The social impact company (SIS) in Luxembourg
Published on 10 October 2026 · Updated on 10 October 2026
In short
In Luxembourg, a social impact company (SIS) is not a legal form but an approval created by the law of 12 December 2016. The minister responsible for the social and solidarity economy grants it to an SA, SARL, SARL-S or cooperative that pursues a measurable social objective and whose capital is at least 50% impact shares.
Definition
The SIS (social impact company) is an approved commercial company that carries on a continuous economic activity in the service of a social objective, measured by performance indicators set out in its articles, and whose profits are primarily reinvested in that objective.
The SIS at a glance
- Legal basis
- Amended law of 12 December 2016
- Eligible forms
- SA, SARL, SARL-S, cooperative
- Impact shares
- At least 50% of capital
- Maximum pay
- 6 times the annual social minimum wage
Conditions for approval
- A continuous economic activity of production, distribution or exchange of goods or services.
- A corporate purpose that supports vulnerable people, or contributes to a societal cause: social ties, reduced inequality, the environment, culture, training, among others.
- Performance indicators written into the articles to measure impact.
- At least 50% of capital in impact shares, with no right to dividends; yield shares are remunerated only if the social objective is met.
- Autonomous management, no borrowing from shareholders and annual pay capped at six times the social minimum wage.
Setting up an SIS
- 1
Define the impact
Form, corporate purpose, performance indicators, split between impact shares and yield shares.
businessregistration.lu - 2
Articles
A partner lawyer drafts articles compatible with the 2016 law.
Partner lawyer - 3
Approval file
Application form, sworn statement and statement on key persons, with supporting documents.
Founders - 4
Approval
Review and decision by the minister responsible for the social and solidarity economy.
Ministry - 5
Incorporation and RCS
Deed in the chosen form, registration with the SIS mention and the approval reference, RBE declaration.
Notary depending on the form, LBR
Tax advantages: only at 100% impact shares
According to Guichet.lu, the exemption from corporate income tax, municipal business tax and net wealth tax applies only to an SIS whose capital is 100% impact shares. An SIS that issues yield shares has no tax advantage. Any change to the articles requires the minister’s prior approval, and failure to meet the conditions can lead to withdrawal of the approval.
Annual obligations
Each year, the SIS prepares a financial report certifying compliance with the legal conditions and a non-financial report on its impact indicators. The financial report is prepared by an approved statutory auditor above €1 million of turnover or balance sheet total, by an auditor (commissaire aux comptes) between €100,001 and €1 million, and by the SIS itself below that. Both reports are sent to the minister within two weeks of the meeting.
For a project without commercial activity, see forming a non-profit; for a collective project, the cooperative society.
Next step
Set up your social impact company
We coordinate the incorporation, the partner lawyer and the approval file. Written quote.
Frequently asked questions
Is the SIS a separate legal form?
No. The SIS is an approval granted to an existing company, or one being formed, as an SA, SARL, SARL-S or cooperative society. The company keeps the rules of its form, supplemented by those of the law of 12 December 2016.
What is an impact share?
It is a registered share that carries no right to dividends and cannot be converted into a yield share. The profits attached to it are reinvested in the activity. Impact shares represent at least half of the capital.
Can an SIS pay dividends?
Yes, on yield shares only, and only if the social objective measured by the performance indicators is met. Yield shares cannot exceed 50% of the capital.
Who grants SIS approval?
The minister responsible for the social and solidarity economy. The file includes the application form, the articles, a sworn statement and a statement on key persons.
Is an SIS exempt from tax?
Only if 100% of its capital is impact shares. In that case, Guichet.lu mentions an exemption from corporate income tax, municipal business tax and net wealth tax. Have your situation validated by a tax adviser.