Simplified Liquidation in Luxembourg: Fast-Track Procedure

Eligibility conditions

• All partners/shareholders agree to dissolution and liquidation
• The company has no debts to third parties (or all debts have been settled)
• All assets have been realised or can be distributed in kind among the partners
• No ongoing disputes or pending litigation
• Annual accounts are up to date and filed with the RCS
• Tax returns are up to date and no tax arrears are owed

Procedure flow

The extraordinary general meeting simultaneously pronounces dissolution, closure of liquidation, and discharge of the manager/director and the liquidator (most often a partner). The notarial deed is published in RESA and the company is deregistered from the RCS. In practice, the notary requires a liquidation balance sheet (verifying the absence of debts), a tax compliance certificate from the ACD, and a CCSS discharge confirming the absence of social contribution arrears.

Tax treatment of liquidation

Upon liquidation, a liquidation bonus (excess of net assets over subscribed capital) is distributed to partners. This bonus is treated as a dividend and subject to a 15% withholding tax (unless exempt under a treaty or the parent-subsidiary regime). The company must file a final tax return covering the period from January 1 to the date of dissolution. Any latent capital gains on assets are taxable at the liquidation date.