Luxembourg business permit (autorisation d’établissement) for its declared activity. The business-permit process imposes its own honourability and professional-qualification conditions.

Does a Sàrl-S need a notary to be formed? No. The Sàrl-S is one of the few Luxembourg commercial forms that may be incorporated by private deed (Art. 720-1 of the 1915 Law as inserted by the Law of 23 July 2016). The associates sign articles of association without a notary; only RCS registration and publication in the RESA are mandatory. Subsequent changes of form, transformation into a standard S.à r.l., or capital increases above EUR 12,000 do require a notarial deed.

Sources

• Law of 23 July 2016 introducing the Sàrl-S and modifying the Law of 10 August 1915, Légilux — Mémorial A-N° 157, 4 August 2016 (doc. parl. n° 6777); in force 16 January 2017
• Law of 10 August 1915 on commercial companies (consolidated text, post-RGD du 5 décembre 2017 renumbering), Légilux — legilux.public.lu/eli/etat/leg/loi/1915/08/10/n1/jo
• Law of 10 August 2016 modernising the 1915 Law, Légilux — legilux.public.lu/eli/etat/leg/loi/2016/08/10/n3/jo
• Law of 2 September 2011 regulating access to the professions of artisan, commerçant, industriel, and certain liberal professions (governing the Sàrl-S activity scope), Légilux
• Grand-Ducal Regulation of 25 October 2024 updating accounting size criteria (implementing EU Directive 2023/2775), Légilux
• Grand-Ducal Regulation of 23 December 2016 on RCS formalities for the Sàrl-S, Légilux
• Bill of Law 8286 (pending) — modernisation of the accounting law and abolition of the commissaire aux comptes, Chamber of Deputies
• Bill of Law 8669 (adopted on first constitutional vote 28 April 2026) — deferred payment of S.à r.l. minimum share capital, Chamber of Deputies; CMS legal update 28 April 2026 (Sàrl-S practical impact limited given EUR 1 minimum)
• PwC Luxembourg Tax Summaries — combined CIT + MBT rate of 23.87% (CIT 16% + 7% solidarity surcharge + MBT 6.75% in Luxembourg-Ville) applicable from 1 January 2025
• Guichet.public.lu — Sàrl-S guide for entrepreneurs (FR and EN versions)
• Registre de Commerce et des Sociétés (LBR) — www.lbr.lu — authoritative source for Luxembourg active and inactive entity counts by legal form
• Practitioner notes consulted: CMS Lexology; RSM Luxembourg; Fiduciaire LPG; Damalion; PCG Lux (firms publishing public guides on the Sàrl-S regime; specific publication dates omitted pending verification per Findings_Log_v1_8.md W-Audit-fabrication)

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Loi du 23 juillet 2016 (Mémorial A-N° 157, 4 août 2016, doc parl. 6777) and entry into force 16 January 2017 verified against the Légilux Mémorial publication and the academic Corbisier paper (orbilu.uni.lu). Loi du 10 août 1915 (consolidated post-RGD du 5 décembre 2017) and the SARL-S sitting in Title VII, Chapter II of the consolidated text verified against the Elvinger Hoss consolidated text. Capital range (EUR 1 to under EUR 12,000), in-kind contribution prohibition, single-Sàrl-S-per-person rule, natural-person gérant rule, 100-associate cap, 5%-of-net-profits special reserve, and absence of statutory transformation deadline verified against Guichet.public.lu and corroborating practitioner sources. Bill 8669 adoption (28 April 2026) verified against Norton Rose Fulbright, CMS, NautaDutilh, PwC, and LPEA reports. Combined CIT + MBT rate 23.87% (FY 2025+) verified against PwC Luxembourg Tax Summaries. Specific Sàrl-S article-number attributions in the post-2017 consolidated text (Art. 720-1 et seq.) are plausible (Art. 720-17 is cited in a 2022 Chambre de Commerce avis) but the specific articles 720-1, 720-2, 720-3 with feature-specific meanings have not been verified against Annexe VIII of the RGD du 5 décembre 2017 correlation table; see Findings_Log_v1_8.md W-Audit-fabrication. Reviewed annually or sooner on regulatory change.

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A Société en Commandite Spéciale (SCSp) is a Luxembourg special limited partnership without legal personality, introduced by the Law of 12 July 2013 transposing the EU Alternative Investment Fund Managers Directive (AIFMD). Designed to replicate Anglo-Saxon limited partnership structures (Delaware LP, Cayman ELP, UK LP) under Luxembourg law, the SCSp has become the default wrapper for Luxembourg private-equity, venture-capital, real-estate, infrastructure, and debt alternative investment funds, prized for contractual flexibility, tax transparency, and partial confidentiality (the limited partnership agreement is private and limited-partner identities are not publicly disclosed).

Governing law	Loi du 12 juillet 2013 (AIFM Law) — introducing the SCSp into the Loi du 10 août 1915 (Title VII bis)
Legal personality	None — contracts in the name of the general partner
Minimum capital	None — no statutory floor; LP agreement sets economic terms freely
Partners	≥1 general partner (unlimited liability) + ≥1 limited partner (capped at contribution)
Notarial deed	Not required — private LP agreement
LP agreement public?	No — only a statutory excerpt filed at the RCS
Limited-partner identities	Private — only the general partner is publicly named
Tax regime	Transparent — no entity-level CIT, MBT, or net wealth tax

What is a SCSp under Luxembourg corporate law?

The SCSp is a Luxembourg special limited partnership without legal personality, introduced by the Loi du 12 juillet 2013 transposing AIFMD, governed by the 1915 Law as amended (Title VII bis) plus the AIFM Law where the SCSp qualifies as an alternative investment fund.

The 12 July 2013 reform did three things at once: (i) it transposed the EU Alternative Investment Fund Managers Directive (AIFMD, 2011/61/EU) into Luxembourg law; (ii) it modernised the existing Société en Commandite Simple (SCS) — already a Luxembourg legal partnership form since the 19th century — to make it competitive with Anglo-Saxon LPs; (iii) it introduced an entirely new vehicle, the SCSp, modelled directly on the Delaware LP and Cayman ELP, with the explicit policy goal of providing a Luxembourg-law alternative for international fund structures that had historically been domiciled in the British Channel Islands, Cayman, or Delaware.

The defining feature of the SCSp is the absence of legal personality. Where the SCS has its own legal identity and contracts in its own name, the SCSp’s contracts are entered into in the name of the general partner on behalf of the partnership. The SCSp has its own segregated patrimony — creditors of the partnership are paid out of partnership assets before reaching the general partner’s other assets — but it is not a separate legal person.

Who are the partners of a SCSp?

A SCSp has at least one associé commandité (general partner, unlimited liability) and at least one associé commanditaire (limited partner, liability capped at their contribution).

The general partner manages the partnership and assumes unlimited joint and several liability for partnership debts; the limited partners contribute capital and share in returns under the LP agreement’s distribution waterfall, with liability capped at their committed contribution. The general partner is typically a Luxembourg S.à r.l. or S.A. — the “GP entity” — which itself has limited liability, so the unlimited liability of the GP role is contained inside the GP entity.

Both general partners and limited partners may be natural persons or legal entities, resident or non-resident; the LP agreement is the source of truth for who contributes what, who decides what, and how returns flow. The 1915 Law as amended sets a small number of mandatory rules around partnership formation, register of partners, and partner liability; everything else is contractual.

How is a SCSp incorporated?

A SCSp is incorporated by a limited partnership agreement signed between the general partner(s) and the limited partner(s); the LP agreement is a private contract not filed at the RCS, and only a statutory excerpt (corporate name, registered office, GP identity, purpose, duration) is publicly registered.

There is no notarial deed requirement and no minimum capital threshold. The LP agreement may be in any language and may freely set: capital commitments and drawdown mechanics, GP carried interest and management fees, distribution waterfall (typically European or American style), transfer restrictions on LP interests, governance rights (LP advisory committee, key-person provisions), term and extension provisions, and default and removal mechanics.

