Most Luxembourg companies change hands by a share deal. In an SARL, a transfer to an outsider needs approval by 75% of the capital, or 50% if the articles say so, a private deed is enough and the RCS and RBE are updated within one month. A non-EEA buyer of a company in a critical sector files with the Ministry of the Economy before closing. A Luxembourg holding sells tax-free after 12 months with 10% or EUR 6 million; a resident individual with more than 10% pays half the global rate.
Buying or selling a Luxembourg company is a share deal, most of the time
Most owner-managed businesses and holdings in Luxembourg change hands through a share deal. The buyer acquires the shares of the SARL or SA, and with them the company itself: its contracts, its employees, its tax history, its permits and its liabilities, known or not. The closing is simple; the preparation is not.
The alternative is an asset deal. The company sells its business, or selected assets, to a buyer who takes them into its own company. Asset deals are slower to close but let the buyer leave unwanted risks behind.
This note covers the route, timetable, contract, formalities and tax, and ends with a deal checker. For the yearly obligations a buyer inherits, see our note on running a Luxembourg SARL or SA.
Shares or assets
Shares carry everything; assets move one by one.
75% of capital
For SARL transfers to outsiders, unless the articles say 50%.
Non-EEA buyers
FDI filing for critical sectors before closing.
10% / EUR 6m
Exempt gain for a holding after 12 months.
What moves, who consents and who keeps the risk
In a share deal the legal entity stays the same. Contracts, registrations and employees stay where they are, and the buyer inherits every past tax position and hidden claim. Protection comes from due diligence and the contract.
In an asset deal the seller company transfers a business, called a fonds de commerce in Luxembourg practice: goodwill, customers, name, equipment, stock, contracts and sometimes real estate. Contracts need the other party's consent, real estate a notarial deed, and permits do not move at all.
| Point | Share deal | Asset deal |
|---|---|---|
| What is transferred | The shares; the company is unchanged | Chosen assets and contracts |
| Liabilities | All stay with the company, hence with the buyer | Stay with the seller, except those taken over or imposed by law |
| Contracts | Continue; change of control clauses can bite | Assignment with counterparty consent |
| Employees | Same employer; no transfer rules | Transfer automatically with the business |
| Business permit | Stays, unless the qualifying manager leaves | Buyer needs its own before trading |
| Real estate duties | Generally none on the shares | 7% or 10% on the property |
| Seller's tax | Gain on shares, often exempt | Gain in the company, then tax on distribution |
Employees in an asset deal. When a business is transferred as an economic unit that keeps its identity, the Luxembourg Labour Code applies the transfer-of-undertaking rules that implement Directive 2001/23/EC. Employment contracts pass to the buyer automatically, on their existing terms. The transfer itself is not a ground for dismissal. The staff delegation must be informed, and consulted on planned measures, before the decision; the buyer remains liable for obligations that arose before the transfer. A share deal does not trigger these rules, because the employer does not change.
A logistics SARL in Bettembourg is for sale at EUR 2.4 million. Due diligence finds an unresolved VAT audit for 2022 and 2023 and a disputed claim from a former subcontractor. The buyer offers EUR 2.1 million for the business only: the customer contracts, the fleet, the lease and the 14 employees, who transfer with their seniority. The seller keeps the company and both disputes; the buyer obtains its own business permit before taking over.
Law and practice: Labour Code, Articles L.127-1 to L.127-6 (transfer of undertaking), implementing Directive 2001/23/EC; Labour Code provisions on information and consultation of the staff delegation. Civil Code on assignment of contracts and receivables, including Article 1690.
From the first call to closing in three to six months
A clean deal between parties who know each other can sign within a month. A sale to a third party usually takes three to six months, longer with screening or regulatory approvals.
- Non-disclosure agreementBefore any figures change hands, with a non-solicitation period.
- Letter of intent or term sheetPrice mechanism, structure, exclusivity and timetable; non-binding except exclusivity and confidentiality.
- Due diligenceFour to eight weeks in a data room.
- Negotiating the SPAThe share purchase agreement and disclosure letter.
- SigningClosing waits for any approvals set as conditions precedent.
- ClosingPayment, transfer of shares, resignations and appointments, register filings within one month.
What due diligence covers. The corporate review checks that the seller really owns the shares: the chain of transfers since incorporation, past approvals, the share register, and the filings with the RCS and the register of beneficial owners (RBE). The tax review covers returns, withholding tax on past dividends, VAT and intra-group loans; the employment review covers contracts, bonuses and claims; the regulatory review covers the permit and any licence.
