Overview of SAS companies in Luxembourg
The Simplified Joint Stock Company (SAS) is a form of company very similar to the Public Limited Company (SA), it was introduced in the Luxembourg legal system in 2016, after the Luxembourg legislator observed the success that the French SAS had had. One of the main objectives was to introduce into Luxembourg law a form of company with a great deal of freedom in terms of corporate governance rules.
The initial formalities are similar to those of a Société Anonyme (SA), the minimum share capital required to form an SAS is 30,000 euros, divided into registered shares and at least one partner is needed, who can be a natural person or a legal entity. Like an SA, its incorporation must be carried out through a notarial act.
SAS companies are particularly suitable for startups, joint ventures and small or medium-sized companies looking for a less formal structure than the SA, but with sufficient capacity to develop complex projects.
Requirements for opening an SAS in Luxembourg
The formalities for incorporating an SAS in Luxembourg are similar to those of a Société Anonyme (SA) although there are some differences. Below we will examine in detail the characteristics of the SAS which in many cases constitute at the same time the requirements necessary to incorporate them. Then, in the following section, we will focus on highlighting the main differences with respect to joint stock companies.
Shareholders
A Luxembourg SAS can be formed by one or more shareholders, who can be individuals or legal entities, with no maximum limit. The liability of these shareholders is limited to the amount of their participation in the share capital, which protects their personal assets against the debts of the company.
Shareholders are free to define their rights and obligations in the company's bylaws, which makes it possible to personalize relations between partners. In this sense, this type of legal form is particularly appreciated for companies with a small number of shareholders who wish to maintain a high level of internal control.
Shares
Shares may not be publicly offered or listed on the stock exchange and the transfer of shares as well as the approval of new shares must follow the rules set forth in the bylaws. Any transfer of shares in violation of the bylaws will be void as of right, this gives the founders the possibility to create a protective structure that allows them to largely control the entry of new shareholders and to give the necessary comfort level to potential investors.
Share Capital
The minimum share capital required is 30,000 euros. At least 25% of the capital must be paid up at the time of incorporation, i.e. a minimum of 7,500 euros. The capital can be contributed in cash or in-kind (goods, real estate, etc.). If contributions in kind are made, they must be valued by an independent expert. Before formal incorporation, the share capital must be deposited in a bank account in the name of the company with a bank in Luxembourg.
Governance structure
The SAS offers a very flexible governance structure, it can be managed by a single president or by a collegial body such as a board of directors as defined in the articles of association.
The only requirement is that the SAS has at least one president, who can be a legal entity or an individual. The president is vested with the broadest powers to act in all circumstances on behalf of the company and within the limits of the corporate purpose. The articles of association establish the modalities of appointment of the president, his resignation and the duration of his term of office. The president may be a partner or a third party.
The law does not provide for other mandatory management bodies other than the president, although it is possible to create such bodies in the articles of association. In addition, the law also provides for the possibility of appointing one or more directors who may exercise the powers entrusted to the president, or part of them, under the conditions set forth in the bylaws. These directors will have the same powers as the president with respect to third parties.
The office of president or director may be entrusted to a legal entity, but in this case, the company must appoint a permanent representative to perform this task in the name and on behalf of the legal entity. Furthermore, this representative may only be removed if his successor is appointed at the same time.
Duration
A SAS can be incorporated for a limited or unlimited period and it is essential to establish the duration in the articles of association.
Place of operation
The SAS must have a registered office in Luxembourg, this place constitutes its principal place of business and must be mentioned when the company is registered in the Luxembourg Trade and Companies Register (RCS).
Establishment permit
Depending on the activity to be carried out by the company an establishment permit may be required, this permit is mandatory for commercial, industrial, artisanal and some self-employed activities. This permit can be obtained online with the General Directorate for SMEs and Entrepreneurship of the Ministry of Economy.
Special permits and authorizations
Depending on the activity of the company it may require special permits or authorizations.
Articles of Association
The articles of association are the legal pillar of the SAS, they must be drafted with great care and must then be approved by a notarial act.
Registration with the Registry of Commerce and Companies (RCS)
The corporation must be registered with the Registre de Commerce et des Sociétés (RCS) in Luxembourg. This registration is mandatory and formalizes the legal existence of the company.