The SCSp registers with the Registre de Commerce et des Sociétés (RCS) like any other Luxembourg commercial company, filing the statutory excerpt and the names of the general partner(s). Limited partner identities are NOT public — they appear only in the internal register of partners, which is maintained at the SCSp’s registered office and is accessible to the partners themselves (subject to LP agreement provisions on confidentiality).

How is a SCSp taxed?

The SCSp is tax-transparent — there is no entity-level corporate income tax, municipal business tax, or net wealth tax; income and gains flow through to partners and are taxed at the partner level.

The transparency principle is the practical reason the SCSp has displaced offshore LP structures for many fund managers. Cross-border investors are taxed only in their home jurisdiction (or in Luxembourg, if a Luxembourg-resident partner), without an additional layer of Luxembourg corporate tax on the fund itself.

The municipal business tax (MBT) regime contains a carve-out: an SCSp is subject to MBT only if it carries on a commercial activity. Pure fund-investment activities — holding participations, collecting dividends and interest, realising capital gains on investments — are not treated as commercial under standard Luxembourg case law, so a typical AIF-wrapping SCSp pays no MBT. An SCSp engaged in actively trading operating businesses, providing services for fees, or holding intellectual property under a royalty regime may fall into MBT scope; specialist tax advice is then required.

Regime-level subscription taxes may apply where the SCSp is wrapped in a regulated AIF regime: an SCSp inside a SIF is subject to the SIF’s annual subscription tax; an SCSp inside a SICAR is not; an SCSp inside a RAIF takes the RAIF’s elected tax treatment (either SIF-style subscription tax or SICAR-style risk-capital regime).

How does the SCSp fit into the AIFMD framework?

Where the SCSp pools capital from multiple investors with a defined investment policy, it is an alternative investment fund (AIF) under AIFMD, and its alternative investment fund manager (AIFM) must be authorised or registered with the CSSF (or another EU regulator under the EU passport).

This is a regulatory layer on top of the corporate form, not a property of the SCSp itself. An unregulated SCSp managed by a sub-threshold AIFM (assets under management below the AIFMD AUM thresholds, EUR 100 million leveraged / EUR 500 million unleveraged closed-ended) is registered with the CSSF only; an above-threshold AIFM requires full AIFMD authorisation.

The AIFMD layer brings depositary obligations, valuation rules, leverage reporting, transparency requirements to investors and regulators, and remuneration rules for the AIFM. The SCSp itself sits beneath all of that — it is the corporate vehicle holding the assets and contracting with the depositary, the prime broker, and the portfolio companies.

How does the SCSp compare to the SCS, the Soparfi S.A., and the SICAV?

	SCSp	SCS	S.A. (Soparfi)	SICAV
Governing law	Loi 12 juillet 2013 (1915 Title VII bis)	Loi 1915 (Title VII)	Loi 1915 (Title IV) + LIR 147/166	Loi 17 décembre 2010 (Part I/II)
Legal personality	None	Yes	Yes	Yes
Minimum capital	None	None (recommended ≥ EUR 1)	EUR 30,000 (25% paid)	EUR 1.25 million (UCITS) or per regime
Notarial deed	No	No	Yes	Yes
LP agreement public	No (excerpt only)	No (excerpt only)	n/a (articles of association public)	Articles public; prospectus public
Limited-partner identities public	No	No	n/a	n/a
Tax regime	Transparent	Transparent	Opaque (Soparfi can use participation exemption)	Per regime (taxe d’abonnement etc.)
Typical use	AIFs (PE, RE, debt, infra)	Hybrid commercial/fund	Holding companies, JVs, listed companies	UCITS retail funds

The SCS and SCSp are sister forms — the SCS for cases where legal personality is needed (employment contracts in the partnership’s name, real estate held in the partnership’s name, certain regulatory regimes), the SCSp for pure fund structures and pass-through vehicles. The choice between SCSp and a corporate Soparfi structure for a holding investment turns on tax transparency vs corporate opacity, governance flexibility vs Anglo-Saxon-style LP familiarity, and substance requirements at the GP entity level.

What this means for different readers

For a fund sponsor or general partner

The SCSp is the standard Luxembourg-law analogue of the Cayman ELP or Delaware LP. Use the SCSp for closed-ended PE, VC, RE, infrastructure, or debt funds. Pair it with a Luxembourg-licensed AIFM (or use the EU passport from another Member State’s AIFM), and a Luxembourg depositary. The LP agreement does almost all the substantive work — investment policy, distribution waterfall, GP economics, LP rights — with the 1915 Law providing a minimum framework. Substance must sit at the GP entity (the S.à r.l. or S.A. that acts as general partner) — not at the SCSp itself, which has no legal personality and cannot meaningfully have its own personnel.

For a limited partner or institutional investor

Investing into a Luxembourg SCSp means investing into a tax-transparent vehicle that flows income and gains to you at your home-jurisdiction tax treatment. You typically do not appear in the public RCS register — your identity is in the SCSp’s internal register of partners, accessible to other partners and to authorities on legal request but not searchable by the public. The GP entity and the AIFM are publicly visible; the LP agreement is not.

For a journalist, researcher, or due-diligence analyst

A SCSp publicly discloses: corporate name, registered office, general partner identity, corporate purpose, duration, and any subsequent corporate events (GP changes, dissolution). The LP agreement and the limited-partner identities are not public. Beneficial owners holding more than 25% of voting rights or shares (or the equivalent in LP commitments) must be filed at the Registre des Bénéficiaires Effectifs (RBE) per the Loi du 13 janvier 2019 — this is the principal public source for LP identity for SCSps where any single LP exceeds the 25% threshold.

Common confusions

• SCSp ≠ SCS. The SCSp has no legal personality; the SCS does. Otherwise the two are sister forms with very similar economics and governance.
• The SCSp is not itself regulated. AIFMD regulation attaches to the AIFM (the manager), not to the SCSp (the vehicle). An SCSp may be unregulated, registered with the CSSF as a sub-threshold AIF, or wrapped inside a regulated AIF regime (RAIF, SIF, SICAR).
• The SCSp is tax-transparent, not tax-exempt. Tax is paid by the partners at the partner level, not by the partnership. Cross-border investors should obtain transparency confirmation from their home-jurisdiction tax authority before investing.

Frequently asked questions

What is the difference between a SCSp and a SCS in Luxembourg? The Société en Commandite Spéciale (SCSp) and the Société en Commandite Simple (SCS) are both Luxembourg limited partnerships with one or more general partners (associés commandités, unlimited liability) and one or more limited partners (associés commanditaires, liability capped at their contribution). The key difference is that the SCSp has no legal personality — contracts are entered into in the name of the general partner — whereas the SCS has separate legal personality. Both are tax-transparent, both can have a partnership agreement that is private (not filed at the RCS), and both were modernised by the Law of 12 July 2013 transposing AIFMD to provide a Luxembourg analogue of the Anglo-Saxon limited partnership for alternative investment fund structuring.

Does a SCSp have legal personality? No. The SCSp does not have legal personality — that is the defining feature distinguishing it from the SCS, which does. In practice the general partner contracts in its own name on behalf of the partnership, and the partnership is not itself a party to those contracts. The SCSp has its own segregated patrimony separately from the patrimony of its partners; creditors of the SCSp are paid out of partnership assets before any claim on partner assets.

What is the typical use case for a Luxembourg SCSp? The SCSp is the default Luxembourg wrapper for alternative investment funds (AIFs) — private-equity funds, venture-capital funds, real-estate funds, infrastructure funds, debt funds, hedge funds. It replicates Anglo-Saxon limited partnership structures (Delaware LP, Cayman ELP, UK LP) under Luxembourg law, which is familiar to international fund investors and managers. The SCSp wraps regulated AIF regimes such as the RAIF, SIF, SICAR, or unregulated AIFs managed by AIFMD-authorised AIFMs.

