Corporate law
Setting up a SARL-S in Luxembourg in 2026: EUR 1 capital, conditions and steps
Quick answer
A simplified private limited liability company (SARL-S) is set up with capital of EUR 1 to less than EUR 12,000, fully subscribed. Since 2 June 2026, cash contributions may be paid up within twelve months at most (or less if the articles of association so provide). Reserved for natural persons, it can be set up by private deed, with a business permit depending on the activity, RCS registration and RBE declaration.
The SARL-S (simplified private limited liability company) makes it possible to launch a business with capital of EUR 1 to less than EUR 12,000. It is reserved for natural persons, with only one SARL-S per person, and can be set up without a notarial deed. In return, it must allocate 1/20th of its annual profit to a reserve until capital and reserve together reach EUR 12,000. It requires a business permit, registration with the RCS and a declaration to the RBE.
In short
- Capital set freely, from EUR 1 to less than EUR 12,000, fully subscribed; since 2 June 2026, payment of the capital subscribed in cash may be deferred for up to twelve months after incorporation if the articles of association so provide.
- Reserved for natural persons: only one SARL-S per person.
- Incorporation possible by private deed (no compulsory notary).
- Business permit required for the activity carried on.
- Registration with the RCS and declaration of the beneficial owners to the RBE.
- Obligation to allocate 1/20th of annual profit to a reserve until capital and reserve together reach EUR 12,000.
| Criterion | SARL-S | SARL |
|---|---|---|
| Minimum capital | EUR 1 (up to less than EUR 12,000) | EUR 12,000 |
| Shareholders | Natural persons only | Natural persons or legal entities |
| Number per person | Only one SARL-S | Several SARLs possible |
| Deed of incorporation | Private deed possible | Notarial deed compulsory |
| Enhanced legal reserve | 1/20th of profit until capital and reserve together reach EUR 12,000 | Standard legal reserve of 5% of profit, up to 10% of capital |
| Target profile | Low-capital start-up | SMEs, holding companies, established businesses |
What exactly is a SARL-S?
Quick answer. The simplified private limited liability company (SARL-S) is a simplified variant of the private limited liability company, or SARL, designed for starting a business with very little capital. It is sometimes called the '1-euro company', because its capital can go as low as EUR 1.
In concrete terms, the capital of a SARL-S is set freely, between EUR 1 and less than EUR 12,000. To raise the capital to EUR 12,000 or more, the company must leave the SARL-S regime by amending its articles of association: it then falls under the rules of the ordinary SARL. The SARL-S was designed as a springboard, not as a permanent structure.
The rest of its operation resembles that of a SARL: liability limited to contributions, management, shares, annual accounts. The difference lies in the reduced capital, the profile of the shareholders and a few safeguards detailed below.
Who is the SARL-S for?
The SARL-S is aimed first at people who want to get started without tying up EUR 12,000. A project founder, a craftsperson or a consultant starting out alone find in it an accessible entry point to limited liability.
On the other hand, it is reserved for natural persons. A company cannot be a shareholder of a SARL-S. This is a clear difference from the standard SARL, which accepts shareholders that are legal entities and often serves as a SOPARFI or holding company.
Another decisive point: a person can hold only one SARL-S at a time. The regime is not designed for stacking structures. If your project involves several companies, the standard SARL is better suited. The firm's corporate lawyer helps you decide.
The capital: from EUR 1 to less than EUR 12,000
The capital of the SARL-S is set freely by the shareholders, between EUR 1 and less than EUR 12,000, and must be fully subscribed on incorporation. The law of 18 May 2026, in force since 2 June 2026, amended article 720-4 of the law on commercial companies: cash contributions may be paid up within a maximum period of twelve months after incorporation, unless the articles of association provide for a shorter period; failing such a clause, they must genuinely be paid in, not merely promised. Contributions in kind call for separate treatment.
Very low capital is legally possible, but rarely a good idea in practice. A company with EUR 1 of capital inspires little confidence in a bank or a supplier, and quickly runs short of cash. Typical example: a consultant starting out often sets the capital in the low thousands of euros to give a minimum of credibility and operating headroom, while staying below the EUR 12,000 threshold.
The choice of amount is not neutral: it influences how the company is perceived, its ability to absorb the first expenses, and the pace at which it will have to build up its reserve. It is better to calibrate it to the actual project.
A company without a compulsory notary
This is one of the main attractions of the SARL-S: its deed of incorporation can be drawn up by private deed, without a compulsory appearance before a notary. Whereas the standard SARL requires a notarial deed, the SARL-S can come into being through a document signed between the shareholders.
This reduces the cost and the time needed for incorporation. Note, however: no notary does not mean no rigour. The articles of association must be properly drafted, because they set the corporate purpose, the allocation of shares, the manager's powers and the decision-making rules.
Hastily drafted articles are a frequent source of disputes, especially as soon as there are several shareholders. Having the deed reviewed or drafted by a professional remains a modest investment compared with the deadlocks it avoids.
The business permit remains essential
Choosing the SARL-S does not exempt you from the usual authorisations. For most commercial, craft or liberal-profession activities, a business permit issued by the Ministry of the Economy is required before starting.
This permit requires professional good repute (honorabilité professionnelle) and, depending on the activity, a qualification (diploma or experience) on the part of the person who will handle the effective management. The low capital of the SARL-S changes nothing about this requirement.
Certain regulated activities (financial advice, health, security) require specific approvals. An upfront analysis avoids incurring costs for an activity that, in the end, could not be authorised.
The set-up steps, one by one
Incorporation follows a logic close to that described in our guide to the steps for setting up a SARL, with a few simplifications. The activity is first characterised, then the business permit is prepared.
