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Buying Shares in a Company in Luxembourg

Buying Shares in a Company in Luxembourg

Foreign investors have several choices when it comes to becoming owners of a Luxembourg company. They can register a new company with the Luxembourg Trade Register or they can buy shares in an existing company. No matter their choice, each procedure has its advantages. Registering a new company is fast and simple, while share purchases imply agreeing on the terms of the transaction and signing the share-purchase agreement.

For information about the legal requirements to open a company in the Grand Duchy, you may refer to our Luxembourg law firm.

How to buy shares in a Luxembourg company

Foreign investors should know they can buy shares in private and public companies in Luxembourg. However, the share purchase procedures are different for each type of company. Buying shares in private company implies the transfer of the shares to the buy by preparing and signing a share-purchase contract. The main advantage of buying shares in a private company in Luxembourg is that the buyer will acquire the company with all of its assets. Auction share purchases are also possible in Luxembourg, especially in cross-border transactions, however this procedure is seldom employed.

It must be noted that during negotiations, the representatives of the company selling the shares could request the signing of non-disclosure agreements during negotiations. Also, in order to be completed, share purchases must be approved by the Financial Regulator. Buyers may also request for all parties with financial or non-financial interests in the company to approve the transaction.

Documents related to share purchases in a Luxembourg company

The most important documents to be prepared when buying shares in a company in Luxembourg are:

  • –          a confidentiality contract, which is drafted by the seller;
  • –          a letter of intent prepared by the potential buyer;
  • –          a company due diligence report;
  • –          a disclosure statement drafted by the seller;
  • –          the purchase contract prepared by the buyer.

The share-purchase agreement will be drafted in accordance with the Luxembourg Civil Law and can be amended during the negotiations.

The video below shows how to purchase shares in a company in Luxembourg:

Our lawyers in Luxembourg can assist you when buying shares in a Luxembourg company. You can also contact us if you want to set up a new business in the Grand Duchy.