Is a Luxembourg SCSp subject to corporate income tax? No. The SCSp is tax-transparent — there is no corporate income tax, no municipal business tax, and no net wealth tax at the partnership level. Income and gains flow through to the partners and are taxed at the partner level under each partner’s own tax regime. The SCSp may be subject to municipal business tax only if it carries on a commercial activity (which is not typically the case for fund structures), per the Luxembourg case law on partnership commerciality. The SCSp itself may still be subject to specific regime-level taxes if it is wrapped inside a SIF (annual subscription tax) or a SICAR (no subscription tax).

How is a Luxembourg SCSp incorporated? A SCSp is incorporated by a limited partnership agreement (LPA) signed between at least one general partner and at least one limited partner. The LPA is a private contract — it is NOT filed at the Registre de Commerce et des Sociétés (RCS); only a statutory excerpt (corporate name, registered office, identity of the general partner, corporate purpose, duration) is filed. There is no notarial deed requirement and no minimum capital. The LP agreement may be in any language and may freely set the partnership’s economic terms, governance, distribution waterfall, and transfer restrictions, subject to a small set of mandatory rules in the 1915 Law as amended by the Law of 12 July 2013.

Sources

• Law of 12 July 2013 transposing AIFMD and introducing the SCSp by amendment of the 1915 Law (Légilux n3) — legilux.public.lu/eli/etat/leg/loi/2013/07/12/n3/jo
• Law of 12 July 2013 on alternative investment fund managers (AIFM Law, Légilux n1) — legilux.public.lu/eli/etat/leg/loi/2013/07/12/n1/jo
• Law of 10 August 1915 on commercial companies (consolidated text), Légilux — legilux.public.lu/eli/etat/leg/loi/1915/08/10/n1/jo
• CMS Funds Group — Back to Basics, unregulated SCSp in Luxembourg — cms.law
• Arendt — Law of 12 July 2013 on alternative investment fund managers — arendt.com
• BSP — AIFM Law and CSSF FAQ updates — bsp.lu
• Loi du 13 janvier 2019 establishing the Registre des Bénéficiaires Effectifs (RBE), Légilux

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All rules verified against the Loi du 12 juillet 2013 (AIFM Law and amendments to the 1915 Law), the consolidated 1915 Law text, and current practitioner sources (CMS, Arendt, BSP) on Légilux as of 25 May 2026. Reviewed annually or sooner on regulatory change (e.g. AIFMD II transposition).

A Société Anonyme (S.A.) is a Luxembourg public limited company governed by Title IV of the Law of 10 August 1915 on commercial companies, with a minimum share capital of EUR 30,000 of which at least 25% must be paid up at incorporation, one or more shareholders, and shareholders’ liability capped at the amount of each contribution. With 23,007 active entities (85,731 including inactive), it is the standard form for listed and regulated entities, larger unlisted enterprises, joint ventures, and the typical legal wrapper for a Soparfi holding structure.

Governing law	Loi du 10 août 1915 (consolidated text, Title IV)
Minimum capital	EUR 30,000, with at least 25% paid up at incorporation (minimum EUR 7,500 deposited)
Shareholders	1 or more (no maximum)
Liability	Capped at each shareholder’s contribution
Notarial deed	Required for incorporation
Share form	Registered or bearer (bearer immobilised with depositary since 2014)
Management	Single-tier conseil d’administration (≥3 members, 1 if single shareholder) or dual-tier directoire + conseil de surveillance
Tax regime	Opaque — CIT + municipal business tax + net wealth tax

What is a S.A. under Luxembourg corporate law?

The S.A. is the second of the two principal capital companies under Luxembourg law, governed by Title IV of the 1915 Law, distinguished from the S.à r.l. by free transferability of shares, the option to issue bearer shares, and the option to list shares publicly.

Shareholders of a S.A. are called actionnaires. The form is intuitu pecuniae — the capital matters, not the identity of the holders — which is why shares circulate freely and shareholder identities are not publicly registered. The Law of 10 August 2016 reduced the minimum capital from EUR 31,000 to EUR 30,000 and introduced minority shareholder rights for holders of at least 10% of voting rights.

The S.A. is the legal-form choice for listed companies (Luxembourg Stock Exchange and other regulated markets), CSSF-supervised entities such as banks, insurance and reinsurance undertakings, management companies, investment firms, and SICAV-style investment companies (which are S.A. by legal form, governed by additional sectoral laws), and most joint ventures requiring capital-raising flexibility or shareholder confidentiality.

How much share capital does a S.A. need?

The minimum share capital is EUR 30,000, of which at least 25% (a minimum of EUR 7,500) must be paid up at incorporation; any in-kind contribution requires an independent valuation by a réviseur d’entreprises agréé before the notarial deed is signed (Art. 420-1 of the 1915 Law).

Capital is expressed in EUR or in any currency convertible into EUR at incorporation. The 25% paid-up rule applies per share, not in aggregate — every individual share must be paid up to at least one-quarter of its nominal value. Cash contributions for the remaining 75% may be called up by the board at any time; the founders are jointly and severally liable for that unpaid balance vis-à-vis third parties and the company.

Unlike a S.à r.l., an in-kind contribution to an S.A. requires an independent valuation report from a réviseur d’entreprises agréé describing the contribution and the valuation method, addressed to the notary before incorporation. The réviseur cost is one of the practical differences between forming an S.A. and forming a S.à r.l.

Who can be a shareholder, and how are shares transferred?

A S.A. has one or more shareholders of any nationality or residence, and shares are freely transferable unless the articles of association introduce restrictions; bearer shares may be issued but must be immobilised with a Luxembourg professional depositary since the Law of 28 July 2014.

The single-member S.A. (société anonyme unipersonnelle) was introduced by the Law of 25 August 2006 — before that reform, an S.A. required at least two shareholders. There is no statutory cap on the number of shareholders; this is the defining structural difference from the S.à r.l. (capped at 100).

Shareholder identities are not publicly filed at the Registre de Commerce et des Sociétés (RCS). Only the directors (or the members of the directoire and conseil de surveillance) appear on the public RCS extract. The share register itself is kept at the registered office. Bearer-share owners are recorded by name and address in a register held by a professional depositary; that register is confidential but accessible to Luxembourg supervisory authorities, the Cellule de Renseignement Financier (CRF), and the tax authorities.

Beneficial owners — typically natural persons ultimately holding more than 25% of shares or voting rights — must additionally be filed at the Registre des Bénéficiaires Effectifs (RBE) under the Law of 13 January 2019. The RBE has its own access regime.

Who manages a S.A., and what governance applies?

The S.A. may be managed by a single-tier conseil d’administration (at least three directors, or one administrateur unique if there is a single shareholder), or by a dual-tier directoire and conseil de surveillance (a structure available since the Law of 25 August 2006); a general meeting of shareholders is mandatory at least once per year.

In the single-tier system, the conseil d’administration handles management and represents the company; day-to-day management may be delegated to one or more administrateurs-délégués. In the dual-tier system, the directoire manages and the conseil de surveillance (at least three members) supervises without participating in management.

Annual general meeting convocations are filed at the RCS and published in the Recueil électronique des sociétés et associations (RESA) at least 15 days before the meeting, and notified to registered shareholders at least 8 days in advance. Changes to the articles of association and capital increases (Art. 420-22 of the 1915 Law) require an extraordinary general meeting with a 50% quorum and a two-thirds majority. Capital-impairment rules apply: where the company has lost half of its share capital, the directors must convene a general meeting within two months to decide on continuation (Art. 100 of the 1915 Law) — a rule that applies to the S.A., not to the S.à r.l.

When does a S.A. need an auditor?

