SARL-S in Luxembourg: setting up a company with reduced capital

In short. The simplified private limited liability company (SARL-S) is a lighter SARL, built as a tool for immediate access to business. Its capital ranges from 1 € to under 12,000 €, it is formed by private deed (no notary) and stays reserved to natural persons. In return for this flexibility, it is framed: an object limited to craft, commercial, industrial activities and certain liberal professions, one SARL-S per person, and a mandatory switch to another form if the capital exceeds 12,000 €. It is an excellent springboard, provided you know its limits.

Many entrepreneurs hesitate to start because of the 12,000 € capital of a classic SARL and the notary fees. The SARL-S was created precisely to lift that barrier. But its simplicity has a flip side: a strict frame you had better know before signing, not after. Here is what matters, official source in hand.

What is the SARL-S, and how does it differ from the SARL?

The SARL-S is a simplified variant of the SARL, introduced to encourage entrepreneurship. It keeps the SARL's main advantage, liability limited to the contributions, but departs from several rules to lower the barrier to entry.

Two differences stand out. First the capital: where the SARL requires 12,000 €, the SARL-S settles for capital between 1 € and under 12,000 €. Then the formation: the SARL-S can be created by private deed, based on model articles provided by the Trade and Companies Register (RCS), without a notary. These two easings cut both the cost and the launch time.

In exchange, the SARL-S accepts a narrower scope than its big sister. To understand when the classic SARL remains preferable, see our full guide to setting up a SARL in Luxembourg: the two forms answer different situations.

Who can set up a SARL-S?

This is the first rule to check, because it rules out certain projects from the start. The SARL-S is reserved to natural persons. A company can never be a shareholder. If your structure involves a holding or another company in the capital, the SARL-S is excluded, you need a classic SARL.

Another specific limit: a natural person can be a shareholder of only one SARL-S at a time, unless the shares are transferred to them on death. They can, however, be a shareholder of a SARL-S and of a company of another form at the same time (a classic SARL, an SA). Like the SARL, the SARL-S holds from 1 to 100 shareholders, and its manager must be a natural person, shareholder or not.

On activity, the object of a SARL-S is limited to craft, commercial and industrial professions, plus certain liberal professions. Financial, holding and insurance activities are excluded. And like any commercial company, it requires a business permit, to include in the RCS registration file.

Not sure your activity fits the SARL-S frame? The choice between SARL-S and classic SARL drives your fees, your banking credibility and your growth options. Advena helps you decide before you sign. Book a 30-minute call.

SARL-S capital: 1 €, but with nuances

The share capital of a SARL-S ranges from 1 € to under 12,000 €. It must be fully subscribed and, under the reference rule, fully paid up at incorporation. Contributions take the form of cash or contributions in kind.

One current point deserves attention. The reform adopted by the Chamber of Deputies on 28 April 2026 (bill no. 8669) on deferred paying-up of capital covers both the SARL and the SARL-S: for cash contributions, the capital may be paid up on a deferred basis, within up to 12 months. At the time of writing (June 2026), confirm the entry-into-force date applicable to your incorporation.

But do not mistake the debate: capital of 1 € is legally possible, rarely advisable. A company with no equity inspires little confidence in a bank, a landlord or a supplier, and is left fragile at the first cash-flow hiccup. The SARL-S lowers the legal obstacle, not the real need to capitalise your activity to some minimum. Set the capital on your need, not on the floor.

Setting up a SARL-S, step by step

The procedure is lighter than for a SARL, but it stays rigorous.

1. Apply for the business permit with the Ministry of the Economy, based on the manager's qualification and good standing. It conditions trading and appears in the registration file.
2. Check the name's availability with the RCS. The name must be distinct from any existing company and followed by the mention SARL-S on the company's documents.
3. Draft the articles by private deed, using the RCS model articles. No notary required, which cuts the expense.
4. Constitute the capital (between 1 € and under 12,000 €), subscribed and paid up under the rules in force at incorporation.
5. Register with the RCS, with publication in the Electronic Compendium of Companies and Associations (RESA). The registration states, among other things, the identity of the shareholders and the business-permit number.
6. Register for VAT and affiliate the manager with social security (CCSS).

The notary saving is real, but it does not remove the need to think about the articles: the models cover the standard case, not specific clauses (share transfers, management, allocation of powers). On these points, an informed eye prevents future deadlocks between shareholders.

The limits to know before you start

The SARL-S is a starting point, not a final destination. Two thresholds trigger a mandatory change of legal form:

• Capital. If it exceeds 12,000 €, the company must convert, in practice into a classic SARL.
• Number of shareholders. If it exceeds 100, the SARL-S has one year to change form.

Beyond these thresholds, keep in mind that the SARL-S remains a full commercial company: it keeps accounts compliant with the standardised chart (PCN 2020), files its annual accounts with the RCS within 7 months of the close, and reports its VAT on a frequency tied to its turnover (annual return below 112,000 € of turnover excluding VAT, quarterly up to 620,000 €, monthly beyond). The simplicity of formation does not simplify the management that follows.

Who is the SARL-S a good fit for?

The SARL-S suits the sole trader, the craftsperson or the merchant who wants to test or launch an activity with a limited starting investment, without tying up 12,000 € or paying a notary. It is a start-up format, ideal for moving from project to real activity quickly.

It fits less if you aim straight for strong banking credibility, if you plan corporate shareholders, or if your activity falls into the excluded sectors. In those cases, the classic SARL is better suited from the start, and avoids a conversion in short order. The right reflex is not to pick the cheapest form, but the one that matches your trajectory over two or three years.

Once the company is created, the real subject becomes management: invoicing, VAT, accounting. This is the moment to lay sound foundations with Luxembourg accounting properly configured in Odoo, rather than catching up the gaps at the first closing.

Frequently asked questions

Can you really set up a company for 1 € in Luxembourg?

Yes, via the SARL-S, whose capital can be set from 1 €. It is legally possible but rarely relevant: very low capital weakens the company and harms its credibility with banks and partners.

Do you need a notary for a SARL-S?

No. The SARL-S is formed by private deed, based on the RCS model articles. It is one of its main savings compared with the classic SARL.

Can a company be a shareholder of a SARL-S?

No. The SARL-S is reserved to natural persons. If you need a corporate shareholder (a holding, for example), you must opt for a classic SARL.

What happens if my business grows?

If the capital exceeds 12,000 € or the number of shareholders 100, the SARL-S must convert to another form, in practice a classic SARL. It is a planned evolution, not an accident.

Can a cross-border worker set up a SARL-S?

Yes, as long as it is a natural person meeting the business-permit conditions (qualification, good standing). Residence abroad is not an obstacle in itself, but the company must have real substance in Luxembourg.

In practice: SARL-S or SARL?

Ask yourself three questions before choosing. Do you need a corporate shareholder? If so, it is a SARL. Is your activity among the sectors allowed for the SARL-S? If not, it is a SARL. And where will you be in two years: if you expect growth that will quickly break the 12,000 € ceiling, you may as well start directly on the classic form. The SARL-S is an excellent springboard to start light; it is not always the right base to last.

Why Advena?

• Formation, finance and digital under one roof: we set the legal form, the accounting and the management tool together.
• Luxembourg grounding: business permit, RCS, PCN 2020 and VAT handled with real local knowledge.
• Clear fixed prices, no hourly billing: you know what you pay before you start.
• Direct access to the founders: the partners support you, not a junior.

Read next: Setting up a SARL in Luxembourg: steps, capital and procedures · Setting up Luxembourg accounting in Odoo.