Société à responsabilité limitée simplifiée (Sàrl-S) — Luxembourg
By Jarno Partanen · Last reviewed May 18, 2026
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A Société à responsabilité limitée simplifiée (Sàrl-S) is a Luxembourg private limited liability company introduced by the Law of 23 July 2016 (in force 16 January 2017) and governed by Articles 720-1 et seq. of the Law of 10 August 1915 on commercial companies. Its share capital is set between EUR 1 and less than EUR 12,000, fully paid up in cash at incorporation; its shareholders must be natural persons; and its activity is restricted to those requiring a business permit. With 6,190 active entities (10,384 including inactive), it is a low-capital onramp for solo entrepreneurs and micro-businesses.
| Governing law | Loi du 23 juillet 2016 (in force 16 January 2017); Art. 720-1 et seq. of Loi du 10 août 1915 (consolidated) |
| Minimum capital | EUR 1, fully paid up in cash at incorporation |
| Maximum capital | Less than EUR 12,000 (commonly stated as EUR 11,999) |
| Apports in kind | Not permitted — cash contributions only |
| Shareholders | 1 to 100 natural persons only (no legal entities); one Sàrl-S per natural person |
| Notarial deed | Not required — incorporation by private deed permitted |
| Management | One or more gérants, who must be natural persons |
| Tax regime | Opaque — CIT + municipal business tax + net wealth tax, on the same basis as a standard S.à r.l. |
What is a Sàrl-S under Luxembourg corporate law?
The Sàrl-S is a low-capital variant of the S.à r.l., created to give individual entrepreneurs a fast, inexpensive route to a limited-liability company; it is governed by the same Loi 1915 framework, modified by Art. 720-1 et seq. inserted by the Law of 23 July 2016.
The Sàrl-S is intended for natural persons starting a commercial, industrial, artisanal, or certain liberal-profession activity. Its activity scope is bounded by the Law of 2 September 2011 governing access to those professions; an autorisation d'établissement (business permit) is required. Holding-company activity, banking, insurance, financial-sector activity, and the regulated investment vehicles (SICAR, SICAV, RAIF, SIF) are excluded by activity scope. The form is governed by the SARL rules of the 1915 Law except where Art. 720-1 to 720-6 modify them.
How much share capital does a Sàrl-S need?
Share capital is set between EUR 1 and less than EUR 12,000, fully paid up in cash at incorporation; in-kind contributions are not permitted, and a special legal reserve is built from 5% of annual net profits each year until capital plus reserve reaches EUR 12,000.
The "one-euro company" framing is statutory: a Sàrl-S can be incorporated with EUR 1 of cash capital. The capital must be fully paid up at incorporation, and only cash contributions are accepted — contributions in kind are excluded. The associates must build a special legal reserve from 5% of annual net profits each year until the sum of capital plus reserve reaches EUR 12,000. Bill of Law 8669, adopted by the Luxembourg Parliament on 28 April 2026, allows deferred payment of the standard S.à r.l. capital up to twelve months; its practical impact on the Sàrl-S is limited because the minimum is already EUR 1.
Who can be a shareholder, and how are shares transferred?
Shareholders must be natural persons (Art. 720-1), 1 to 100 in number, of any nationality or residence; a natural person may hold shares in only one Sàrl-S at a time except where shares are transmitted on death.
Legal entities cannot hold Sàrl-S shares; this is the defining departure from the standard S.à r.l. The one-Sàrl-S-per-person rule signals legislative intent: the form is a vehicle for individual entrepreneurship, not for group structuring. Shares are registered only (no bearer shares). Transfers to third parties require approval of associés representing at least three-quarters of the share capital, inherited from Art. 710-12 of the 1915 Law; statuts may lower the threshold to one-half. Each associé's identity, address, and shareholding are publicly filed at the Registre de Commerce et des Sociétés.
Who manages a Sàrl-S, and what governance applies?
Management is by one or more gérants who must be natural persons (Art. 720-1) — the Sàrl-S departs here from the standard S.à r.l., where a legal entity can serve as gérant since the 2016 reform.
Gérants may be associates or non-associates, of any nationality or residence. The natural-person-only gérant rule rules out using the Sàrl-S inside group structures with a corporate managing entity. The 60-associé threshold for a mandatory annual general meeting (Art. 710-15 of the 1915 Law, raised from 25 by the Law of 10 August 2016) and for a mandatory commissaire aux comptes applies to the Sàrl-S by reference, though Sàrl-S companies in practice rarely reach this threshold.
When does a Sàrl-S need an auditor?
A statutory audit by a réviseur d'entreprises agréé is required when the company exceeds, in two consecutive financial years, two of three thresholds: balance sheet total EUR 7.5 million, net turnover EUR 15 million, and 50 average full-time employees.
These thresholds, raised by the Grand-Ducal Regulation of 25 October 2024 implementing EU Directive 2023/2775 and applicable to financial years starting on or after 1 January 2023, apply to every Luxembourg commercial company including the Sàrl-S. Most Sàrl-S firms sit far below these levels. A commissaire aux comptes — a lighter oversight role inherited from the SARL rules — is required where the Sàrl-S has more than 60 associés, and is subject to pending abolition by Bill of Law 8286. See Luxembourg audit thresholds for the two-of-three test.
