Associations (ASBL)

What is a non-profit association (ASBL)?

A non-profit association (ASBL) is a group of individuals or an entity who work together towards a public-interest goal. The members of the association may not receive earnings from the non-profit association's activity.

A Luxembourg ASBL must consist of at least three people. Foreign citizens may also be members.

Non-profit associations are governed by the law of 21 April 1928 and must be registered with the Luxembourg Trade and Companies Register (RCS).

To find out about changes that entered into force in 2008, please consult the following laws:

• Law of 19 December 2008, memorial no. 198 (direct taxes)
• Law of 19 December 2008, memorial no. 207 (indirect taxes)

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Why form an ASBL?

The decision to form an ASBL is first and foremost dictated by questions of legal security. An ASBL creates a formal distinction between the resources and responsibilities of the association and its members.

 

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Process of Formation

1. Preparing the articles of association
The articles of association must include the following information:

• The name of the ASBL and headquarters (which must be based in Luxembourg)
• Purpose(s) / Goal(s)
• Minimum number of members (greater than or equal to 3)
• Name, profession, residence and nationality of the members
• Member admission and exit criteria
• Responsibilities, notices and communication of the resolutions proposed by the Board to the Annual General Meeting
• Appointment and powers of the trustees
• Maximum level of contributions
• Account regulations
• Rules for the amendment of articles of association
• Provisions for the dissolution of the entity (assets)

> Model articles of association (in French)

2. Articles of association (private agreement) are signed by the founding members (or before a notary: formal agreement)

3. Registration
The articles of association are filed with the Luxembourg Trade and Companies Register (RCS) and should include the name, profession and residence of the appointed trustees (in compliance with the articles of association) and the address of the ASBL's headquarters. (Any amendment must be notified to the RCS)

Please note: The ASBL must register with the RCS even if it does not engage in commercial activities.

> The detailed formalities of the RCS (available in French and German)

 

4. The articles of association are published in "Mémorial C" (special compendium of companies and associations)

The legal personality (legally recognised and protected) of the ASBL is acquired as soon as the articles of association are published.

 

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Declaratory obligations

• Annual General Meeting (ordinary/annual): All members are invited.
  An annual general meeting (ordinary or extraordinary) is mandatory for the following decisions:  amendments to the articles of association, appointment and termination of appointment of trustees, budget and account approval, dissolution.
  
• Amendment of articles of association: "Mémorial C" (within the month following amendment)
  
• List of members: RCS (1 month following the end of the accounting year unless stipulated otherwise in the articles of association)
  
• Balance sheet of accounts (only for public utility foundations): "Mémorial C" (within the month following the end of the fiscal year)
  
• All agreements, invoices, legal announcements and any other documents published by the ASBL must include the following items: the name of the ASBL followed by "a.s.b.l.", the headquarters, and "RCS Luxembourg" followed by its registration number.

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Scope of the ASBL's activities

• The ASBL may only acquire property for the purpose of its business.
  (The association is not authorised to acquire property with the aim of letting it out (unless it is related to the goal of the association), even if the income from the lease is used to support the association's philanthropic cause.)
  
• Any amendment to the articles of association shall be considered as an "extraordinary decision" governed by the provisions relating to quorums and specific majorities defined by the articles of association.
  
• The ability of the association to receive tax-deductible donations is only authorised for State-approved ASBLs. 

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How to obtain state approval

The authorisation process is managed by 2 government departments:

• Minstry of Justice, for the formal instruction of the application
• Minstry of Finances, for fiscal aspects

Following the obligatory consultation by the Ministries with the Council of State, after which the Council of State gives its opinion, a Grand Ducal decree is drawn up. (This takes a minimum of 6 months depending on the number of applications being dealt with)

State-approved ASBLs must present their annual financial statement to the Ministry of Justice.

 

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Tax / fiscal aspects

There are three aspects to be taken into consideration:

• IRC tax (corporation tax)
• VAT no.
• Other taxes (local taxes, property tax, wealth tax)

For more information, please contact us at:
philanthropie@bdl.lu

 

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Foundations

What is a foundation?

Foundations are organisations that use income from their initial capital to fulfil philanthropic, religious, social, scientific, artistic, educational, sports-related or touristic aims.

There are three types of foundations:

• Private foundations (this type does not exist in Luxembourg)
• Public utility foundation
• Umbrella foundation formed with Fondation de Luxembourg

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Specific conditions for public utility foundations

In addition to the conditions described above relating to the formation of an ASBL, foundations must also comply with the following:

• Foundations are formed on the authorisation of a Grand Ducal decree which confers legal personality on the entity. The registration process requires a deed executed by a notary before the Ministry of Justice, which decides on whether the foundation can be approved. (Articles 27 and the amended law of 21 April 1928 on non-profit associations and foundations)
  
• In this regard, an application must be sent to the Ministry of Justice with the aim of checking compliance of the foundation's articles of association with Foundation law (starting with article 27 and up of the law of 21 April 1928) and to receive the opinion of the Ministry of Finances.
  
• Any further amendment to the foundation's articles of association must be approved by Grand Ducal decree.
  
• Foundations are required to provide their annual accounts and budget to the Ministry of Justice within two months of the end of the accounting year  (in accordance with article 34 of the law of 21 April 1928).