A Luxembourg Non-Profit Organization (Association Sans But Lucratif, A.S.B.L. “Association without lucrative purpose”) is a grouping of natural or legal persons whose goal is to pool activities or resources without deriving any monetary benefit. It is governed by the Law of 21 April 1928 on Non-Profit Organizations and Foundations, as amended. The A.S.B.L. must neither carry out any industrial or commercial operations, nor procure any monetary benefits to its members.
1. How to set up an A.S.B.L.
The constitution of the A.S.B.L. is an easy process, as the association’sstatutes may either be in the form of a simple private agreement, or a notarial deed. They must be registered with the Trade and Companies Registry (“Registre du Commerce et des Sociétés” -R.C.S.) in triplicate, along with a registration form and the list of names of members of the Association.The statutes are subject to publication to the Mémorial C (Recueil des Sociétéset Associations). The A.S.B.L. is granted legal personality from the day its statutes arepublished in the Mémorial C and provided that it respects the conditions set out by the Law of 21 April 1928, which are enumerated hereinafter.
2. Legal Regime
The A.S.B.L. must be constituted with a minimum of three founding members (which may be natural or legal persons -other associations, or companies). Unlike companies, no share capital has to be paid up by the founding members.The statutes of the A.S.B.L. may be drafted freely by the parties, but they mustcontain clauses pertaining notably to the following elements: the name and registered office of the association, its object, the full names as well as professions, domiciles and nationalities of its founders, the membership rules, the powers and convocation procedure of the General Meeting, the method of appointment and powers of the board members, the maximal membership fee, the rules pertaining to the amendment of the statutes.
Luxembourg Non-Profit Organization | Hance Law Firm
The registered office must be located within the Grand-Duchy of Luxembourg. It may only acquire the real property “strictly necessary” for the fulfillment of its objects (under penalty of annulment). Every document (invoices, publications…) made by the association must clearly mention the name of the association, the words “Association Sans But Lucratif” or “A.S.B.L.”, the address of the registered office of the association, as well as its R.C.S. registration number.
The A.S.B.L. may be allocated communal grants by the town in which it has its registered office. There is no obligation for the A.S.B.L. to file annuals accounts with the Trade and Companies Registry, but the publication is mandatory if the association accepts donations of an amount greater than 12.500 euros.
3. Public Utility Status
The A.S.B.L. may be granted the public utility status (“statut d’utilité publique”), if it is constituted for the purpose of carrying out without pecuniary gain to its members, objects of aphilanthropic, religious, scientific, artistic, educational, social, sporting or touristic character.
This status allows the cash donations to the A.S.B.L. to be deductible, and donations in kind to be deductible if they are carried out through the “fonds culturel national” or through the “fonds national de soutien à la production audiovisuelle”. In order to be granted such a status, the A.S.B.L. may ask for its statutes to be approved by Grand-Ducal decree, following the advice of the State Council (Conseil d’Etat).
4. Tax Regime
The A.S.B.L. enjoys a full tax exemption as it does not carry any commercial activity. As such, it is not subject to the corporate income tax. Should the A.S.B.L. be deemed to carry out a commercial or industrial activity, it will be subject to the corporate income tax on the transactions which are qualified as such.As to the donors, donations in cash are tax deductible if they follow these conditions:
* the donation is made for the benefit of an A.S.B.L. which has been granted by the Ministry of Justice the public utility status;
* the donation is limited to 20% of the total net income of the donor, or 1.000.000 euros, and is of a minimum amount of 120 euros.
A specific procedure is set out for donations in kind.
The A.S.B.L.’s services may be exempted from VAT if they are performed by members who pay a membership fee to the association but it is subject to the net wealth tax whether it benefits from the public utility status or not.
5. Liquidation / Winding-up
The A.S.B.L. may be liquidated following a decision taken by the General Meeting. It may request a court-ordered liquidation as well.
For more information on the constitution of an A.S.B.L., please contact Hance Law :
+352 274 404 / [email protected] / www.hance-law.com