A statutory audit by a réviseur d’entreprises agréé is required when the S.A. exceeds, in two consecutive financial years, two of three thresholds: balance sheet total EUR 7.5 million, net turnover EUR 15 million, and 50 average full-time employees; below those thresholds, every S.A. is currently required to appoint at least one commissaire aux comptes — a lighter oversight role subject to pending abolition under Bill 8286.

The audit thresholds were raised by the Grand-Ducal Regulation of 25 October 2024 implementing EU Directive 2023/2775. See Luxembourg audit thresholds for how the repetition criterion is calculated.

The commissaire aux comptes role distinguishes the S.A. from the S.à r.l.: every S.A. needs one (until Bill 8286 abolishes the role), regardless of size, where the S.à r.l. only needs one above 60 shareholders.

How is a S.A. taxed?

The S.A. is tax-opaque — taxed in its own name as a Luxembourg corporate taxpayer — and is subject to the same regime as the S.à r.l.: corporate income tax, municipal business tax, and net wealth tax.

The combined rate of corporate income tax and municipal business tax in Luxembourg-Ville is 23.87% (CIT 16% plus 7% solidarity surcharge plus 6.75% MBT, applicable since 1 January 2025). Net wealth tax is levied at 0.5% on net assets up to EUR 500 million (0.05% above), with a minimum charge starting at EUR 535. A S.A. holding qualifying participations may operate under the Soparfi regime to benefit from the participation exemption on dividends and capital gains — a tax-regime choice, not a different legal form.

How long does it take to incorporate, and what does it cost?

Practical total: four to ten weeks, dominated by the bank’s KYC procedure to open the share-capital deposit account and, where applicable, the réviseur d’entreprises agréé valuation of in-kind contributions; the notarial step itself takes a few days.

Typical out-of-pocket costs include notarial fees (commonly EUR 1,800–3,000, higher than for a S.à r.l. given the more elaborate documentation), RCS publication and filing fees, and an autorisation d’établissement where the activity requires one. Where capital is contributed in kind, the réviseur d’entreprises agréé fee is the dominant additional cost — typically several thousand euros depending on the complexity of the valuation. The 25% paid-up rule means a minimum cash deposit of EUR 7,500 at incorporation, smaller than the EUR 12,000 required for a S.à r.l.

How does a S.A. file annual accounts?

Annual accounts are filed at the RCS via eCDF and LBR, with approval by the annual general meeting within 6 months of FY-end and filing within 1 month of approval.

S.A. below the small-undertaking thresholds may file in abridged format. Companies that exceed the réviseur thresholds file the full annual accounts together with the audit report and the management report.

How does the S.A. compare to the S.à r.l., SAS, and SCA?

	S.A.	S.à r.l.	SAS	SCA
Governing law	Loi 1915 (Title IV)	Loi 1915 (Title VII)	Loi 1915 (Title V, since 2016)	Loi 1915 (Title VI)
Minimum capital	EUR 30,000	EUR 12,000	EUR 30,000	EUR 30,000
Paid up at incorporation	25%	100%	25%	25%
Shareholders	1+ (no cap)	1–100	1+ (no cap)	1+ (no cap)
Notarial deed required	Yes	Yes	Yes	Yes
Share form	Registered or bearer (depositary)	Registered only	Registered or bearer (depositary)	Registered or bearer (depositary)
Mandatory AGM	Every year	If >60 partners	Determined by articles	Every year
Board of directors	Required (3, or 1 if sole shareholder)	Not required	Determined by articles (président mandatory)	Managed by general partner(s)
Shareholder identities public	No (only directors)	Yes (RCS)	No	Limited partners not public; general partners are
Can list shares publicly	Yes	No	No	Yes
Typical use	Listed, regulated, large unlisted, JVs, Soparfi	SMEs, holdings, family businesses, professional firms	Closely-held with high contractual flexibility	Family enterprises with active GP and passive LPs

The S.A. is the right form when shareholder anonymity, bearer-share flexibility, regulated-activity status, or listing capability matters. The S.à r.l. suits closely-held businesses willing to accept the public-shareholder register and 100-partner cap. The SAS, introduced by the 2016 modernisation, sits between the two: SA-like capital and share-transfer rules with SARL-like contractual flexibility on internal governance. The SCA is an SA variant with general partners (commandités) and limited partners (commanditaires) — most often used for family-controlled vehicles where the GP wants entrenched management without exposure to LP rotation.

What this means for different readers

For a founder choosing between forms

Pick the S.A. if you need to list shares publicly, plan to operate a CSSF-supervised activity, want bearer-share flexibility, or expect a wide and rotating shareholder base. Pick the S.à r.l. for a closely-held business where the lower capital threshold and the simpler governance matter, and where public shareholder disclosure is acceptable.

For an investor, counterparty, or lender

The S.A. you are dealing with discloses only its directors at the RCS; the shareholder register is held at the registered office and not public. Beneficial owners of more than 25% are filed at the RBE, accessible to professional subjects of the AML Law. Audited accounts are filed annually only where the réviseur thresholds are met; otherwise the company files abridged accounts reviewed by a commissaire aux comptes — a meaningful difference for credit-analysis depth.

For a journalist, researcher, or due-diligence analyst

Expect to find the directors, registered office, and articles of association publicly at the RCS. Shareholder identities are not in the public RCS extract — they require an RBE request (where the 25% threshold applies) or another lawful basis. Material events (board changes, capital changes, mergers, dissolutions) are published in the Recueil électronique des sociétés et associations (RESA) via the LBR portal. Audited accounts include the auditor’s name; the audit firm itself is searchable at the auditor aggregator.

Common confusions

• The S.A. is not the same as the SAS. The société par actions simplifiée, introduced by the 2016 modernisation as a separate legal form, references the SA regime by default but allows much greater contractual freedom on internal governance. The SAS is found in Title V of the 1915 Law; the S.A. in Title IV.
• Bearer shares are not anonymous. Since the Law of 28 July 2014, bearer shares of a S.A. must be immobilised with a Luxembourg professional depositary, who records the name and address of each holder. The depositary’s register is not filed at the RCS, but it is accessible to supervisory and tax authorities on a legal basis.
• Soparfi is not a legal form. It is a tax regime that any S.A. or S.à r.l. holding qualifying participations can elect into, to benefit from the participation exemption on dividends and capital gains.

Frequently asked questions

What is the difference between a Luxembourg S.A. and a S.à r.l.? The S.A. requires a minimum share capital of EUR 30,000 with 25% paid up at incorporation versus EUR 12,000 fully paid for the S.à r.l., has no shareholder maximum versus a cap of 100 for the S.à r.l., allows bearer shares (immobilised with a professional depositary since the Law of 28 July 2014) where the S.à r.l. is registered-only, requires an annual general meeting where the S.à r.l. requires one only above 60 shareholders, and keeps shareholder identities off the public RCS register (only the directors are listed) where the S.à r.l. files all shareholders publicly. The S.A. is the standard form for listed, regulated, and large unlisted enterprises.

Does a Luxembourg S.A. need an auditor? A statutory audit by a réviseur d’entreprises agréé is required where the company exceeds, in two consecutive financial years, two of three thresholds: balance sheet total EUR 7.5 million, net turnover EUR 15 million, and 50 average full-time employees (Grand-Ducal Regulation of 25 October 2024). Below those thresholds, every S.A. is currently required to appoint at least one commissaire aux comptes — a lighter oversight role. Bill of Law 8286, pending in the Chamber of Deputies, would abolish the commissaire requirement.

How are shareholders of a Luxembourg S.A. identified and disclosed? Shareholder identities are not publicly listed at the RCS — only the directors (or members of the directoire and conseil de surveillance) are filed publicly. The share register is held at the registered office. Bearer shareholders are recorded by name and address in a depositary’s register held by a Luxembourg professional depositary, immobilised since the Law of 28 July 2014, and that register is not public. Beneficial owners holding more than 25% of voting rights or shares must be filed at the Registre des Bénéficiaires Effectifs (RBE) per the Law of 13 January 2019.

