Luxembourg remains a leading hub for business and investment, with over 168,000 entities registered on the Luxembourg Business Registers by the end of 2025 and more than 13,000 new registrations that year. Within this dynamic corporate landscape, blocking certificates in Luxembourg (certificat de blocage) are a crucial step, confirming that the required share capital has been deposited into a blocked account before company incorporation or investment fund setup. This process is especially important for companies with non-resident directors or complex ownership structures, ensuring capital is secured and compliant with Luxembourg corporate law.
What Is a Blocking Certificate in Luxembourg?
A blocking certificate in Luxembourg, commonly called a certificat de blocage, is a written confirmation that the required share capital has been deposited and blocked into an account before a company or fund is incorporated. The term “blocked” means that the deposited funds cannot be accessed, transferred, or used until certain legal steps are completed.
Why Blocking Certificates Exist in Luxembourg?
A blocking certificate plays a key role in ensuring that companies and funds meet legal requirements during formation. It is not just a formality but a safeguard for all parties involved.
Legal and Regulatory Purpose
The certificate provides formal proof that a company or fund has actually received its required capital. It ensures that the deposited funds are verified before the incorporation process is completed.
Protection for Creditors and Investors
In Luxembourg, the mechanism helps protect creditors and investors. It guarantees that the statutory capital requirements are genuinely met at the time of formation.
Legal Certainty and Investor Confidence
Blocking certificates reflect Luxembourg’s broader focus on legal certainty and investor protection. They give regulators, investors, and other stakeholders confidence that the company or fund begins operations with secured and verified capital.
When Is a Blocking Certificate Luxembourg Required?
A blocking certificate is required whenever formal proof of deposited capital is necessary for legal or regulatory purposes.
Incorporation of Luxembourg Companies
Companies in Luxembourg with minimum share capital requirements must obtain a blocking certificate.
For example:
- Sàrl (private limited company) – minimum capital EUR 12,000
- S.A. (public limited company) – minimum capital EUR 30,000
Investment Fund Formation
For certain investment fund structures, a blocking certificate is essential during setup.
When a Blocking Certificate Is Not Required
Not all entities are required to obtain a blocking certificate. Its necessity depends on the legal form of the company or fund and the capital rules that apply.
Entities Without Minimum Capital Requirements
Companies or funds that have no statutory minimum share capital typically do not need a blocking certificate. This includes smaller legal structures or partnerships that are exempt from capital verification.
Exempted Legal Structures
Certain structures may be specifically exempted under Luxembourg law.
These entities can proceed with incorporation or registration without a blocking certificate, provided all other legal and compliance requirements are fulfilled.
What Information a Blocking Certificate Typically Confirms?
A blocking certificate contains several key pieces of information that provide formal proof of capital deposit.
Company or Fund Name
The certificate lists the legal name of the company or fund for which the capital has been deposited.
Amount of Capital Deposited
It confirms the exact amount of capital that has been deposited into the blocked account.
Currency of Deposit
The certificate specifies the currency in which the funds have been deposited, ensuring clarity for legal and financial purposes.
Confirmation of Blocked Status
The document clearly states that the funds are held in a restricted account and cannot be accessed until the legal steps of incorporation or registration are complete.
Date of Issuance
The certificate includes the date it was issued, providing a timestamp for authorities and notaries.
Note: The exact formatting and additional details may vary depending on the bank or financial institution issuing the certificate.
How a Blocking Certificate Fits Into the Incorporation Process?
The use of a blocking certificate follows a clear sequence that ensures proper verification of capital during company or fund formation. It is important to note that the certificate is a transitional document, not a permanent restriction on the funds.
Step 1: Share Capital Deposit
The process begins with the company or fund depositing its share capital into a temporary blocked account at a financial institution.
Step 2: Bank Verification
The bank confirms that the deposit has been received. This verification ensures that the funds are properly accounted for and ready for formal documentation.
Step 3: Issuance of the Blocking Certificate
Once verification is complete, the bank issues the blocking certificate. This certificate serves as proof that the funds are held under temporary restriction for the incorporation process.
Step 4: Notarial Incorporation or Registration
The notary uses the blocking certificate to complete the incorporation or registration process with the authorities.
What Happens After the Blocking Certificate Is Issued?
Once the incorporation or registration is completed, the blocking condition is lifted.
This means the deposited capital is no longer restricted and becomes available to the company or fund for operational use.
Availability of Funds
The released funds can be used for everyday business activities, such as paying suppliers, staff, or other corporate expenses. This ensures that the entity can start functioning immediately after legal formalities are completed.
Conversion to an Operational Account
The temporary blocked account often converts into a standard operational account. This allows the company or fund to manage its finances efficiently while remaining fully compliant with Luxembourg banking and corporate regulations.
Timing Considerations
The exact timing of fund release and account conversion depends on the completion of legal steps, including notarisation and registration with the Commercial Register of Luxembourg.
Once these steps are finalised, the company or fund has full access to its capital.
Common Misunderstandings About Blocking Certificates
Blocking certificates are often misunderstood. Clarifying these points helps non-resident founders, international companies, and local entrepreneurs complete the Luxembourg incorporation process with greater confidence and clarity.
Funds Are Not Frozen Indefinitely
A common misconception is that the capital remains blocked forever. In reality, the restriction is temporary and is lifted once the incorporation or registration process is complete.
It Is Not a Guarantee of Banking Approval
Some assume that having a blocking certificate guarantees ongoing banking relationships. The certificate only confirms the deposit of capital for incorporation purposes and does not replace normal account opening or compliance procedures.
It Does Not Replace Ongoing Compliance
A blocking certificate does not remove the need for KYC, AML, or other regulatory compliance after incorporation. Companies and funds must continue to meet Luxembourg’s legal and financial requirements even after the certificate has served its purpose.