How is a Sàrl-S taxed?
The Sàrl-S is tax-opaque — taxed in its own name as a Luxembourg corporate taxpayer — subject to corporate income tax, the municipal business tax, and net wealth tax, on the same basis as a standard S.à r.l.
The combined effective rate of corporate income tax and municipal business tax in Luxembourg-Ville is 23.87% from 1 January 2025 (CIT 16% plus a 7% solidarity surcharge plus MBT 6.75%). Net wealth tax runs 0.5% on net assets up to EUR 500 million (0.05% above), with a progressive minimum of EUR 535 / 1,605 / 4,815 since FY 2025. Unlike a standard S.à r.l., the Sàrl-S cannot elect into the Soparfi tax regime, because financial-participation activity falls outside its authorised scope.
How long does it take to incorporate, and what does it cost?
Practical total: two to four weeks, materially faster than a standard S.à r.l. because no notarial deed is required (Art. 720-1) — articles of association can be signed under private deed and registered directly at the RCS.
The private-deed incorporation route is the Sàrl-S's main procedural advantage. The associates sign articles of association, register at the RCS, and publish in the Recueil électronique des sociétés et associations; no notary fees apply. The business-permit application precedes or runs alongside RCS registration. Combined cost typically runs in the low hundreds of euros rather than the EUR 1,500–2,500 notarial range of a standard S.à r.l. The bank-account KYC procedure for the share-capital deposit remains the practical timing bottleneck, but the simpler capital range (EUR 1 to under EUR 12,000) reduces friction.
How does a Sàrl-S file annual accounts?
Annual accounts are approved by the associés within six months of FY-end and filed at the RCS within one month of approval, via eCDF and the LBR portal; abridged-format filing is available given the Sàrl-S's typical size profile.
Sàrl-S firms typically file in abridged format, as the small-undertaking thresholds are far above their typical operating scale.
How does the Sàrl-S compare to the S.à r.l. and the S.A.?
| Sàrl-S | S.à r.l. | S.A. | |
|---|---|---|---|
| Governing law | Loi 23 juillet 2016; Art. 720-1 et seq. | Loi 1915 Title VII (Art. 710-1 et seq.) | Loi 1915 Title IV (Art. 420-1 et seq.) |
| Minimum capital | EUR 1 | EUR 12,000 | EUR 30,000 |
| Maximum capital | Less than EUR 12,000 | None | None |
| Apports in kind permitted | No | Yes | Yes (with auditor valuation) |
| Paid up at incorporation | 100% in cash | 100% (deferral pending Bill 8669) | 25% |
| Shareholders | 1–100 natural persons only | 1–100, natural persons or legal entities | 1+ (no cap), natural persons or legal entities |
| One per natural person | Yes (except by inheritance) | No | No |
| Notarial deed required | No (private deed permitted) | Yes | Yes |
| Share form | Registered only | Registered only | Registered or bearer (depositary) |
| Manager (gérant) type | Natural person only | Natural person or legal entity | Director board |
| Mandatory AGM | If >60 partners | If >60 partners | Every year |
| Typical use | Solo entrepreneurs, micro-businesses, consulting | SMEs, holdings, family businesses, professional firms | Listed companies, regulated entities, joint ventures |
The Sàrl-S, the standard S.à r.l., and the S.A. form a graduated capital ladder for closely-held businesses: the Sàrl-S removes the EUR 12,000 capital barrier for individual entrepreneurs; the standard S.à r.l. is the default form for SMEs once capital and structure mature; the S.A. fits when bearer-share flexibility, listing capability, or higher governance formality are required.
What this means for different readers
For a founder choosing between forms
Choose the Sàrl-S only if you are a natural person, your business needs less than EUR 12,000 of capital, your activity requires a business permit, and you do not need a holding company or financial-sector vehicle. Otherwise, the standard S.à r.l. removes the capital ceiling and accepts legal-entity shareholders, at the cost of a notarial deed and higher minimum capital.
For a cross-border worker, employee, or supplier
A Sàrl-S counterparty is a small Luxembourg-incorporated company owned by one or a few natural persons, with capital between EUR 1 and under EUR 12,000. Standard Luxembourg labour, social-security, and commercial-payment rules apply. The founders' identities, addresses, and shareholdings are publicly filed at the RCS.
For a journalist, researcher, or due-diligence analyst
A Sàrl-S is structurally transparent: every associé is a named natural person whose identity, address, and shareholding are publicly searchable at the RCS. Each natural person may appear as an associé of only one Sàrl-S. Annual accounts are filed in abridged format in most cases. Material events (manager changes, transformation to a standard S.à r.l., transfers) are published in the Recueil électronique des sociétés et associations.
