The bill n°7989 amending the law of 2 September 2011 as amended regulating the access to the professions of craftsman, trader, industrialist and certain liberal professions has been adopted by the Luxembourg Parliament on 20 July 2023 (the « Law »).

It aims to stimulate the regulatory, economic, technical, technological, entrepreneurial and craft environment and shall enter into force on 1 September 2023.

In substance, the main changes introduced by the Law may be summarized as follows :

I. The second chance principle

The purpose of the second chance principle is to facilitate the right to start a second business as soon as possible after bankruptcy. It consists of giving an individual the opportunity to benefit from renewed confidence to start a new business by granting him/her a new authorization to establish despite his/her involvement in a bankruptcy or compulsory liquidation during his/her previous business.

However, the cases of applications for this second chance are limited, since it will only be granted when the bankruptcy was the consequence of misfortune or mismanagement.

II. Protection of any new director taking over the business

The Law also aims to strengthen the protection of any new director taking over the business following a previous malicious director who had manipulated the company’s financial situation to relieve himself/herself of all responsibility for the payment of public debts, as well as to encourage the takeover of companies by providing a response to the problem of the transfer of companies. nnIn this sense, an employee who has held a position in the company for three years (against ten previously) is thus given the possibility of resuming the business permit before acquiring the necessary professional qualifications within a period of five years.

III. Limitation of the amount of business licenses that a person may hold

The number of authorizations that a manager may hold simultaneously within several companies will now vary for certain activities depending on whether or not these companies are related to each other, in order to limit the use of intermediaries in companies that need to rely on specially qualified people to carry out their business.

IV. Temporary business license

A temporary business license can only be granted to a company if the latter has already had a business license for at least 6 months. nCurrently, a temporary business license is granted without the slightest qualification requirement, which is usually justified by the need not to interrupt the activity of the company. nnHowever, a company that needs a manager who’s obtaining a business license requires professional qualifications can abuse the system by having a manager remaining in office for a few weeks. nTo maintain the requirement to promote these professional qualifications and to protect the consumer, access to the temporary business license has been modified.

V. New requirements for the business license holder and real link

The necessary conditions imposed on the manager to obtain a business license allowing him/her to settle on Luxembourg territory have also been modified. nnThe condition according to which the manager must effectively and permanently ensure the management of the company is refined in that it is now specified that the manager can reside anywhere in the European Economic Area provided that he/she demonstrates a regular presence in Luxembourg. nnIn addition, the manager must have a real link with the company by being the owner if he/she exercises his/her activity in his/her personal name or as an agent registered in the Trade and Companies Register if the business is carried-out via a company. It is therefore no longer necessary to be a shareholder, partner or employee of the company. nThe purpose of this simplification is to establish more directly the link between the manager and the company in order to more effectively rule out the use of intermediaries.nnFinally, the applicants will also have to be compliant with their social and tax duties.

VI. New activities falling within the scope of the Law :

    • Short term lease business
    • Real estate business contributors (apporteurs d’affaires immobiliers)
    • Business centers and co-working spaces

Persons falling under the scope of these new activities shall apply within a period of two years starting on 1 September 2023 for a new business license in order to comply with the new provisions of the Law as amended.

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