The new right of establishment, stimulating the entrepreneurial spirit

  1. (from left to right) Gilles Scholtus, responsible for the General Direction of the Middle Classes; Lex Delles, Minister for the Middle Classes; Dominique Gurov, Legal Department of the General Directorate for the Middle Classes

  2. (from left to right) Lex Delles, Minister for the Middle Classes;  Dominique Gurov, Legal Department of the General Directorate for the Middle Classes

    (from left to right) Lex Delles, Minister for the Middle Classes; Dominique Gurov, Legal Department of the General Directorate for the Middle Classes

  3. Press conference

    Press conference

To achieve this objective, the new right of establishment provides for four main measures:

  • Firstly, the principle of second chance after bankruptcy is implemented. The reform will facilitate the right to start a business a second time with a new business authorization after a bankruptcy in case of bad luck (eg bankruptcy due to the loss of an important customer or following an illness of the company director). company) or mismanagement (eg bankruptcy following a mistake in the company’s strategic choices).
  • Second, access to certain craft professions is simplified. The qualification requirement will be removed for certain activities included in a new C list, such as the profession of photographer, construction technician or sound producer. The reform thus takes into account the new realities of certain professions, whose requirements have evolved, particularly in the context of digitalisation.
  • Third, business transfer is facilitated. An employee who has held a position in a company for three years – compared to ten years before – will be able to resume the business license before acquiring a professional qualification within five years. The reform thus considerably facilitates the transfer of businesses, which is gaining importance in Luxembourg, as it is estimated that a third of businesses will change hands in the next 10 years.
  • Fourth, administrative procedures are simplified. Thus, it will no longer be necessary to communicate directly to the Directorate-General for the Middle Classes any changes to the data entered in the Commercial and Companies Register. The business license in the form of a two-dimensional bar code will allow the Directorate-General for the Middle Classes to directly modify the information included in the business license and offers the advantage of updating the information relating to the establishment authorization in favor of the consumer.

However, the reform of the right of establishment is not limited to stimulating entrepreneurship, but also aims at other concrete objectives, such as the control of money laundering and the financing of terrorism. The reform provides for the exchange of data between the General Directorate for the Middle Classes and all other administrations or authorities involved, such as the manager of the Commercial and Business Register, the Administration of Registries, Domains and VAT or the Common Center for Social Security. The Directorate-General for the Middle Classes will also promptly inform the Financial Intelligence Unit and the Financial Sector Supervision Commission in case of suspected involvement in money laundering or terrorist financing. In addition, specific authorizations will be established for certain commercial activities, such as the sale of cars and high-value goods.

The supervision of short-term rentals is also one of the objectives of the reform of the right of establishment. This reform is intended to be pragmatic, taking into account, on the one hand, the freedom to occasionally rent private accommodation and, on the other hand, taking into account the need to regulate any activity that resembles the operation of accommodation equipment. This will introduce a cumulative threshold of three months over a period of one year since the last rental to transitory customers, after which the accommodation operator must have an operating permit.

Finally, it should be noted that the new right of establishment improves consumer information. The proposed law thus allows real-time access to information relating, in particular, to professional qualifications and the validity of a company’s establishment authorization.

The Minister for the Middle Classes, Lex Delles, indicates that “the reform of the right of establishment will stimulate entrepreneurship and boost the development of the sector of small and medium-sized enterprises. The principle of second chances after bankruptcy, the simplification of access to certain professions crafts, the facilitation of administrative procedures and the simplification of business transfer represent unprecedented opportunities in this context. new models of ‘sharing economy'”.

Communicated by the General Directorate of the Middle Classes

Leave a Comment