EU Mobility Directive Luxembourg: Milestone for cross-border corporate transactions

With a new law, Luxembourg is improving corporate mobility. This is a milestone in Luxembourg company law and strengthens the country’s position as a hub for cross-border corporate transactions. The Ecovis consultants explain the changes.

On 23 January 2025, with a two-year delay, the Luxembourg Parliament passed a new law to implement Directive (EU) 2019/2121 amending Directive (EU) 2017/1132 on cross-border conversions, mergers and divisions (the Mobility Directive).

Key legislative changes

The law modifies two key Luxembourg statutes:

• The amended law of 10 August 1915 on commercial companies
• The amended law of 19 December 2002 on the trade and company register, accounting and financial statements

By implementing the Mobility Directive, Luxembourg is introducing a harmonised framework for cross-border transactions while ensuring robust stakeholder protection and legal certainty.

Introduction of a dual-regime system

The new law establishes two distinct regulatory regimes:

1. General regime – Governs domestic mergers, divisions and conversions, as well as cross-border transactions involving non-EU Member States or non-standard Luxembourg legal entities.
2. Specific regime – Applies to intra-EU cross-border mergers, divisions, and conversions involving Luxembourg companies structured as a société anonyme (SA), société à responsabilité limitée (SARL), or société en commandite par actions (SCA).

This structured approach enhances legal clarity while allowing continued flexibility for companies engaged in cross-border transactions beyond the EU.

Companies should work with an experienced auditing and consulting firm to implement the new laws.

Arnaud Yamalian, Managing Director, Approved Statutory Auditor, ECOVIS IFG Audit SA, Luxembourg

Key features and benefits

1. Expanded scope for cross-border transactions Previously, only cross-border mergers had a unified legal framework within the EU. The new law extends this harmonisation to cross-border conversions and divisions, making Luxembourg an even more attractive jurisdiction for business mobility.
2. Strengthened stakeholder protections
   1. Shareholders: Minority shareholders now have the right to withdraw under specific conditions, ensuring fair treatment.
   2. Creditors: Enhanced safeguards mitigate risks for creditors during cross-border restructurings.
   3. Employees: Improved consultation and participation rights strengthen the position of employees.
3. Introduction of a double control of legality Luxembourg notaries play a pivotal role in verifying compliance, ensuring fraud prevention, and overseeing the legality of transactions at both the departure and destination stages.

Challenges and future developments

Luxembourg’s delayed implementation of the Mobility Directive (originally due by 31 January 2023) highlights the complexity of aligning national laws with EU mandates. Despite the added administrative requirements, the law ensures increased legal certainty for companies. The pending adoption of Bill No. 8225 to amend the Labour Code will further refine the employment law aspects of the directive, providing additional clarity on workers’ rights and participation.

Conclusion

The implementation of the Mobility Directive represents a major step forward for Luxembourg’s corporate landscape, solidifying its reputation as a prime jurisdiction for cross-border corporate restructurings. Companies planning mobility transactions should proactively assess their compliance with the new legal requirements and engage with stakeholders to ensure smooth execution.

For further information please contact:

Arnaud Yamalian, Managing Director, Approved Statutory Auditor, ECOVIS IFG Audit SA, Luxembourg
Email: arnaud.yamalian@ecovis-audit.lu