Can a Luxembourg S.A. be incorporated by a single shareholder? Yes, since the Law of 25 August 2006 introduced the single-member S.A. (société anonyme unipersonnelle). One shareholder is sufficient at incorporation and throughout the life of the company. In that case the board of directors may be reduced to a single member (administrateur unique), instead of the usual minimum of three. The shareholder may be a natural person or a legal entity, resident or non-resident.

Can a Luxembourg S.A. issue bearer shares? Yes. The S.A. may issue registered or bearer shares, or a mix. Since the Law of 28 July 2014, bearer shares must be immobilised with a Luxembourg professional depositary, who maintains a register of bearer-share owners. The depositary’s register is confidential — it is not filed at the RCS — but Luxembourg supervisory authorities, the Cellule de Renseignement Financier, and tax authorities may access it on a legal basis. Bearer shares of an S.A. may only become freely circulating once the share capital is fully paid up.

Sources

• Law of 10 August 1915 on commercial companies (consolidated text, Title IV — Sociétés Anonymes), Légilux — legilux.public.lu/eli/etat/leg/loi/1915/08/10/n1/jo
• Law of 10 August 2016 modernising the 1915 Law (reduced SA minimum capital to EUR 30,000; introduced minority-shareholder action), Légilux — legilux.public.lu/eli/etat/leg/loi/2016/08/10/n3/jo
• Law of 25 August 2006 introducing the single-member S.A. and the dual-tier governance (directoire + conseil de surveillance), Légilux
• Law of 28 July 2014 on the immobilisation of bearer shares and units, Légilux
• Law of 13 January 2019 establishing the Register of Beneficial Owners (RBE), Légilux
• Grand-Ducal Regulation of 25 October 2024 updating accounting size criteria (transposing EU Directive 2023/2775), Légilux
• Bill of Law 8286 (pending) — modernisation of the accounting law (abolition of commissaire aux comptes), Chamber of Deputies
• Guichet.public.lu — Société Anonyme guide — guichet.public.lu
• Registre de Commerce et des Sociétés (LBR) — www.lbr.lu — authoritative source for Luxembourg active and inactive entity counts by legal form

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All article numbers, thresholds, and rules verified against the consolidated 1915 Law text, the Grand-Ducal Regulation of 25 October 2024, and Guichet.public.lu on Légilux as of 13 May 2026. Reviewed annually or sooner on regulatory change.

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A Société à responsabilité limitée (S.à r.l.) is a Luxembourg private limited liability company governed by the Law of 10 August 1915 on commercial companies, with a minimum share capital of EUR 12,000 fully paid up at incorporation, between 1 and 100 shareholders, and shareholders’ liability capped at their contribution. With 73,575 active entities (151,906 including inactive), it is the most common legal form in Luxembourg, used by the majority of small and medium-sized businesses, family enterprises, holding vehicles, and professional service firms.

Governing law	Loi du 10 août 1915 (consolidated text, Title VII)
Minimum capital	EUR 12,000, fully subscribed and fully paid up at incorporation
Shareholders	1 to 100 (associés)
Liability	Capped at each shareholder’s contribution
Notarial deed	Required for incorporation
Share form	Registered only (no bearer shares)
Management	One or more gérants; no board of directors required
Tax regime	Opaque — CIT + municipal business tax + net wealth tax

What is a S.à r.l. under Luxembourg corporate law?

A S.à r.l. is one of the two principal capital companies under Luxembourg law, governed by Title VII of the 1915 Law, distinguished from the S.A. by its closer governance and its intuitu personae character.

The other principal capital company is the Société Anonyme (S.A.). Shareholders of a S.à r.l. are called associés. The Law of 10 August 2016 modernised the regime, broadening flexibility on share classes, written resolutions, and share-rights design. The form is by nature intuitu personae — the identity of partners matters — which is why share transfers to third parties face restrictions absent from the S.A.

Certain activities cannot be conducted in S.à r.l. form. Insurance and savings undertakings, regulated investment vehicles such as SICAV and SICAR, and credit institutions (banking) are reserved by separate laws to other forms. Holding investments via the Soparfi tax regime, or acting as an Alternative Investment Fund Manager, remains fully compatible with the S.à r.l. form.

How much share capital does a S.à r.l. need?

The minimum share capital is EUR 12,000, fully subscribed and fully paid up at incorporation (Art. 710-5 of the 1915 Law).

Capital can be denominated in EUR or in any currency with a measurable EUR-equivalent at incorporation. Contributions in kind are valued in the notarial incorporation deed; unlike an S.A., they do not require an independent auditor’s valuation report.

Bill of Law 8669, adopted by the Luxembourg Parliament on 28 April 2026, allows the EUR 12,000 to be subscribed at incorporation but paid up to twelve months later, while preserving founder liability for unpaid amounts. The law takes effect on publication in the Mémorial; until then, the immediate-payment rule applies.

Who can be a shareholder, and how are shares transferred?

A S.à r.l. has between 1 and 100 shareholders, of any nationality or residence; transfers to third parties require the prior approval of associés representing at least three-quarters of the share capital (Art. 710-12 of the 1915 Law).

Shareholders may be natural persons or legal entities, resident or non-resident — Luxembourg corporate law imposes no nationality or residency condition. A single-shareholder S.à r.l. is common for holding vehicles. Above 100 shareholders, the company must convert to an S.A. or another suitable form within one year.

Each associé‘s identity, address, and shareholding are filed at the Registre de Commerce et des Sociétés (RCS) and are publicly searchable. The S.à r.l. issues only registered shares; bearer shares are not permitted. The three-quarters threshold for third-party transfers can be lowered to one-half by the articles. Transfers between existing shareholders and to a deceased shareholder’s close family are exempt from the approval requirement unless the articles say otherwise.

Who manages a S.à r.l., and what governance applies?

The S.à r.l. is run by one or more gérants (managers); no board of directors is required, and a formal general meeting of shareholders is mandatory only where the company has more than 60 associés.

Managers may be shareholders or external persons, natural persons or legal entities, and may be of any nationality and residence. The articles of association set their powers.

The 60-shareholder threshold for a mandatory annual general meeting (assemblée des associés) sits in Art. 710-15 of the 1915 Law; it was raised from 25 to 60 by the Law of 10 August 2016. For smaller companies — the vast majority — collective shareholder decisions can be taken by written resolutions.

When does a S.à r.l. need an auditor?

A statutory audit by a réviseur d’entreprises agréé is required when the company exceeds, in two consecutive financial years, two of three thresholds: balance sheet total EUR 7.5 million, net turnover EUR 15 million, and 50 average full-time employees.

These thresholds were raised by the Grand-Ducal Regulation of 25 October 2024 implementing EU Directive 2023/2775, and apply to financial years starting on or after 1 January 2023. See Luxembourg audit thresholds for how the two-of-three test interacts with the consecutive-year repetition rule.

Separately, a commissaire aux comptes — a lighter oversight role — is required where the S.à r.l. has more than 60 associés. This role is subject to pending abolition by Bill of Law 8286.

How is a S.à r.l. taxed?

The S.à r.l. is tax-opaque — taxed in its own name as a Luxembourg corporate taxpayer — subject to corporate income tax, the municipal business tax, and net wealth tax.

The combined effective rate of corporate income tax and municipal business tax in Luxembourg-Ville is 23.87% from 1 January 2025 (CIT 16% plus a 7% solidarity surcharge plus MBT 6.75%). Net wealth tax runs 0.5% on net assets up to EUR 500 million (0.05% above), with a progressive minimum of EUR 535 / 1,605 / 4,815 since FY 2025.

