Selling Shares in a Company in Luxembourg
Selling Shares in a Company in LuxembourgUpdated on Sunday 13th November 2016
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Luxembourg is one of the most stable countries in Europe from an economic point of view, which is why the number of foreign investors keeps growing year after year. If taking into account the fact that the Government has started to amend its laws in order to accommodate the development of other industries apart from the financial one, the Grand Duchy is bound to become one of the most important business centers in Europe.
While certain investors are interested in starting their own companies, there are also others who want to buy shares in Luxembourg companies in order to shorten the path towards owning a business. The main law providing for the sale of company shares is the Commercial Code.
Private and public share sales in Luxembourg
The Luxembourg legislation provides for two types of companies which can be involved in share sales. These are the private companies (SARL) and public companies (SA) in Luxembourg. Share sales are also governed by the mergers and acquisitions legislation which also provides for asset sales in a Luxembourg company. The sale of shares implies the buyer to take over a company without its liabilities, which is why this type of transaction is usually preferred. Another great advantage of selling shares in a company in Luxembourg is that this operation is tax-free.
Share sales in Luxembourg are concluded once the parties have drafted, agreed upon and signed a sale-purchase agreement. The contract will not contain any specific provisions on the shares, nor third-party consent is required.
With respect to share sales of a public company in Luxembourg, these can only occur with the Grand Duchy’s Financial Regulator consent.
Find out from the video below how to sell the shares in a company in Luxembourg:
Restrictions to selling shares in a company
The Luxembourg legislation also imposes several restrictions on share sales in the Grand Duchy which apply to private companies only. A SARL company may not sell its shares to other persons in case these shares represent more than 75% of the shareholders’ participations. Share sales representing at least 75% of the company’s total number of shares in the case of private entities must be approved through a general meeting of the shareholders. There are no restrictions related to selling shares in a public company in Luxembourg.
For assistance in drafting sale-purchase agreements, do not hesitate to contact our law firm in Luxembourg.