As the State Council waived its second constitutional vote on 20 June 2023, the Law will enter into force on the first day of the month following that of its publication in the Luxembourg official gazette.

For further information on what these developments mean for you or your organization, please get in touch with your usual Baker McKenzie contact.

Key takeaways

Online incorporation

• Type of companies concerned

The Law creates the possibility for Luxembourg public limited liability companies (SA), private limited liability companies (SARL) and partnerships limited by shares (SCA) to be incorporated online.

While the involvement of the Luxembourg notary will still be required to set up these companies online, the notarial deeds could be drawn up electronically and without the obligation for their founder(s) to physically appear in front of the notary in Luxembourg.

Online incorporation can be done using standard articles of association made available free of charge by the Chamber of Notaries.

Incorporations with founders being physically present in front of the notary (or represented pursuant to a power of attorney) with the notarial deed drawn up in hard copy remain possible.

• Type of contributions

If the share capital is paid in cash, such payment can be made online in an account opened with a bank operating in the EU in the name of the company to be incorporated. Proof of this payment can also be provided online.

When the company's share capital includes a contribution in kind as well as when the Luxembourg notary has reason to suspect falsification or usurpation of identity or non-compliance with the rules relating to the legal capacity of a party or the power of representation of a company by a party to the deed, the Luxembourg notary may require that the party be physically present at their office to draw up and sign the deed.

Notarial deeds enacted in electronic format

The Law introduces the possibility for notarial deeds (with the exception of wills) to be enacted in electronic format, provided that they are signed by the notary by means of a qualified electronic signature process within the meaning of the eIDAS Regulation¹ and they are established through the use of the notarial electronic exchange platform made available by the Chamber of Notaries.

The notarial electronic exchange platform is a computer network allowing notaries to draw up notarial deeds in electronic format, collect the electronic signatures of the parties, obtain data from public bodies and authorities, and transmit data to public bodies and authorities.

The following three conditions will have to be met, in addition to specific conditions and in the form laid down by the applicable laws and regulations, for the notarial deeds in electronic format (and their copies in electronic format) to be valid as originals:

• The notary as author and signatory of the notarial deed must be duly identified.
• The technical process used must guarantee the integrity of the notarial deed's content from when they are created in their final form.
• The technical process used to establish the notarial deed must be intelligible to human beings.

The enactment and signature of the notarial deed in electronic format can either be done in the presence of the parties or remotely via the electronic exchange platform of the notary.

Notarial deeds signed remotely through electronic signature

Parties to the deed may choose not to be physically present or represented in front of the notary but to sign remotely the notarial deed in electronic format through electronic signature from Luxembourg or abroad.

In such a case, those parties must be granted access to the notarial electronic exchange platform under the supervision of the notary, and the notary may require the parties to use a qualified electronic signature within the meaning of the eIDAS Regulation.

In any case, the notary will remain legally bound to verify the accuracy of the identities of the parties to the deed and of the statements and indications that the notary certifies in the deed. The notary may require the use of videoconferencing or other technological means providing real-time audiovisual connection with the remote party.

Electronic exchange of information on companies and branches between EU commercial registers

EU registers already exchange between themselves information relating to foreign branches and cross-border mergers of companies.

The Law aims to strengthen the flow of exchanges between these registers, in particular in the event of registration or closure of a branch in another member state.

For that purpose, the following branches will have to be registered with the Luxembourg trade and companies register (RCS):

• Luxembourg branches of commercial and civil companies, economic interest groupings and European Economic Interest Groupings (EEIGs) governed by Luxembourg law  ̶  Where those commercial and civil companies, economic interest groupings and EEIGs are already registered with the RCS, a registration number will be assigned to their Luxembourg branches by the manager of the RCS.
• All EU branches of Luxembourg companies incorporated under the form of SA, SARL and SCA.

Further reform ahead

On 29 March 2023, the European Commission issued a proposal for a directive amending Directives 2009/102/EC and (EU) 2017/1132 as regards further expanding and upgrading the use of digital tools and processes in company law.

The proposal aims to make more information about companies publicly available through the Business Registers Interconnection System (BRIS), ensure that company data in business registers is accurate, reliable and up-to-date, and cut red tape when companies use company information from business registers in cross-border situations.

In particular, the proposal foresees:

• The introduction of a digital EU Company Certificate that will be issued by a national register, be authenticated by means of trust services referred to in eIDAs Regulation (in order to guarantee that it has been provided by the register and that its content is a true copy of the information held by the register or that it is consistent with the information contained therein), be accepted in all member states as conclusive evidence of the incorporation of the company, be obtained through BRIS.
• The introduction of a multilingual standard model for a digital EU power of attorney.
• To expand the use of the "once-only principle" when setting up a company in other EU member states.
• To remove formalities such as the need for an apostille or certified translations for company documents.

1 Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions within the internal market.