AML, KYC and sanctions. Diligence runs both ways. The notary, the domiciliation agent and the bank must identify the new owners and their beneficial owners before acting, and the bank will repeat its onboarding. The seller should screen the buyer, its owners and the source of funds against EU and UN sanctions lists. Our note on EU sanctions compliance explains the screening that banks expect.
Foreign direct investment screening. Since 1 September 2023 a law of 14 July 2023 requires a filing with the Ministry of the Economy before an investor from outside the EU or EEA acquires control of a Luxembourg entity carrying out a critical activity. Control includes a majority of votes, the power to appoint most of the board, or 25% of the voting rights. Critical activities include energy, transport, water, health, communications, data, defence, finance, media and dual-use goods. The deal cannot close before clearance. The first phase lasts up to two months, a full screening up to 60 more days. Fines reach EUR 5 million for a company.
Merger control. Luxembourg has no national merger notification regime. Bill no. 8296 met a formal objection from the Council of State in 2025, and the government announced a revised bill for 2026. Deals above the EU thresholds, a combined worldwide turnover of EUR 5 billion and EU turnover of EUR 250 million for each of at least two parties, go to the European Commission.
Law and practice: Law of 14 July 2023 establishing a national screening mechanism for foreign direct investments, in force since 1 September 2023, read with Regulation (EU) 2019/452. Law of 30 November 2022 on competition; bill no. 8296 on the control of concentrations and the Council of State opinion of 2025. Council Regulation (EC) No 139/2004, Article 1. Law of 12 November 2004 on the fight against money laundering and terrorist financing.
Price, warranties and the clauses that move money
Locked box or completion accounts. With a locked box, the price is fixed on a balance sheet at a past date, the locked box date. From then on the economic risk and reward pass to the buyer, and the seller promises that no value leaks out: no dividends, no unusual payments to shareholders, no waived debts, except leakage listed in the agreement. Breaches are repaid euro for euro. With completion accounts, the parties agree an estimated price at closing and adjust it later on accounts drawn up at the closing date, usually for net debt and working capital.
A buyer values an IT services SARL at EUR 5 million on a cash-free, debt-free basis. The locked box accounts at 31 December 2026 show EUR 600,000 of cash and a EUR 400,000 bank loan, so the equity price is EUR 5.2 million. Permitted leakage is the founder's salary of EUR 15,000 a month until closing. If the founder also has the company pay a EUR 30,000 bonus to himself, that is leakage: the SPA requires him to repay EUR 30,000 to the buyer.
Earn-out. Part of the price depends on future results, typically revenue or EBITDA over one to three years. It bridges a valuation gap but invites disputes, so the SPA must define the metric, the accounting policies and what the buyer may change. A price conditioned on the seller staying employed can be treated as pay.
Warranties, indemnities and disclosure. The seller warrants facts about the company: title to the shares, accounts, tax, employees, contracts, litigation, compliance. The disclosure letter lists exceptions. Known risks, such as an open tax audit, belong in a specific indemnity, and a tax indemnity covers pre-closing periods.
Limitations. Typical limits are a cap, often a fraction of the price for general warranties and the full price for title, a basket or de minimis threshold for small claims, and time limits: around 18 to 24 months for general warranties and until the end of the statute of limitations plus a margin for tax. Limits do not cover fraud. Security comes from an escrow or a holdback.
W&I insurance. Warranty and indemnity insurance shifts the risk of a warranty breach from the seller to an insurer, letting the seller walk away with a clean exit. It excludes known issues.
Non-compete. The seller often agrees not to compete or solicit staff for two to three years. It must be limited in time, place and activity; an employee non-compete has stricter Labour Code limits. For the relationship among co-investors after the deal, see our note on the shareholders' agreement.
Law and practice: Civil Code, general law of contracts and sale (Articles 1582 and following), including the warranty against hidden defects as varied by the SPA; Labour Code, Article L.125-8 on post-employment non-competes. Market practice on locked boxes, earn-outs and W&I insurance.
Approvals, deeds, registers and permits
SARL. Shares pass freely between existing shareholders. A transfer to anyone else needs the approval of shareholders holding at least three quarters of the capital; the articles can lower this to one half. The transfer itself can be a notarial or a private deed. It binds the company and third parties only once notified to the company or accepted by it under Article 1690 of the Civil Code; in practice the managers sign an acceptance at closing. The new shareholding is filed with the RCS within one month.
