Hot Topic: Adoption by the Luxembourg Parliament of Bill of Law 8053, Implementing the EU “Mobility Directive” (Directive 2019/2121)

The House of Deputies has conducted the first vote on the bill and requested a waiver to proceed with a second vote. It is highly unlikely that this waiver will be refused by the Council of State, so the vote that took place this morning should be considered final.

The next procedural steps include the Grand Duke's signature and publication in the Official Gazette, which will mark the law’s official entry into force.

Article 40 of the law introduces transitional provisions for cross-border operations already in progress. To ensure legal certainty, any transaction for which the project has been published before the law’s entry into force, but which remains incomplete, will continue to be governed by the existing legal rules. This approach is designed to prevent disruptions to ongoing transactions while providing a clear framework for their finalization.

This long-awaited law will represent a major change in the legal process applying to intra-European mergers, divisions, and corporate migrations. The role of the Luxembourg notary will be extended, as he will be in charge of conducting an extended control of legality, including the absence of abuse, notably fiscally. Any reorganization is also expected to take longer and require more extensive documentation. The protection of minority shareholders and workers is also enhanced.

It is furthermore worth noting that the Luxembourg legislator has decided that this new and more burdensome regime shall only apply to intra-European operations involving Luxembourg Sociétés Anonymes (SA), Sociétés à Responsabilité Limitée (S.à r.l.), and Sociétés en Commandite par Actions (SCA). This would therefore not impact domestic Luxembourg corporate reorganizations, extra-European reorganizations, or even intra-European reorganizations involving Luxembourg entities other than the SA, S.à r.l., and SCA.

We trust that the introduction of this new regime will strengthen the attractiveness of Luxembourg as a dynamic corporate market for international companies and groups wishing to restructure their European operations by way of mergers, divisions, or corporate migrations.

Stay tuned for our upcoming articles analysing significant aspects of this transformative legislation!