On 29 June 2021, the Luxembourg legislator approved amendments to the legal framework that alleviate the auditing obligations for certain SIS. While maintaining the general transparency regime for all Luxembourg SIS, the approved amendments aim to reduce the costs faced by micro-SIS and mid-sized SIS by introducing thresholds below which SIS are not required to have their annual financial report prepared by an independent third party.
The new rules
The following thresholds have been created:
- Micro-SIS with turnover or net assets below EUR 100,000 are not required to have an independent auditor or statutory auditor (commissaire). They must submit a self-assessment to the Minister responsible for the social and solidary economy (économie sociale et solidaire).
- Mid-sized SIS with turnover or net assets between EUR 100,001 and EUR 1,000,000 must appoint a statutory auditor, which will prepare the annual financial report and certify compliance with Luxembourg’s legal framework for SIS.
- For SIS with turnover or net assets exceeding EUR 1,000,001, an independent auditor is required for the preparation of the annual financial report and for certifying compliance with the Luxembourg legal framework for SIS.
Entry into force
The adopted amendments will enter into force on the fourth day following the date of their publication in the Luxembourg Official Journal.
Luxembourg SIS are subject to a specific transparency regime, which includes drawing up an annual financial report certifying compliance with the following:
- the composition of the share capital of the SIS, which must consist of at least 50% impact shares;
- the maximum annual remuneration of any of its employees, which must not exceed a statutory ceiling set at 6 times the national minimum wage;
- the general prohibition on issuing debt instruments and directly or indirectly borrowing from its members.
These transparency obligations previously applied to all Luxembourg SIS regardless of turnover, balance sheet size, number of employees or lifespan. The new rules take into consideration the size of the SIS and its turnover, and are a welcome alleviation of the auditing obligations for micro and mid-sized SIS that align the costs of meeting those obligations with the scale of their economic activity.
For further information, please do not hesitate to contact us.
For a description of Luxembourg’s legal framework for SIS, click here_