SA. Registered shares are transferred by a declaration of transfer in the share register kept at the registered office, signed by both parties or their representatives. The articles may add approval or pre-emption clauses, and since 2016 a lock-up. SA shareholders do not appear on the RCS, so the buyer should insist on the original register at closing.
SCSp. Interests in a special limited partnership transfer under the limited partnership agreement; by default, the general partner must consent.
| Step | SARL | SA | Deadline |
|---|---|---|---|
| Shareholder approval | 75% of capital, or 50% if the articles say so | Only if the articles require it | Before transfer |
| Form of transfer | Notarial or private deed | Entry in the share register | At closing |
| Binding the company | Notification or acceptance, Art. 1690 | By the register entry | At closing |
| RCS filing | New shareholders and managers | Directors only | Within 1 month |
| RBE update | If a beneficial owner changes | If a beneficial owner changes | Within 1 month |
Managers and the business permit. Manager changes are filed with the RCS within one month. If the company trades, its business permit is tied to a named manager who meets the integrity and, where relevant, qualification conditions. If that manager leaves, the successor needs a new permit, so file before closing or keep the seller on during the handover. Our note on the Luxembourg business permit sets out the conditions.
Change of control clauses. Loan agreements usually allow the bank to call the loan on a change of control. Leases and licences may require consent. Firms supervised by the CSSF or the Commissariat aux Assurances need prior notification and non-objection for anyone acquiring a qualifying holding, generally 10% or more. These consents go into the conditions precedent.
Law and practice: Law of 10 August 1915 on commercial companies: SARL transfers to non-members (Article 710-12) and their form and opposability (Article 710-13), referring to Civil Code Article 1690; SA share register (Article 430-3); special limited partnership (Articles 320-1 and following). Law of 19 December 2002 on the RCS; Law of 13 January 2019 on the RBE. Law of 2 September 2011 on business permits, as amended in 2023. Law of 5 April 1993 on the financial sector on qualifying holdings.
What the seller pays, and what the buyer inherits
A company as seller. A Luxembourg holding that sells shares in a fully taxable company is exempt on the gain if it has held at least 10% of the capital, or shares that cost at least EUR 6 million, for at least 12 months without interruption, or commits to do so. Earlier write-downs and expenses deducted on the shareholding are recaptured. See our notes on the participation exemption and on selling a business through a B.V. or SOPARFI.
An individual as seller. A Luxembourg resident who holds, or held in the previous five years, more than 10% of the company has a substantial shareholding. A gain realised more than six months after acquisition is taxed at half the global rate, so at most about 22.9%, after an allowance of EUR 50,000, or EUR 100,000 for a couple, per ten years. Budget bill no. 8800 of 7 October 2026 proposes to lengthen this period to twelve months from 2027; it still has to pass.
A non-resident individual is taxed in Luxembourg on the gain on a substantial shareholding only in limited cases, notably a sale within the holding period, or a former long-term resident selling within five years of leaving. Treaties usually give the right to tax to the state of residence, but land-rich clauses can allocate it to Luxembourg.
An SARL is sold for EUR 3.6 million; its shares cost EUR 100,000 eight years ago. A Luxembourg-resident founder holding directly has a gain of EUR 3.5 million. After the EUR 50,000 allowance, EUR 3.45 million is taxed at half the global rate, about 22.9%: roughly EUR 790,000 of tax. Had the founder held through a SOPARFI for more than 12 months, the holding would sell tax-free and keep EUR 3.6 million to reinvest; tax arises only when it pays the money out.
Asset deal. The seller company is taxed on the gain on the assets at the normal rate, 23.87% in Luxembourg City in 2026 and 22.80% planned for 2027, and the shareholders are taxed again when the proceeds are distributed, with 15% withholding unless an exemption applies. Our note on dividends to non-residents covers that second layer.
Registration duties and VAT. A transfer of shares in an SARL or SA attracts no proportional registration duty; a small fixed duty applies only if the deed is registered. A direct transfer of Luxembourg real estate costs 6% plus 1% transcription duty, and a further 3% in Luxembourg City for non-residential property. An artificial share deal can be requalified. The sale of shares is exempt from VAT, so VAT on advisers' fees is often not recoverable for a pure holding. The transfer of a business as a going concern is outside the scope of VAT.
