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Industry Updates

COVID-19 Luxembourg Update: Exceptional Measures Applicable to Companies

30 Mar 2020

The Luxembourg Government has declared a state of emergency in accordance with Article 32(4) of the Luxembourg Constitution. This declaration allows the government the possibility to implement emergency measures in order to manage the extraordinary circumstances by means of certain special measures.

Exceptional temporary measures were introduced on 20 March 20201 to maintain and facilitate the good governance of Luxembourg companies, notwithstanding the challenges caused by the COVID-19 pandemic and while respecting social distancing protocols. All the measures apply with immediate effect to all types of Luxembourg companies.

Meetings of Management Bodies and Shareholders

To prevent the spread of the virus, the governing bodies of any Luxembourg company are allowed, notwithstanding any provision to the contrary in the articles of association, to hold their meetings, in particular meetings of shareholders and boards of directors / managers, without requiring the physical presence of their members.

Board Meetings

Meetings of boards of directors, boards of managers, supervisory boards or other corporate bodies of a Luxembourg company may be held and / or resolutions adopted, even if the articles of association of the company determine otherwise, by way of:

(a) written circular resolutions; or

(b) video conference or other telecommunication means permitting the identification of the members of the corporate body participating in the meeting.

In accordance with the Grand-Ducal Regulation of 20 March 2020, members participating by such means are deemed present for purposes of the calculation of both quorum and majority. Consequently, and notwithstanding any provision to the contrary in the Law of 10 August 1915 on commercial companies, as amended from time to time (the "1915 Law"), or in the constitutional documents, resolutions taken by means of written circular resolutions will not be subject to a requirement for unanimous consent, and the same majority rules as for a regular (physical) board meeting shall apply.

General Meetings

Any Luxembourg company may hold any general meeting without a physical meeting, and require its shareholders / partners / bondholders and other participants to attend the meeting and exercise their rights exclusively:

(a) by a vote in writing or in electronic format, provided that the full text of the resolutions to be taken has been published or otherwise provided to the participants;

(b) through a special proxy holder designated and appointed by the company; or

(c) by video conference or other telecommunication means permitting the identification of the participants to the meeting.

These measures apply regardless of (i) any provisions to the contrary in the articles of association of the company and (ii) the number of participants. In accordance with the Grand-Ducal Regulation of 20 March 2020, members participating by such means are deemed present for purposes of the calculation of both quorum and majority.

It is important to note that the quorum and majority requirements provided for by the 1915 Law and the articles of association remain fully applicable and that these measures only affect the manner in which votes may be expressed at general meetings.

Annual General Meetings

Any Luxembourg company may, notwithstanding any provision to the contrary in its articles of association, convene its annual general meeting so that it occurs within the latter of the following two date ranges:

(a) a date falling within six months after the end of its financial year; or

(b) a date falling within a period ending 30 June 2020.

Each company is authorised to take this decision for any meeting to be convened up to 30 June 2020. Any company that has already convened its annual general meeting and wishes to avail itself of these measures and takes a decision accordingly, is obliged to publish the decision and to notify its shareholders / partners or other participants in the form in which it had convened such meeting, or by publication on its website, in each case no later than three business days before the (originally convened) meeting.

Filing of Annual Accounts

In addition to the increased flexibility in relation to the annual general meeting, the usual surcharge for the late filing of annual accounts has been suspended for an additional four months. For example, a company with a financial year-end of 31 December 2019 would usually have until 31 July 2020 to file its accounts at the standard rate fee of EUR 19, after which steadily increasing late fees would apply. This standard rate fee will now apply, on an exceptional basis, up to and including 30 November 2020.

Execution of Documentation and Use of Electronic Signatures

Under the current circumstances, it may be challenging to sign and exchange documents in original ("wet ink") form. Thus, the use of electronic signatures can be a potential alternative for the execution of all types of documents, although this is not possible with acts / documents / deeds that require notarisation in Luxembourg.

Characteristics of an Electronic Signature

An electronic signature is an electronic protocol established between two parties communicating through electronic means to:

(a) ensure the identity of the interlocutor;

(b) demonstrate the desire to conclude a legal act;

(c) guarantee the integrity of an act concluded online; and

(d) ensure the parties will not be able to reject the agreement (non-repudiation).

It is not to be confused with an electronic seal (cachet électronique), which is used to guarantee the authenticity and integrity of documents issued by legal entities only.

European Regulation & Different Types of Electronic Signatures

Section 4 of Regulation (EU) n°910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC. The eIDAS Regulation ("eIDAS Regulation") is dedicated to electronic signatures. The aim of the eIDAS Regulation is to ensure secure electronic identification and authentication and mutual recognition regarding electronic transactions within the European Union ("EU").

There are three types of electronic signatures that are provided for under Article 3 of the eIDAS Regulation:

(a) 'electronic signature' means data in electronic form, which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign;

(b) 'advanced electronic signature' means an electronic signature which meets the following requirements as set out in Article 26 of the eIDAS Regulation:

(i) it is uniquely linked to the signatory;

(ii) it is capable of identifying the signatory;

(iii) it is created using electronic signature creation data that the signatory can, with a high level of confidence, use under its sole control; and

(iv) it is linked to the data signed therewith in such a manner that any subsequent change in the data is detectable.