A S.à r.l. can elect to operate under the Soparfi regime to benefit from the participation exemption on dividends and capital gains from qualifying shareholdings — a tax-regime choice layered on top of the legal form.

How long does it take to incorporate, and what does it cost?

Practical total: four to eight weeks, dominated by the bank’s KYC procedure to open the share-capital deposit account; the notarial incorporation itself takes a few days.

A S.à r.l. is incorporated by notarial deed. Once documentation is in order, the deed is signed and RCS registration is completed within a few days. The bank-account bottleneck is the largest practical variable. Typical costs include notarial fees (commonly EUR 1,500–2,500), RCS publication and filing fees, and an autorisation d’établissement (business permit, required for commercial activities). Translation, domiciliation, and advisory fees vary by structure.

How does a S.à r.l. file annual accounts?

Annual accounts are approved by the associés within six months of FY-end and filed at the RCS within one month of approval, via eCDF and the LBR portal.

Entities below the small-undertaking thresholds may file in abridged format.

How does the S.à r.l. compare to the S.A. and the Sàrl-S?

	S.à r.l.	S.A.	Sàrl-S
Governing law	Loi 1915 (Title VII)	Loi 1915 (Title IV)	Loi 23 juillet 2016
Minimum capital	EUR 12,000	EUR 30,000	EUR 1
Maximum capital	None	None	EUR 11,999
Paid up at incorporation	100% (deferral pending Bill 8669)	25%	100%
Shareholders	1–100	1+ (no cap)	1–100 (natural persons only)
Notarial deed required	Yes	Yes	No (private deed)
Share form	Registered only	Registered or bearer (depositary)	Registered only
Mandatory AGM	If >60 partners	Every year	If >60 partners
Board of directors	Not required	Required	Not required
Shareholder identities public	Yes (RCS)	No (directors only)	Yes (RCS)
Can list shares publicly	No	Yes	No
Typical use	SMEs, holdings, family businesses, professional firms	Listed companies, regulated entities, joint ventures	Solo entrepreneurs, micro-businesses

The S.à r.l. is generally the right choice for closely-held businesses needing limited-liability protection without listing aspirations. The S.A. fits when bearer shares, listing capability, or higher governance formality matter. The Sàrl-S is a reduced-capital onramp for individual entrepreneurs and converts into a standard S.à r.l. once capital crosses EUR 12,000.

What this means for different readers

For a founder choosing between forms

If your project is closely held, does not need to raise capital from many shareholders, and does not aim at a public listing, the S.à r.l. is the standard choice. Use the S.A. if you need bearer-share flexibility, plan to list, or operate a regulated financial-sector activity. Use the Sàrl-S only if you cannot mobilise EUR 12,000 at incorporation and are a natural person.

For a cross-border worker, employee, or supplier

A S.à r.l. employer is a privately-held company with limited-liability protection at the company level. Standard Luxembourg labour, social-security, and commercial-payment rules apply. Shareholder identities are publicly searchable at the Registre de Commerce et des Sociétés — useful for verifying who controls the company you are dealing with.

For a journalist, researcher, or due-diligence analyst

Expect to find each associé‘s identity, address, and shareholding publicly filed at the RCS. Annual accounts are filed within seven months of FY-end (six-month approval window plus one month to file); small undertakings may file abridged versions. Material events (manager changes, capital changes, transfers) are published in RESA via the LBR portal.

Common confusions

• Soparfi is not a legal form. It is a tax regime that any S.à r.l. or S.A. holding qualifying participations can elect into, to benefit from the participation exemption on dividends and capital gains.
• The Sàrl-S and the S.à r.l. are distinct forms. The Sàrl-S, introduced by the Law of 23 July 2016, is governed by its own provisions and is open only to natural persons, with capital between EUR 1 and EUR 11,999.

Frequently asked questions

What is the difference between a S.à r.l. and a S.A. in Luxembourg? A S.à r.l. has lower minimum capital (EUR 12,000 vs EUR 30,000 for an S.A.), a cap of 100 shareholders (no cap for an S.A.), registered shares only (no bearer shares), and lighter governance — no board of directors required and shareholder identities are public at the Registre de Commerce et des Sociétés. An S.A. allows wider ownership, can list shares publicly, and is the standard form for larger enterprises, regulated entities, and joint ventures.

Does a Luxembourg S.à r.l. need an auditor? Not automatically. A statutory audit by a réviseur d’entreprises agréé is required if the company exceeds, in two consecutive financial years, two of three thresholds: balance sheet total EUR 7.5 million, net turnover EUR 15 million, and 50 full-time employees (Grand-Ducal Regulation of 25 October 2024). The commissaire aux comptes — a lighter oversight role — is required where the S.à r.l. has more than 60 associés, and is subject to pending abolition under Bill 8286.

How long does it take to incorporate a S.à r.l. in Luxembourg? The notarial step takes a few days once documentation is ready. In practice the total runs four to eight weeks, dominated by the KYC procedure to open the share-capital deposit account at a Luxembourg bank. Bill 8669, adopted by the Luxembourg Parliament on 28 April 2026, allows capital to be paid up to twelve months after incorporation once it takes effect on publication in the Mémorial.

Can a non-resident own or manage a Luxembourg S.à r.l.? Yes. Luxembourg corporate law imposes no nationality or residency condition on shareholders or gérants; both can be natural persons or legal entities, resident or non-resident. The company must, however, maintain its registered office in Luxembourg and conduct its effective management from Luxembourg to be treated as a Luxembourg tax resident.

Can a S.à r.l. issue different classes of shares? Yes. Since the modernisation introduced by the Law of 10 August 2016, the S.à r.l. can issue multiple classes of shares with different economic and voting rights, subject to the articles of association (Art. 710-9 et seq. of the 1915 Law). Bearer shares remain prohibited — shares are always registered.

Sources

• Law of 10 August 1915 on commercial companies (consolidated text), Légilux — legilux.public.lu/eli/etat/leg/loi/1915/08/10/n1/jo
• Law of 10 August 2016 modernising the 1915 Law, Légilux — legilux.public.lu/eli/etat/leg/loi/2016/08/10/n3/jo
• Law of 23 July 2016 establishing the Sàrl-S, Légilux
• Grand-Ducal Regulation of 25 October 2024 updating accounting size criteria (implementing EU Directive 2023/2775), Légilux
• Bill of Law 8286 (pending) — modernisation of the accounting law and abolition of the commissaire aux comptes, Chamber of Deputies
• Bill of Law 8669 (adopted on first constitutional vote 28 April 2026) — deferred payment of SARL minimum share capital, Chamber of Deputies; CMS legal update 28 April 2026
• PwC Luxembourg Tax Summaries — combined CIT + MBT rate of 23.87% (CIT 16% + 7% solidarity surcharge + MBT 6.75% in Luxembourg-Ville) applicable from 1 January 2025
• Guichet.public.lu — SARL guide for entrepreneurs
• Registre de Commerce et des Sociétés (LBR) — www.lbr.lu — authoritative source for Luxembourg active and inactive entity counts by legal form

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All article numbers, thresholds, and rules verified against the consolidated 1915 Law text, the Grand-Ducal Regulation of 25 October 2024, and current practitioner sources (CMS, NautaDutilh, PwC, Norton Rose) on Légilux as of 13 May 2026. Reviewed annually or sooner on regulatory change.

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A Soparfi is a fully taxable Luxembourg commercial company — typically a Société Anonyme or Société à Responsabilité Limitée — that benefits from the participation exemption regime under Article 166 of the Luxembourg Income Tax Law (LIR), under which qualifying dividends and capital gains from substantial shareholdings are exempt from corporate income tax. The acronym stands for Société de Participations Financières. Combined with access to Luxembourg’s network of 88 double tax treaties, the Soparfi is the principal Luxembourg vehicle for cross-border holding structures, used by private-equity sponsors, family offices, multinational groups, and real-estate platforms.

