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14.8 Luxembourg Dividend Distribution Rules

Dividend Rules​

Requirements:

  • Must have sufficient retained earnings
  • Must comply with corporate law
  • Must follow form-specific rules
  • Must be approved by shareholders
  • Tax implications apply

Restrictions​

May Not Pay Dividends If:

  • Insufficient retained earnings
  • Would impair capital
  • Violates corporate law
  • Not approved by shareholders

Luxembourg Compliance Note​

Dividend distributions in Luxembourg:

  • Must comply with corporate law
  • Must have sufficient earnings
  • Must follow approval process
  • Must use proper accounts
  • Tax withholding may apply

Think It Through​

Why are there restrictions on dividend payments? What protects creditors and the company?