Common confusions
- The Sàrl-S is a distinct legal form, not a sub-type of the S.à r.l. It is governed by its own set of articles (Art. 720-1 to 720-6) inserted by the Law of 23 July 2016, and its shareholder, capital, and gérant rules are not interchangeable with the standard S.à r.l.
- The Sàrl-S cannot be a Soparfi or holding company. Holding-company activity falls outside the Sàrl-S's authorised activity scope; founders who need a holding structure must use a standard S.à r.l. or S.A.
- The EUR 1 minimum is a legal floor, not an operating budget. Practical capital needs (bank-account opening fees, business-permit costs, operating runway) generally far exceed the legal minimum; the EUR 1 figure removes a legal barrier, not the underlying economic one.
Frequently asked questions
What is the difference between a Sàrl-S and a regular S.à r.l. in Luxembourg? A Sàrl-S has minimum capital of EUR 1 and maximum capital below EUR 12,000 (a regular S.à r.l. has EUR 12,000 minimum, no maximum); accepts only natural-person shareholders, with each person allowed to hold shares in only one Sàrl-S at a time; requires a natural-person gérant (a S.à r.l. may have a legal-entity gérant since the 2016 reform); accepts incorporation by private deed without a notary; and limits its activity scope to those requiring a business permit under the Law of 2 September 2011.
Can a Sàrl-S be used as a holding company or benefit from the Soparfi tax regime? No. The Sàrl-S's activity scope is restricted to commercial, industrial, artisanal, and certain liberal-profession activities requiring a business permit under the Law of 2 September 2011. Holding-company activity, financial-participation management, banking, and insurance are excluded. Founders who need a holding vehicle must use a standard S.à r.l. or S.A. that can elect into the Soparfi regime.
What happens if a Sàrl-S grows past EUR 12,000 of share capital? The capital ceiling for a Sàrl-S is strictly below EUR 12,000. A Sàrl-S that needs to raise capital above that level must be transformed into a standard S.à r.l. The transformation requires an extraordinary general meeting of the associates, a notarial deed recording the change of form and the new capital, and RCS publication. The transformation is not automatic; it must be organised by the associates, and the company retains its legal personality through the change.
Can a non-resident form a Luxembourg Sàrl-S? Yes. Luxembourg corporate law imposes no nationality or residency condition on the natural-person associates or the natural-person gérant of a Sàrl-S. The company must, however, maintain its registered office in Luxembourg and obtain a Luxembourg business permit (autorisation d'établissement) for its declared activity. The business-permit process imposes its own honourability and professional-qualification conditions.
Does a Sàrl-S need a notary to be formed? No. The Sàrl-S is one of the few Luxembourg commercial forms that may be incorporated by private deed (Art. 720-1 of the 1915 Law as inserted by the Law of 23 July 2016). The associates sign articles of association without a notary; only RCS registration and publication in the RESA are mandatory. Subsequent changes of form, transformation into a standard S.à r.l., or capital increases above EUR 12,000 do require a notarial deed.
Sources
- Law of 23 July 2016 introducing the Sàrl-S and modifying the Law of 10 August 1915, Légilux — Mémorial A-N° 157, 4 August 2016 (doc. parl. n° 6777); in force 16 January 2017
- Law of 10 August 1915 on commercial companies (consolidated text, post-RGD du 5 décembre 2017 renumbering), Légilux — legilux.public.lu/eli/etat/leg/loi/1915/08/10/n1/jo
- Law of 10 August 2016 modernising the 1915 Law, Légilux — legilux.public.lu/eli/etat/leg/loi/2016/08/10/n3/jo
- Law of 2 September 2011 regulating access to the professions of artisan, commerçant, industriel, and certain liberal professions (governing the Sàrl-S activity scope), Légilux
- Grand-Ducal Regulation of 25 October 2024 updating accounting size criteria (implementing EU Directive 2023/2775), Légilux
- Grand-Ducal Regulation of 23 December 2016 on RCS formalities for the Sàrl-S, Légilux
- Bill of Law 8286 (pending) — modernisation of the accounting law and abolition of the commissaire aux comptes, Chamber of Deputies
- Bill of Law 8669 (adopted on first constitutional vote 28 April 2026) — deferred payment of S.à r.l. minimum share capital, Chamber of Deputies; CMS legal update 28 April 2026 (Sàrl-S practical impact limited given EUR 1 minimum)
- PwC Luxembourg Tax Summaries — combined CIT + MBT rate of 23.87% (CIT 16% + 7% solidarity surcharge + MBT 6.75% in Luxembourg-Ville) applicable from 1 January 2025
- Guichet.public.lu — Sàrl-S guide for entrepreneurs (FR and EN versions)
- Registre de Commerce et des Sociétés (LBR) — www.lbr.lu — authoritative source for Luxembourg active and inactive entity counts by legal form
- Practitioner notes consulted: CMS Lexology; RSM Luxembourg; Fiduciaire LPG; Damalion; PCG Lux (firms publishing public guides on the Sàrl-S regime; specific publication dates omitted pending verification per Findings_Log_v1_8.md W-Audit-fabrication)