SARL-S in Luxembourg: The Simplified SARL Explained

SARL-S (société à responsabilité limitée simplifiée) is Luxembourg's cheapest way to get limited-liability protection. Launched in 2017, it lets you set up a company with as little as €1 of capital, no notary, and a turnaround of 1–2 weeks. The trade-off: it's only for natural persons, you can be in only one SARL-S at a time, and your activity must require a business permit. This guide covers how it works, what to watch out for, and how it compares to a classic SARL.

The SARL-S was created by the law of 23 July 2016 (in force 16 January 2017).

What is a SARL-S?

A SARL-S is a simplified version of a classic SARL. Same legal personality, same limited-liability protection, same corporate tax treatment. The simplifications are:

• Capital can be anything from €1 to €12,000 — you pick
• No notary — you sign a private deed (acte sous seing privé)
• Faster, cheaper to set up

It was designed for first-time entrepreneurs, small business owners, craftsmen, and retailers who wanted a company form without the notary bill and €12k paid-up capital of a classic SARL.

Key rules to know

1. Only natural persons, one per person

Only natural persons (individual humans) can be shareholders of a SARL-S. Other companies cannot be shareholders. And a single natural person cannot be a shareholder in more than one SARL-S at a time. If you already own a SARL-S, you cannot form or join another one.

(Exception: if you inherit SARL-S shares on the death of another shareholder, you can temporarily hold two.)

2. Only for activities covered by the establishment law

A SARL-S can only be formed for an activity that falls within the loi du 2 septembre 2011 on the right of establishment — the same law that governs business permits. That includes commerce, craft, HORECA, transport, and also many liberal professions that require a business permit (architect, engineer, expert-comptable, etc.).

What cannot use a SARL-S are professions regulated by their own Ordre outside the 2011 law: avocat (lawyer), notaire (notary), médecin (doctor), pharmacien (pharmacist), réviseur d'entreprises (auditor). These professions must use sole proprietorship or a classic SARL.

3. The 5% legal reserve rule

Each year, at least 5% of the net profits must be allocated to a legal reserve until capital + reserve reaches €12,000. After that, the obligation stops. There's no time limit — it can take 5 years, 20 years, or never, depending on how profitable the business is.

4. Converting to a classic SARL

Conversion is mandatory when:

• You exceed 100 shareholders, or
• Your capital exceeds €12,000

Once capital + reserve reaches €12,000, you may keep running as a SARL-S — you're not forced to convert at that moment. But many owners convert voluntarily so they can:

• Take on legal-person shareholders (holding companies, other firms)
• Run more than one company of the same kind

Conversion requires a notarial deed to amend the articles of association. It is not automatic.

5. Directors' liability for public debts

Shareholders' liability is limited to their contribution — that's the whole point of a SARL-S. But gérants (managers) can be personally liable for public debts under two separate legal regimes:

• Tax and VAT — under § 103 of the Abgabenordnung (Loi générale des impôts), if the gérant fails to ensure the company meets its tax obligations.
• CCSS contributions — under the Code de la Sécurité Sociale, with its own trigger and procedure.

This is the same as for a classic SARL. The liability shield does not extend to public debts.

Tax treatment

A SARL-S is taxed like any other company:

• Corporate income tax (IRC): 14% up to €175,000 taxable profit; 16% above €200,000 (2026 rates). Plus 7% solidarity surtax.
• Municipal business tax (ICC): rate varies by commune (~6.75% in Luxembourg City).
• Net wealth tax (IF): 0.5% up to €500m net assets. Since the 1 January 2025 reform (Loi du 20 décembre 2024), the minimum IF is based on total balance-sheet size, ranging from €535 (balance sheet up to €350,000) to €32,100 (balance sheet above €30 million). For most SARL-S companies, the minimum IF is €535 per year.

Combined effective rate in Luxembourg City: ~24% for profits above €200k. Below €175k, lower.

Setup cost and timeline

Typical total cost: €200–€500, including:

• Business permit application: ~€50
• RCS filing fees: ~€100–€200
• Memorial publication of articles: ~€40
• Optional legal/admin support: €0–€200

Timeline: 1–2 weeks once you have the business permit. If you're also applying for the permit, add about 3 months for that.

What you need to set up a SARL-S

1. A business permit for your activity (or an application in progress in the name of the gérant)
2. Articles of association (statuts) — private deed, no notary
3. A registered address in Luxembourg (non-residential for most activities)
4. Paid-up capital (€1 to €12,000) deposited in a blocked bank account
5. Identification of shareholders and gérants (passport, proof of address, criminal record extract)
6. RCS filing (via lbr.lu)
7. RBE filing (beneficial owners register)

Typical order: business permit → bank account → articles of association → RCS filing → VAT registration → CCSS affiliation.

Who is it for?

SARL-S fits well if you are:

• A first-time entrepreneur starting a commercial or craft activity
• A craftsman, retailer, or service provider wanting liability protection without the notary bill
• Not planning to bring in a corporate investor (only natural persons can be shareholders)
• Confident your activity requires a business permit

SARL-S doesn't fit if:

• You're a liberal profession (lawyer, doctor, architect, consultant without a commercial permit) — you cannot use SARL-S
• You want a holding company or corporate shareholders — use a classic SARL
• You already own another SARL-S — you cannot form a second

Quick reference

Related articles

• Legal forms for your business in Luxembourg
• Sole proprietorship in Luxembourg — pros and cons
• Sole proprietorship vs SARL — which to pick?
• The 4 criteria for a business permit

Nobody said it would be simple. But what you're building — a business, a livelihood — is worth every form. Bravo.
🙌💜 Your BravoLisa Team

This article is for general information purposes only and does not constitute professional tax, legal, or accounting advice. Every situation is different — consult a qualified professional (tax adviser, accountant, or lawyer) for advice specific to your circumstances. BravoLisa does not accept liability for decisions made based on this information.

Last updated: April 2026. Rates and thresholds may change — always verify with the relevant authorities for the most current figures.

Updated on: 17/04/2026