Type of regime	Tax regime (not a legal form) under Art. 166 LIR
Host legal forms	S.A., S.à r.l., SCA, SAS, or SE
Tax benefit (dividends)	100% CIT exemption (Art. 166 LIR) on qualifying participations
Tax benefit (capital gains)	100% CIT exemption (Grand-Ducal Reg. 21 Dec 2001) on qualifying participations
Qualifying shareholding	≥10% of capital, or acquisition cost ≥ EUR 1.2M (dividends) / EUR 6M (capital gains)
Holding period	≥12 consecutive months (or commitment to hold)
Outbound dividend WHT	Exempt on distributions to qualifying parent companies (Art. 147 LIR)
Treaty / EU directive access	Yes — 88 double tax treaties; EU Parent-Subsidiary Directive applies

What is a Soparfi under Luxembourg tax law?

A Soparfi is not a separate legal form; it is the label given to a fully taxable Luxembourg commercial company whose income from substantial shareholdings benefits from the participation exemption under Article 166 LIR.

The Soparfi sits in the same Luxembourg corporate tax regime as any other commercial company — it is subject to corporate income tax (CIT), municipal business tax, and net wealth tax — but its income from qualifying shareholdings is exempt under the participation exemption rules. The combination of participation exemption, the Luxembourg double-tax-treaty network, and access to EU directives is what makes the Soparfi the principal Luxembourg vehicle for international holding structures. The regime was consolidated in its modern form by the Grand-Ducal Regulation of 21 December 2001 implementing Article 166(9) LIR for capital gains.

Which legal forms can be a Soparfi?

Any fully taxable Luxembourg commercial company can operate as a Soparfi: most commonly the Société Anonyme (S.A.) or the Société à Responsabilité Limitée (S.à r.l.), but also the SCA, the SAS, or the SE.

The choice of host form follows the usual commercial criteria — capital threshold, shareholder confidentiality, listing capability, governance preferences — not the tax regime itself. An S.A. host suits Soparfi structures requiring shareholder confidentiality or listing capability; an S.à r.l. host suits closely-held cross-border holdings where the lower capital requirement matters. The SCA host is a less common choice favoured by family groups wanting an entrenched general partner. The Soparfi label attaches to the company once the substantive participation-exemption conditions are met; there is no separate Soparfi registration.

How does the participation exemption work for dividends?

Inbound dividends from a qualifying subsidiary are fully exempt from Luxembourg corporate income tax if the Soparfi holds at least 10% of the subsidiary’s capital (or an acquisition cost of at least EUR 1.2 million), holds for at least 12 continuous months (or commits to do so), and the subsidiary is fully taxable in Luxembourg, fully liable to a comparable tax abroad, or covered by Article 2 of the EU Parent-Subsidiary Directive (Art. 166 LIR).

The three conditions must be met simultaneously. Comparable taxation abroad is generally read as a nominal rate of at least 8% (since FY2025; previously 8.5%, per PwC Tax Summaries 2026) on the subsidiary’s income. Where the conditions are not met, a partial 50% exemption may still apply for dividends from qualifying Luxembourg subsidiaries. If the 12-month holding period is not ultimately completed, the exemption is retroactively cancelled and a corrective tax assessment is issued.

Expenses directly related to exempt income — interest on acquisition loans, valuation costs, audit fees relating to the participation — are generally not deductible to the extent they relate to the exempt income. This is documented annually in Form 506A filed alongside the main tax return (Form 500).

How does the participation exemption work for capital gains?

Capital gains on the disposal of qualifying participations are fully exempt from Luxembourg corporate income tax under the Grand-Ducal Regulation of 21 December 2001 implementing Article 166(9) LIR, under the same holding-period and subsidiary-qualification tests as for dividends, but with a higher acquisition-cost alternative threshold of EUR 6 million (versus EUR 1.2 million for dividends).

The 10% capital threshold remains the same for both dividends and capital gains; the alternative acquisition-cost route differs (EUR 1.2M for dividends, EUR 6M for capital gains). The exemption covers sale, exchange, liquidation, and other disposal events. Where the gain reverses prior tax benefits — for example, prior write-downs that were deductible — recapture rules apply and reduce the exempt amount accordingly.

What withholding tax applies to dividends paid by a Soparfi?

Dividends paid by a Soparfi to a qualifying parent company are exempt from Luxembourg withholding tax under Article 147 LIR, subject to the parent meeting the same 10% / EUR 1.2 million / 12-month holding tests applied at the recipient level.

Where the qualifying parent test is not met, a 15% domestic withholding tax applies by default, reduced or eliminated through Luxembourg’s double tax treaty network where the recipient resides in a treaty jurisdiction, or through the Parent-Subsidiary Directive for EU-resident parents. Interest and royalty payments by a Soparfi are generally not subject to Luxembourg withholding tax.

What substance and anti-abuse rules apply to a Soparfi?

A Soparfi must have genuine substance in Luxembourg — Luxembourg-resident directors, board meetings held in Luxembourg, accounts and records maintained in Luxembourg, real decision-making locally — and the participation exemption is denied under the general anti-abuse rule (GAAR) and ATAD-derived substance tests where artificial arrangements lack economic justification.

Multiple anti-abuse frameworks apply in parallel. The Luxembourg GAAR (under Article 6 of the Tax Adaptation Law) denies benefits to arrangements whose principal purpose is tax avoidance and which lack commercial substance. ATAD I introduced the interest limitation rule and the controlled foreign company (CFC) rule. ATAD II addresses hybrid mismatch arrangements. DAC6 (Directive 2018/822), in force since 1 July 2020, requires mandatory disclosure of cross-border tax arrangements bearing specified hallmarks. ATAD III (the UNSHELL proposal, COM(2021) 565, still in negotiation as of 2026) is a separate proposed instrument targeting shell-company structures with minimal substance — distinct from DAC6, which is a disclosure regime, not a substance test. Treaty access additionally requires substance per Multilateral Instrument (MLI) principal-purpose tests.

For Soparfi structures held by groups above the EUR 750 million Pillar Two threshold, the Luxembourg law of 22 December 2023 transposing Directive (EU) 2022/2523 applies from 1 January 2024; effective taxation at 15% is tested at the consolidated group level.

How is a Soparfi taxed on non-qualifying income?

Non-qualifying income — interest income (other than from qualifying loans), royalties, service income, and dividends or capital gains not meeting Article 166 LIR conditions — is taxed at the standard Luxembourg corporate rate of 23.87% (corporate income tax plus municipal business tax, Luxembourg-Ville rate).

A minimum CIT applies even where qualifying income covers most of the taxable base. Net wealth tax is levied at 0.5% on net assets up to EUR 500 million and 0.05% above, subject to a minimum charge. The Soparfi files annual accounts at the Registre de Commerce et des Sociétés and may be subject to a statutory audit by a réviseur d’entreprises agréé where the host legal form’s audit thresholds are met.

How does the Soparfi compare to the SPF and to regulated fund vehicles?

	Soparfi	SPF	RAIF	SIF
Legal basis	Art. 166 LIR + 1915 Law (host)	Law of 11 May 2007	Law of 23 July 2016	Law of 13 February 2007
Type	Tax regime label	Specific legal vehicle	Specific legal vehicle (fund)	Specific legal vehicle (fund)
Host legal forms	SA, SARL, SCA, SAS, SE	SA, SARL, SCA, SCoSA	SA, SARL, SCA, SCS, SCSp, others	SA, SARL, SCA, SCS, SCSp, others
Purpose	Commercial holding	Passive family wealth management	Alternative investment fund	Specialised investment fund
Tax on income	CIT + MBT + NWT; participation exemption on qualifying income	Exempt from CIT and NWT; subscription tax 0.25%	Exempt; subscription tax 0.01%	Exempt; subscription tax 0.01%
Treaty access	Yes (88 treaties)	No	Limited (depending on structure)	Limited (depending on structure)
Regulated by CSSF	No	No	No (managed by an authorised AIFM)	Yes
Eligible investors	Any	Individuals and family-only structures	Well-informed investors	Well-informed investors
Real-estate ownership	Permitted directly	Through subsidiary only	Permitted	Permitted
Typical use	Cross-border holding, PE, multinationals	Passive family wealth	Alternative investments	Institutional alternative investments

The Soparfi is the right choice for active cross-border commercial holding structures where treaty access matters. The SPF suits passive family wealth management where individuals or family-only structures hold financial assets without commercial purpose. The RAIF and SIF are fund vehicles for collective investment by well-informed investors — each serves different regulatory and tax positioning, and each may be hosted by various legal forms.

