LUXEMBOURG Law and Practice Contributed by: Marcus Peter and Kate Yu Rao, GSK Stockmann SA
3.2 Significant Changes to Takeover Law See 2.4 Antitrust Regulations with regard to the pub - lic consultation on the possible implementation of a merger control regime in Luxembourg. Outside of this, there have been no notable changes to takeover law. 4. Stakebuilding 4.1 Principal Stakebuilding Strategies The bidder does not normally build a stake in the tar - get or have control over the target company during the process as the bidders prefer to avoid such risk in case the final offer fails or the investment loses its value. Building a stake in a target company is, however, possible subject to certain requirements, namely that such purchases are not trying to circumvent provi - sions that require transparency in the process. 4.2 Material Shareholding Disclosure Threshold The Law of 11 January 2008 on transparency require - ments for issuers (the “Transparency Law”) provides that securities holders that acquire or sell securities must notify the target company of the percentage of voting rights they reach following a purchase or a sale of securities, whenever the percentage exceeds or falls below any of the following thresholds: 5%, 10%, 15%, 20%, 25%, 33.33%, 50% and 66.66%. The holder of securities must also notify the target com - pany of the percentage of voting rights if it reaches, exceeds or falls below any of the above-mentioned thresholds following a change in the number of voting rights in the company. The thresholds are calculated based on the aggregate number of outstanding shares with voting rights in the target company, including those whose voting rights are suspended. 4.3 Hurdles to Stakebuilding In addition to the disclosure requirements mentioned in 4.2 Material Shareholding Disclosure Threshold , the target company’s articles of association may contain additional disclosure requirements. In such a case, these notifications must be sent to the target
tions on Foreign Investments have an impact on M&A transactions. Deferred Payment of Share Capital On 16 December 2025, the Luxembourg govern - ment introduced a draft bill No 8669 (the “8669 Bill”) amending the Corporate Law to increase flexibility in the paying-up of the minimum share capital of a pri - vate limited liability company ( société à responsabilité limitée S.à r.l.). While the share capital would still need to be fully subscribed at incorporation, the payment of cash contributions could be deferred for up to 12 months, subject to the terms set out in the articles of association. The 8669 Bill, currently under review by the Chamber of Deputies and the Council of State, aims to facilitate faster company formations, in par - ticular where the opening of bank accounts or related funding formalities may cause delays. New Carried-Interest Regime On 22 January 2026, Luxembourg’s Parliament approved bill No 8590, introducing a new carried inter - est regime designed to provide a clearer and more competitive tax framework. The law was formally promulgated on 3 February 2026 after the Council of State granted the waiver of the second constitu - tional vote. The new regime distinguishes between (i) contractual carried interest, not linked to a direct or indirect participation in the fund, which is taxed as extraordinary miscellaneous income at one-quarter of the applicable progressive individual income tax rate, and (ii) equity-linked carried interest, connected to an actual participation in the fund, which may ben - efit from capital gains tax treatment, and potentially from applicable exemptions, subject to certain con - ditions. Eligibility is limited to (i) natural persons per - forming management functions as employees, part - ners, managers or directors of alternative investment funds (AIFs), alternative investment fund managers (AIFMs) or management companies, and (ii) natural persons effectively involved in the management of an AIF under a services agreement, whether entered into directly or through one or more intermediary enti - ties. Purely administrative or support functions are expressly excluded from the scope of the regime.
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