For Luxembourg, a country with a vibrant corporate sector, international businesses, and strong ties to the European economy, the implementation of this directive is crucial in maintaining its competitive edge in the global market while ensuring a robust legal and regulatory environment.

The law also strengthens the existing framework for internal and non-EEA cross border operations (eg offshore jurisdictions).

The Mobility Directive aims to harmonise EU rules on cross-border business restructurings, enhancing legal certainty and protecting stakeholders. Luxembourg’s implementation introduces:

• A streamlined three-phase process:
  • The preliminary phase in which the proposed common draft terms of the operation will be prepared
  • The approval phase where the operation is submitted to the vote of the shareholders
  • The execution phase
• Enhanced shareholder and creditor rights, including exit rights for dissenting voting shareholders and a mechanism to challenge share exchange ratios
• Employee protections with the need to provide report covering the changes of the employment conditions
• Increased transparency, requiring detailed management reports and allowing stakeholders to submit comments on transactions
• Stronger anti-abuse controls, with notaries verifying legality before approving cross-border transactions

The implementation of the Mobility Directive in Luxembourg strengthens the country’s commitment to maintaining a business-friendly environment while ensuring the protection of stakeholders during cross-border mergers and corporate restructuring. By adopting the changes outlined in the directive, Luxembourg solidifies its position as a leader in corporate governance and financial services within the EU.

As the country moves forward with these reforms, it is well-positioned to continue playing a central role in facilitating corporate growth, investment, and cross-border business activity, contributing to the EU’s broader goals of economic integration and sustainability.

The new law will take effect on the first day of the month following its official publication.