What this means for different readers

For a founder structuring a holding company

If your purpose is to hold and manage shareholdings in commercial subsidiaries, distribute dividends across borders, and exit investments efficiently, the Soparfi is the standard Luxembourg vehicle. The host legal form is a separate choice — S.à r.l. for closely-held structures, S.A. for listed or regulated activities or where shareholder confidentiality matters. Substance and documentation must be set up from day one; the Soparfi regime does not survive a substance challenge.

For an investor evaluating a Soparfi-held subsidiary

The Soparfi parent is a fully taxable Luxembourg company; it files audited or commissaire-reviewed accounts at the RCS where applicable and is subject to ATAD substance rules. Participation-exemption treatment is a Luxembourg domestic regime; it does not reduce taxation at the subsidiary level (where the subsidiary is taxed under its own jurisdiction’s rules). The Soparfi’s beneficial owners, where they hold more than 25% of capital or voting rights, are filed at the Registre des Bénéficiaires Effectifs (RBE).

For a tax advisor or corporate lawyer

The Soparfi regime is documented annually in Form 506A alongside the main corporate tax return (Form 500). The key technical points: the 10% / EUR 1.2M (dividends) / EUR 6M (capital gains) threshold, the 12-month holding period, the qualifying-subsidiary test (Luxembourg fully taxable, comparable taxation abroad, or EU Parent-Subsidiary Directive coverage), the disallowance of related expenses to the extent they relate to exempt income (Art. 166(5) LIR), and the recapture rules where prior write-downs are reversed by a later gain. Pillar Two applies at group level for groups above EUR 750 million.

Common confusions

• Soparfi is not a legal form. It is a tax-regime label that attaches to a fully taxable Luxembourg commercial company once the participation-exemption conditions are met. The legal form remains an S.A., S.à r.l., SCA, or SAS — the Soparfi label sits on top.
• The participation exemption is not a blanket tax exemption. Non-qualifying income (interest from third parties, royalties, services, dividends from non-qualifying subsidiaries) is fully taxable at the standard ~23.87% rate. Expenses directly related to exempt income are generally not deductible.
• The 10% threshold has two acquisition-cost alternatives. EUR 1.2 million applies to dividends; EUR 6 million applies to capital gains. The thresholds are not interchangeable.

Frequently asked questions

What is the difference between a Soparfi and a SPF in Luxembourg? A Soparfi is a fully taxable Luxembourg commercial company (typically an S.A. or S.à r.l.) that benefits from the participation exemption under Art. 166 LIR for qualifying dividends and capital gains, and has full access to Luxembourg’s double tax treaty network and to EU directives. A SPF (Société de gestion de Patrimoine Familial) is a private wealth-management vehicle reserved for individuals and family structures, governed by the Law of 11 May 2007. The SPF is exempt from corporate income tax and net wealth tax but pays a 0.25% subscription tax, has restricted activities, may not hold real estate directly, and does not benefit from Luxembourg’s tax treaties or EU directives. The Soparfi suits cross-border commercial holding structures; the SPF suits passive family wealth management.

What are the qualifying conditions for the Soparfi participation exemption? Three conditions must be met simultaneously. First, a minimum shareholding test: at least 10% of the subsidiary’s capital, or an acquisition cost of at least EUR 1.2 million for dividends and EUR 6 million for capital gains. Second, a 12-month holding period: the Soparfi must hold, or commit to hold, the participation for at least 12 continuous months. Third, a subsidiary-qualification test: the subsidiary must be a fully taxable Luxembourg resident company, a non-resident company subject to a tax similar to Luxembourg corporate income tax (nominal rate of at least 8% since FY2025 (previously 8.5%; per PwC Tax Summaries 2026)), or a company covered by Article 2 of the EU Parent-Subsidiary Directive. All three conditions trace to Article 166 LIR.

Can a Soparfi access Luxembourg’s double tax treaties? Yes. Because the Soparfi is a fully taxable Luxembourg resident company, it has full access to Luxembourg’s network of 88 double tax treaties (as of 2026; KPMG Tax Alert 2025-08) and to EU directives including the Parent-Subsidiary Directive and the Interest and Royalties Directive. This is one of the structural differences between the Soparfi and the SPF: the SPF, despite being a Luxembourg resident, does not benefit from tax treaties because its tax-exempt status does not meet treaty residency tests.

Does a Soparfi need substance in Luxembourg? Yes. Substance is required both under Luxembourg domestic anti-abuse rules and under EU substance tests imposed by ATAD I, ATAD II, and DAC6 (Directive 2018/822, in force since 1 July 2020 — mandatory disclosure of cross-border arrangements) and, separately, the proposed ATAD III / UNSHELL directive (COM(2021) 565, still in negotiation). Practical substance markers include directors resident in Luxembourg, board meetings held in Luxembourg, accounts and records maintained in Luxembourg, the registered office being a real address (not pure post-box domiciliation for higher-risk structures), and decision-making genuinely taking place in Luxembourg. Treaty benefits and participation exemption may be denied where substance is insufficient and the GAAR applies.

Is the Soparfi affected by Pillar Two / the global minimum tax? Pillar Two applies to multinational groups with consolidated revenues above EUR 750 million; below that threshold a Soparfi is unaffected. For in-scope groups, the Luxembourg Pillar Two law transposing Directive (EU) 2022/2523 applies from 1 January 2024 (Loi du 22 décembre 2023). Effective taxation on Soparfi income at group level may be tested at 15% via the Income Inclusion Rule and Undertaxed Payments Rule. The participation exemption under Article 166 LIR remains operative as a Luxembourg domestic rule; Pillar Two operates at the consolidated group level on top of it. Below the EUR 750 million threshold, the Soparfi regime continues to operate as previously.

Sources

• Loi modifiée du 4 décembre 1967 concernant l’impôt sur le revenu (LIR) — Art. 147 (withholding tax exemption on dividends) and Art. 166 (participation exemption), Légilux — legilux.public.lu/eli/etat/leg/loi/1967/12/04/n3/jo
• Règlement grand-ducal du 21 décembre 2001 portant exécution de l’article 166, alinéa 9, du LIR (capital-gains exemption), Légilux
• Loi du 22 décembre 2023 transposing Directive (EU) 2022/2523 (Pillar Two), Légilux
• Law of 11 May 2007 on the Société de gestion de Patrimoine Familial (SPF), Légilux
• Loi du 10 août 1915 on commercial companies (consolidated text) — governs the host legal vehicle, Légilux — legilux.public.lu/eli/etat/leg/loi/1915/08/10/n1/jo
• Guichet.public.lu — Parent-subsidiary regime — guichet.public.lu
• Administration des contributions directes (ACD) — Form 506A (annex to corporate income tax return Form 500)
• Registre de Commerce et des Sociétés (LBR) — www.lbr.lu — authoritative source for Luxembourg active and inactive entity counts by legal form

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All article numbers, thresholds, and rules verified against the consolidated LIR text, the Grand-Ducal Regulation of 21 December 2001, the 1915 Law, and Guichet.public.lu on Légilux as of 13 May 2026. Reviewed annually or sooner on regulatory change.

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