Tax losses. Losses stay with the legal entity, so a share deal keeps them. Losses since 2017 can be carried forward for 17 years; bill no. 8800 proposes to remove that limit from 2027. Luxembourg has no statutory change-of-ownership rule, but under the abuse of law doctrine known as Mantelkauf the authorities can refuse losses when a company is bought mainly for them, especially where shareholders and activity both change. In April 2024 the Administrative Court accepted losses where only the activity changed. The same risk applies to a shelf company.
Price adjustments. Leakage repayments and warranty payments normally adjust the price for both parties.
Law and practice: Income Tax Law (LIR): Article 166 and the Grand-Ducal Regulation of 21 December 2001 (participation exemption); Articles 99bis and 100 (speculative gains and substantial shareholdings); Article 131 (half global rate); Article 156 (non-residents); Article 114 (losses); Article 6 of the Steueranpassungsgesetz (abuse of law). Budget bill no. 8800 of 7 October 2026. Administrative Court, 25 April 2024, nos. 48917C and 49336C. Guichet.lu, registration fees; VAT Law of 12 February 1979.
When the deal is a merger, a demerger or a move abroad
Groups often merge the target into the buyer's company after closing, or split a business before selling part of it.
Domestic mergers and demergers. The 1915 law provides a full procedure: common draft terms published at least one month before the shareholders' meetings, management reports, an independent expert's report unless all shareholders waive it, and a notarial deed. A simplified procedure applies when the absorbing company holds all the shares of the company it absorbs: no meeting of the absorbing company is required, and no expert report. A merger transfers all assets and liabilities by operation of law.
Cross-border operations. The law resulting from bill no. 8053, adopted on 23 January 2025, transposed the EU Mobility Directive. It adds cross-border conversions and divisions to cross-border mergers. Our note on moving a company to Luxembourg or the Netherlands covers the tax side of a move.
Tax neutrality is available under the LIR, subject to conditions reviewed case by case.
Law and practice: Law of 10 August 1915, Articles 1020-1 and following (mergers), Article 1023-1 (simplified merger), Articles 1030-1 and following (demergers), and the cross-border regime introduced by the law resulting from bill no. 8053 transposing Directive (EU) 2019/2121. LIR, Articles 170 and 170bis.
Check your deal route
Pick your side and the facts of the deal. The checker lists what must happen before and after closing, and what to watch.
Deal readiness: your route and your checklist
Seven answers about the deal. You get the approvals and filings it needs, whether a notary or a screening filing is involved, the tax points for the seller, the contract clauses to negotiate first and the red flags to clear before signing.
Most deals are share deals; the company keeps its contracts.
75% of capital for SARL transfers to outsiders, unless lowered.
Non-EEA buyers in critical sectors file before closing.
A holding held 12 months sells tax-free.
Buying and selling a Luxembourg company: frequent questions
Do I need a notary to sell shares in a Luxembourg SARL?
No. A transfer of SARL shares can be made by private deed. The transfer binds the company once it is notified to or accepted by the company under Article 1690 of the Civil Code, and the new shareholding is filed with the RCS within one month.
What majority is needed to approve a transfer of SARL shares to an outsider?
Shareholders holding at least three quarters of the share capital, unless the articles lower the threshold, which they may do down to one half.
Is there stamp duty or transfer tax on a share deal in Luxembourg?
As a rule, no proportional duty applies to a transfer of shares in an SARL or SA. A direct transfer of Luxembourg real estate costs 7%, or 10% in Luxembourg City for non-residential property, and the tax authorities can requalify an artificial share deal.
Does Luxembourg have merger control?
Not yet. Luxembourg is the only EU Member State without a national merger notification regime. A revised bill was announced for 2026; large deals may need EU clearance.
When does a deal need FDI screening in Luxembourg?
When an investor from outside the EU or EEA acquires control, including 25% of the voting rights, of a Luxembourg entity active in a critical sector such as energy, transport, health, data, finance, media or defence.
Is the gain on selling a Luxembourg company taxable?
A Luxembourg company selling a stake of at least 10%, or one that cost EUR 6 million, held for 12 months, is normally exempt. A resident individual with more than 10% pays half the global rate after a six-month holding, with an allowance of EUR 50,000 per ten years. Bill no. 8800 proposes twelve months from 2027.
Can the buyer use the target's tax losses?
Usually yes, because the losses stay with the same legal entity. They can be refused for abuse of law when a company is bought mainly for its losses.