Next comes the deposit of the capital in an account in the name of the company being formed (unless deferred payment is provided for in the articles) and the drafting of the articles of association, which may take the form of a private deed. The company, which has legal personality from the deed of incorporation, is then registered with the Trade and Companies Register (RCS), which makes it enforceable against third parties after publication.
Finally, the beneficial owners are declared to the Register of Beneficial Owners (RBE), and tax and social security registrations are activated. The whole process can move fairly quickly, especially with no notary appointment to schedule.
Registration with the RCS and declaration to the RBE
Registration with the Trade and Companies Register (RCS), kept by the LBR (Luxembourg Business Registers), is compulsory. It is registration that makes the company exist legally and makes it effective against third parties.
Straight afterwards, the company must declare its beneficial owners to the Register of Beneficial Owners (RBE). According to Luxembourg Business Registers, the general deadline is one month from actual or presumed knowledge of the event to be declared, and the administrative fee is EUR 15 excl. VAT per registration or amendment, excluding assistance fees. Failure to declare is punishable by a criminal fine of EUR 1,250 to EUR 1,250,000, including for a small SARL-S.
These two registers are not optional: a SARL-S that is registered but not declared to the RBE is in breach from the outset. The two are therefore coordinated in the same sequence.
The mandatory reserve: the key mechanism
This is the compensating requirement for the reduced capital. Each year, the SARL-S must allocate at least 1/20th (5%) of its annual profit to a reserve, until the sum of the capital and this reserve reaches EUR 12,000.
In other words, the company gradually rebuilds the capital of a standard SARL from its own profits. As long as the EUR 12,000 threshold has not been reached, this portion of the profit cannot be distributed.
Typical example: a SARL-S set up with EUR 2,000 of capital that makes a profit will set aside 5% of that profit each year, until capital plus reserve together amount to EUR 12,000. This mechanism protects creditors and prevents empty shells that remain undercapitalised over the long term.
Tax and ongoing obligations
For tax purposes, the SARL-S is treated like a SARL: it is subject to corporate income tax (IRC), municipal business tax (ICC) and, where relevant, net wealth tax. The low capital does not create any preferential tax regime.
It must register for VAT where required, register with social security (CCSS) if it employs or remunerates a director, and keep proper accounts, with filing of the annual accounts.
Over time, these ongoing obligations often weigh more than the incorporation itself. Anticipating them avoids unpleasant surprises a few months after the launch.
The limits and pitfalls to know
The SARL-S has clear boundaries. Only one per person, natural persons only, capital capped below EUR 12,000: this framework makes it unsuitable for structures with several companies or with shareholders that are legal entities.
Very low capital can also become a commercial and banking handicap. An undercapitalised company struggles to obtain credit, to rent premises or to reassure large clients. And the mandatory reserve takes a share of the profits as long as the threshold has not been reached.
Finally, raising the capital to EUR 12,000 or more requires an amendment of the articles of association that moves the company into the regime of the ordinary SARL. The SARL-S is a starting point, not a destination. Used well, it remains an excellent springboard.
SARL-S or SARL: how to choose?
The comparison table above sums up the essentials. In practice, the SARL-S suits a person starting out alone with limited means who wants to keep incorporation costs down.
The standard SARL is the obvious choice as soon as the project involves several associated companies, a more solid capital base, or a holding company role. It is also more reassuring for demanding partners.
Many entrepreneurs start with a SARL-S and then switch to a SARL once the business is established. This transition needs to be prepared: choice of initial capital, pace of allocations to the reserve, governance. A shareholders' agreement anticipates the possible entry of new partners.
What if you are not resident in Luxembourg?
The SARL-S is open to natural persons, whether or not they reside in Luxembourg. Nationality and residence are not conditions for being a shareholder. A project founder based abroad can therefore set up a SARL-S.
On the other hand, the business permit and the genuine substance of the activity (effective management, registered office) must still be organised seriously, especially from a tax perspective. For a founder from outside the European Union, setting up a company is often combined with an application for an entrepreneur residence permit.
The firm supports these cross-border matters from start to finish, from the choice of structure to registration, including coordination with the authorities. See also our overview of setting up a company in Luxembourg.
| Item | Detail / indicative range |
|---|---|
| Share capital | Set freely, from EUR 1 to less than EUR 12,000, fully subscribed; since 2 June 2026, payment of the capital in cash may be deferred for up to twelve months after incorporation if the articles of association so provide |
| Business permit | EUR 24 to EUR 50 (depending on the file) |
| Private deed | No notary's fees if drafted privately |
| RCS registration | around EUR 100 to EUR 250 |
| RBE declaration | EUR 15 excl. VAT per registration or amendment (LBR administrative fee; excluding assistance) |
| Annual accounting | EUR 1,000 to EUR 5,000 per year depending on the activity |
Depending on your profile
For entrepreneurs
The SARL-S allows you to launch your business with capital of EUR 1 to less than EUR 12,000 and without a compulsory notary. Plan for the business permit and the reserve of 1/20th of profit until capital and reserve together reach EUR 12,000.
For the self-employed
Ideal for starting out alone at low cost, the SARL-S is reserved for natural persons, with only one per person. Check the qualification your trade requires for the business permit.
For the young founder
The '1-euro company' is an accessible springboard to limited liability. The capital stays below EUR 12,000, but part of the profit must be placed in reserve each year until capital and reserve together reach EUR 12,000.
For the non-resident founder
There is no residence condition for being a shareholder of a SARL-S, but the business permit and substance remain essential. Outside the EU, combine the set-up with an application for an entrepreneur residence permit.
Official sources
Update history
- : Acquisition of legal personality linked to the deed of incorporation, transition to the ordinary SARL presented as an amendment of the articles of association, and ceiling of the SARL's legal reserve clarified.