These signatures are based on a Public Key Infrastructure2  ("PKI") which allows a certification of the signatory’s identity (through a personal digital certificate) and of the integrity of the document by a certification authority; and

(c) 'qualified electronic signature' means an advanced electronic signature that is created by a qualified electronic signature creation device, and which is based on a qualified certificate for electronic signatures issued by officially approved certification providers.

Article 25 of the eIDAS Regulation sets out the legal effects of electronic signatures:

(a) an electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or that it does not meet the requirements for qualified electronic signatures;

(b) a qualified electronic signature shall have the equivalent legal effect of a handwritten signature; and

(c) a qualified electronic signature based on a qualified certificate issued in one Member State shall be recognised as a qualified electronic signature in all other Member States.

Comparison & Application in Luxembourg

The type of electronic signatures, which may be acceptable, depends on the circumstances, the type of transaction and the level of comfort required by the parties involved.

Documents Signed with Simple Electronic Signatures

Simple electronic signatures represent the minimal level of security. In practice, a simple electronic signature can take the form of a scan of the handwritten signature or a box to tick. It does not offer any real guarantee and therefore has very little probative value.

Therefore, it is strongly advised to use this type of electronic signature only in the context of intragroup transactions where no legal challenge whatsoever between the parties is expected to arise. It is also recommended to obtain further confirmation (for example by means of email confirmation) from the signatory.

If the signature of the documents executed with simple electronic signature is challenged, the burden of proof must be borne by the party relying on the authenticity of the signature. It is therefore always recommended that the parties (i) agree in writing (for example, by email) on the documentation to be executed by means of simple electronic signatures and/or (ii) have the documentation signed in original form afterwards.

Document Signed with Advanced Electronic Signatures

This type of signature uses a certain number of safety mechanisms to ensure the validity of the act. However, there is no presumed equivalence with a handwritten signature.

As is the case for simple electronic signatures, the party that relies on the validity of the signature will carry the burden of proof and will have to rely on a body of corroborating evidence. The use of an advanced electronic signature simply facilitates the provision of such evidence. As a consequence, the same recommendations that apply in the context of the simple electronic signatures must be applied for reasons of security.

Documents Signed with Qualified Electronic Signatures

The eIDAS Regulation is of direct application to qualified electronic signatures. A qualified signature fulfils two additional requirements compared to an advanced signature:

(a) relies on a 'qualified certificate for electronic signature'; and

(b) is created using a 'qualified electronic signature creation device'.

Documents signed with a qualified electronic signature are presumed equivalent to documents signed with a handwritten signature. In case of litigation, the burden of proof is borne by the party challenging the authenticity of a qualified electronic signature.

Execution by means of qualified electronic signature is the most secure way of electronic execution of a document. It is also the only means, which is accepted by certain third parties who impose wet ink signature:

(a) Qualified trust service providers ("TSPs")

The European Commission maintains a list of qualified electronic signature creation devices. Only electronic signatures created using these can be 'qualified signatures'. Qualified TSPs have to use one of these devices to encrypt signatures and have to meet the requirements of article 32 of the eIDAS Regulation for the validation of qualified electronic signatures.

In Luxembourg, to become a qualified TSP, an application should be submitted to the ILNAS (Institut Luxembourgeois de la Normalisation, de l'Accréditation, de la Sécurité et de la qualité des produits et services). The department of digital trust (département de la confiance numérique) is responsible for the national trusted list (liste de confiance nationale).

According to Article 22(1) of the eIDAS Regulation, "each Member State shall establish, maintain and publish trusted lists, including information related to the qualified trust service providers for which it is responsible, together with information related to the qualified trust services provided by them." The European Commission set up a Trusted List Browser so that TSPs can easily be found and verified, either by country, type of service, or name. It is also possible to upload a signed file to identify which TSP issued the signing certificate(s) it contains.

For Luxembourg, there is currently only one active TSP: LuxTrust S.A. It is under the supervision of ILNAS (under number 2018/8/001) in order to ensure that the TSP is following all of the requirements and uses the right devices to encrypt the signatures and ensure a sufficient level of security.

LuxTrust S.A is qualified for multiple services, including the 'qualified certificate for electronic signature'. Therefore, and to date, only certificates issued by LuxTrust S.A are recognised as a qualified electronic signature with the same legal value as a written signature (Article 25(2) of the eIDAS Regulation).

(b) Recognition in all EU Member States of qualified electronic signatures

The eIDAS Regulation regulates the cross-border recognition of qualified electronic signatures on an EU level, which is of particular interest to companies that carry out digital transactions in more than one EU Member State. Qualified electronic signatures based on qualified certificates for electronic signatures issued in one EU Member State must be recognised as qualified electronic signatures in all other EU Member States (Article 25(3)).

As an example: a document is signed by a French resident using technology provided by DocuSign France. According to the French Trusted List, this entity is a qualified TSP in France. If the electronic signature is a qualified signature (because they also offer advanced signatures), it must be granted the same legal effect as the handwritten version within the whole of the EU.

If you would like further information, please contact your regular Maples Group contact or any of the contacts listed below.


1. Grand-Ducal Regulation of 20 March 2020 introducing measures facilitating the holding of meetings for Luxembourg companies 

2. In french: ICP (Infrastructure à Clé Publique)

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