Economy minister Lex Delles set out the establishment-law reform at a press conference on Thursday afternoon, after the bill was presented to MPs earlier the same day and as his ministry reported an 18% rise in new business creations in 2025.

“The 2025 assessment confirms that the desire to start a business remains strong in Luxembourg,” Delles said.

The ministry received 12,562 requests for establishment authorisations in 2025, almost unchanged from 12,578 in 2024. But new creations rose from 5,741 to 6,815, an increase the government linked in particular to some commercial activities and craft trades on list C.

Delles called the rise “an encouraging signal”, particularly in an economic context that remained demanding.

The draft law was filed in Luxembourg’s parliament on 3 June and presented to the Economy, SMEs, Energy, Space and Tourism Committee on Thursday morning, where DP MP Carole Hartmann was named rapporteur. Its central move is to split the establishment regime between activities that still need prior authorisation and those that could begin once the entrepreneur receives a notification number.

A faster number

The notification route would apply to activities that do not require professional qualifications, do not need a specific training certificate and do not raise particular anti-money laundering or counter-terrorist financing concerns.

The new route is more than a receipt system. The notification number would have the same value as a definitive establishment authorisation while the administration completes its review.

That would allow an entrepreneur to start operating once the number is issued, with checks on professional integrity and establishment carried out afterwards. Activities with higher regulatory or public-risk requirements would remain under prior authorisation, including areas involving qualifications, training or financial-crime controls.

“Our role is to offer entrepreneurs a framework that is simple, predictable and fair,” Delles said, while maintaining checks needed to protect trust in the market.

Presence and control

The bill would also change how companies meet the physical-presence requirement for managers.

For the activities concerned, a company could appoint an authorised representative to ensure a permanent presence at the establishment when the manager cannot do so personally. The explanatory notes say this would not transfer responsibility from the manager, who would remain responsible for the establishment authorisation, public debts and any bankruptcy.

Hartmann said the change followed exchanges with the European Commission, which had challenged Luxembourg’s requirement that the company manager be located in the country.

The arrangement is meant to preserve a form of local presence without breaching EU single-market rules, she said.

The reform also replaces references to majority shareholders with identified beneficial owners, widening the people who can be checked where public debts or influence over the business are relevant.

A second chance

The bill would recalibrate the “second chance” mechanism introduced in 2023 for entrepreneurs who have gone through a business failure and want to restart.

Hartmann said the mechanism had not yet been used because its conditions were too strict.

“If you want a second chance, you need a procedure that makes the second chance possible,” Hartmann said.

The government says the current 1% threshold for some VAT and direct-tax debts has proved too low and insufficiently proportionate. It wants to replace it with thresholds of 25% of net amounts paid over the previous five financial years in voluntary bankruptcy cases, and 15% in bankruptcy on summons or judicial liquidation.

For social-security contributions, the threshold would be four months of contributions, based on the monthly average over the previous 24 months.

Hartmann said MPs spent more time on the second-chance thresholds and the manager-presence rule than on other parts of the bill during Thursday morning’s committee discussion.

Delles said the reform would reduce delays and paperwork for low-risk activities “without giving up the essential checks”. It would also adapt the second-chance mechanism, he said, so that entrepreneurs who had experienced failure could restart.

Bankruptcy signal

The reform comes as the 2025 figures show a further, if modest, increase in authorisations invalidated after bankruptcy.

There were 842 invalidations for bankruptcy in 2025, up from 819 a year earlier. Commerce accounted for the largest number, at 543, followed by crafts at 272.

The share of authorisations granted slipped from 87.2% in 2024 to 85.7%, while refusals rose from 12.8% to 14.3%. Average processing time increased from 6.18 days in 2024 to 6.62 days, though it remained below the 8.6 days recorded in 2021.

Requests from foreign providers seeking certificates for occasional craft services in Luxembourg fell from 4,335 in 2024 to 4,258 in 2025. The ministry said this was the lowest level since 2016 and could be linked to the slowdown in parts of the construction sector.

Delles said the aim was “a simpler, more proportionate establishment law” better suited to entrepreneurs’ daily realities.