Differences between an SA and an SAS in Luxembourg
Since joint stock companies and SAS have many similarities, it is worthwhile to review their main similarities and differences to better understand the scope of SAS. The following table then shows this comparison.
| Aspect | SA | SAS |
| Minimum Share Capital | 30,000€, at least 25% paid up | 30,000€, at least 25% paid up |
| Incorporation | By mandatory notarial act | By mandatory notarial act |
| Shareholders | No limit, nominative shares | No limit, nominative shares |
| Shareholders' Liability | Limited to the amount of their contributions | Limited to the amount of their contributions |
| Stock Exchange Listing | Allowed | Not allowed |
| Transfer of Shares | Generally free, unless restricted by statutes | May be restricted as defined in statutes (approval clauses, pre-emption rights, etc.) |
| Governance Structure | Board of Directors (minimum of three members) | Flexible, must have a president but may also include a collegial body |
| Statutory Flexibility | Limited to the provisions of law | High, customizable statutes |
| Establishment Permit | Required | Required |
| Audit | Mandatory if certain thresholds are exceeded | Mandatory if certain thresholds are exceeded |
| Application Sector | Suitable for large companies and those seeking listing | Ideal for startups and private companies |
Process to open an SAS in Luxembourg
As we have already seen the main characteristics of the SAS in Luxembourg as well as the requirements for its incorporation, we can already have an idea of the procedure to incorporate it. We will now, however, go more in-depth in this sense, taking up again some of the points we have already seen but establishing a certain order to show more clearly what is the step-by-step process to create a SAS in the Grand Duchy. This order is indicative, however, as some steps can be carried out in a slightly different order.
Preparation of the project and creation of a business plan
Before starting the legal process of incorporation, it is essential to carefully prepare the business project, this involves preparing a detailed business plan containing a market analysis, a marketing strategy, the organizational structure and financial projections.
This document is essential as it serves as a roadmap to guide the company's growth and make informed decisions. It is also a key tool for attracting investors, obtaining financing, assessing the viability of the business and anticipating challenges and opportunities.
Moreover, during this phase, it is crucial to define many of the aspects that will later be included in the bylaws, such as the type of company, the form of governance, the number of shareholders or partners and their contribution percentages. These elements help to structure the ideas, demonstrate the viability of the project and prepare the necessary documentation for the following steps.
Domiciliation of the Company
The SAS must have a registered office in Luxembourg, this choice must comply with local regulations and be suitable for the business activity.
Choice of a name for the company and verification of its availability
Before establishing a company, the entrepreneurs must choose a name for the company and check its availability. This is done by filing an application for a certificate of name availability electronically with the Luxembourg Business Registers (LBR).
Opening of a bank account and deposit of the share capital
Before signing the articles of association it is necessary to open a bank account in the name of the company being formed and deposit the minimum share capital required (30,000 euros). In doing so the bank will issue a certificate of blocking of funds which must be presented to the notary as proof. For this step, the final Articles of Association of the company are not required but it is necessary to submit a draft of the Articles of Association.
Drafting and signing the Articles of Association
In order to register the company it is indispensable to first draft its articles of association, these must contain essential information such as the name of the company, the registered office, the corporate purpose, the duration of the company and the capital stock and shares. Most of the elements to be included should have been prepared beforehand in the first step which deals with the definition of the project. Once the articles of association have been drafted, they must be signed in the presence of a notary.
Registration with the Registry of Commerce and Companies (RCS)
Once the articles of association have been signed, it is necessary to register the company with the Luxembourg Register of Commerce and Companies (RCS), a step that is usually carried out by the same notary. This registration is mandatory and confers legal personality to the company, officially recognizing it as a legal entity in Luxembourg.
Publication in the RESA
Once registered with the RCS, the incorporation of the company must be published in the Recueil Electronique des Sociétés et Associations (RESA), which is the official gazette of Luxembourg where all acts related to companies are published. This publication is a necessary step to make the existence of the company known to the public and to ensure transparency about its incorporation, domicile, share capital and administration. In Luxembourg, the notary is generally responsible for coordinating this publication.
Application for an establishment authorization if this is necessary
In certain cases, depending on the type of activity of the company it is necessary to apply for an establishment authorization. This authorization is mandatory for commercial, industrial, and artisanal activities and some self-employed activities.
It is possible to enter an establishment authorization request in two ways, either by submitting your establishment authorization request online via MyGuichet.lu, from your professional space. Or by sending a request for establishment authorization by postal mail to the General Directorate PME, craft and commerce.
General Directorate for SME, Craft and Retail:
- Phone: (+352) 24 77 47 00
- Address: B.P. 535 L-2937 Luxembourg
- Working Hours: Monday to Friday from 9:00 to 12:00 and from 13:30 - 16:30
Social Security registration
If the company is going to hire employees, it must register with the National Health Fund (CNS) to comply with social security and pension contribution obligations.
Registration for TVA purposes (if applicable).
If the company expects to invoice more than €35,000 per year, it must register with the TVA administration to obtain a TVA number.
