On 4 April 2025, the Government Council approved draft law n°8526 introducing a new tax credit to encourage individuals to invest in young innovative companies. The aim of this draft law is to make Luxembourg’s ecosystem more attractive for young innovative companies by improving their access to financing during the early stages of the companies' existence. This new start-up tax credit would apply as from the 2026 tax year.
In order to increase the diversification and competitiveness across Luxembourg’s economy, the start-up tax credit intends to encourage individuals to invest in young innovative companies.
To benefit from the start-up tax credit, the investor must be a tax resident or non-resident individual who invests in and holds, for an uninterrupted period of a minimum of three years, shares directly in a company qualifying as a start-up entity.
In this article, our Tax Partner, Christina Leomy-Voigt and our Chief Knowledge Officer, Marie Bentley explain the conditions that must be fulfilled by both the investors and the start-up entities to benefit from the start-up tax credit, as well as the rules governing the determination of the start-up tax credit amount.