The new chance scheme (nouvelle chance) consists of giving an individual the opportunity to start a new business by granting them a new business permit, even if they were involved in a bankruptcy or compulsory liquidation during their previous business activity.
You may be granted a new chance if the bankruptcy is the result of one of the 7 causes provided for by law.
Who is concerned
- A former managing director of a company declared bankrupt; or
- any individual who has been in a position to exercise significant influence over the management or administration of a company declared bankrupt; or
- anyone who has held the majority of the shares in a company declared bankrupt;
who applies for a new business permit.
Causes of the bankruptcy
When you apply for a new business permit, you must be able to provide evidence that the bankruptcy was directly caused by:
- a natural disaster, recognised as such by the government in council; or
- unintentional destruction of the production site or production equipment; or
- the loss of a key customer; or
- a large-scale public works project; or
- medically certified partial or total incapacity for work of the managing director; or
- a pandemic, recognised as such by the government in council; or;
- a loss of profitability as a result of a major market disruption (only if the bankruptcy was declared by filing).
Residual debts from the bankruptcy
In order to apply for a new business permit, you must reach an agreement for the settlement of any remaining debts of the bankruptcy with:
- the Registration Duties, Estates and VAT Authority (Administration de l'enregistrement, des domaines et de la TVA - AED), if the amount of VAT still due exceeds 1 % of the net amounts actually paid during the last 5 financial years;
- the Luxembourg Inland Revenue (Administration des Contributions Directes - ACD), if the amount of direct tax still due exceeds 1 % of the amounts actually paid over the last 5 financial years;
- the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS), if the amount of social security contributions still due exceeds 4 months of contributions, calculated on the basis of the monthly average over the last 24 months.
You do not need to obtain an agreement for the settlement of the remaining debts of the bankruptcy if the amounts owed to the AED, ACD or CCSS are below the thresholds set out above.
You must also comply with the other conditions for issuing a business permit (with the exception of the condition relating to debts owed to public creditors). You can find the details of these conditions on the information page on how to apply for a business permit.
How to proceed
Applying for a business permit
You must submit your application for a business permit in the same manner as a regular application. You can find all the necessary information on this subject in the information page on how to apply for a business permit.
In addition to the documents normally required, the application must be accompanied by:
- a copy of the bankruptcy or liquidation judgment;
- where applicable, the payment agreement(s) concluded with public creditors (AED, ACD or CCSS);
- proof of the viability of the planned activity (e.g.: market research, business plans, financial analysis, etc.).
Opinion of the New Chance Commission
The decision whether or not to grant a new business permit is taken on the basis of an advisory opinion issued by the New Chance Commission. This commission assesses the viability of the activity you are planning to carry out, based of the proof of viability that you are required to provide.
Who to contact