The implementation of the Mobility Directive: One year after

The Directive (EU) 2019/2121 (the Mobility Directive) was transposed in Luxembourg in February 2025 by the law of 17 February (the Mobility Law). The Mobility Directive sought to facilitate corporate mobility between EU Member States while increasing the protection available for shareholders, employees and creditors, aiming to harmonize cross-border corporate reorganizations in the European Union.

A year later, however, the practical picture is more nuanced. The Mobility Law has made processes much more formalistic than they used to. Rather than reducing legal and administrative steps, it has increased them. This now requires better anticipation from companies, as the timeline to be observed for certain disclosures has been extended and additional formalities must be fulfilled. In addition, the primary goal of the Mobility Directive, i.e. the harmonization of national legislations, is not met as the EU Member States retained some freedom in the implementation of the Mobility Directive. After a year of practice, a number of practical limitations have arisen.

 

Creditors' rights: navigating divergent frameworks

Creditors’ rights provide one of the examples of the timeline misalignment between Member States.

Pursuant to the Mobility Law, creditors benefit from a three-month period following the publication of the common draft terms with the Luxembourg official journal (Recueil électronique des sociétés et associations (RESA)) during which they may request adequate safeguards (the Mobility Directive did not set any specific period, leaving Member States the freedom to determine it). This period has no suspensive effect on the operation itself which may, in principle, be completed and become effective even before such period expires. Similarly, other jurisdictions, such as Germany, also grant a three‑month period to creditors to request adequate safeguards, but provide that the operation cannot be completed until that period has fully elapsed, as the registration file must confirm whether safeguards were requested.

This difference creates a structural imbalance: even when Luxembourg’s law would permit earlier completion, the timing of a cross‑border operation is ultimately dictated by the strictest procedural framework involved.

As a result, Luxembourg’s relatively flexible and efficient system is never determinative on its own. The intended harmonization of the Mobility Directive is, to some extent, only partial: Luxembourg’s framework may be modernized and technically sound, but its effectiveness continues to depend on the slowest or most demanding rules provided by some jurisdictions.

 

Report for shareholders and employees

The Mobility Law has introduced the obligation for the management to prepare reports for the attention of the shareholders and the employees, explaining and justifying respectively the legal and economic aspects of the operation, as well as its implications for employees. These reports shall be made available electronically to the shareholders and the employees. This provision reflects the growing reliance on digital platforms for communication and document management. However, the Mobility Law does not specify how electronic availability should be ensured (whether via intranet, cloud storage, email, or other channels).

This ambiguity has prompted debate among practitioners. On the one hand, flexibility allows companies to choose the most appropriate method for their circumstances. On the other hand, the lack of clear guidelines can lead to uncertainty, particularly in cases where stakeholders are dispersed across different countries or have varying levels of access to digital resources.

Ultimately, the obligation remains an obligation of result: companies must take all reasonable measures to ensure that stakeholders can access the report, but the precise method is left to their discretion.

In addition, while the production of the report for the attention of the shareholders may be waived, the report for the attention of the employees is mandatory unless the company and its subsidiaries do not employ staff other than members of the administrative body. This means that the exemption only applies if none of the entities concerned (including direct or indirect subsidiaries) employ staff outside their management bodies.

In practice, if applied literally, this exemption is rarely applicable. Indeed, most Luxembourg companies have foreign subsidiaries with employees. As a result, the exemption is often rendered moot, and this may lead to an odd situation where a Luxembourg holding company must prepare a report for employees it does not directly employ. To the best of our knowledge, no aligned position has been yet adopted by practitioners on this point and a clarification of the scope and application of the exemption would be welcomed, in particular to ensure that it achieves the reduction of formalities for companies having no employees.

 

Dissolution without liquidation: still a separate regime?

An additional point of uncertainty created by the transposition of the Mobility Directive into Luxembourg law concerns dissolutions without liquidation. Before the entry into force of the Mobility Law, this procedure - where a Luxembourg company is dissolved and its assets and liabilities are automatically absorbed by its sole shareholder - was treated as a distinct corporate process, separate from the legal framework governing simplified mergers.

Practitioners have questioned whether a dissolution without liquidation of a Luxembourg entity into its parent located in the European Union should fall within the scope of the new cross‑border merger regime introduced by the Mobility Law. This raises the legitimate question of (i) whether a dissolution without liquidation, which operates on exactly the same principle as a merger (i.e. ipso jure transfer of all assets and liabilities) must now comply with the procedural requirements applicable to European cross‑border mergers and be treated as a functional equivalent of a simplified EU merger, or (ii) whether it continues to benefit from its own separate and lighter corporate regime.

 

Conclusion

Although the Mobility Directive was designed to harmonize cross-border corporate mobility within the EU, its first year of application shows that this ambition remains largely unmet. Far from creating a clear and predictable framework, the implementation has revealed significant differences between Member States in both procedures and administrative requirements. In several respects, Luxembourg’s transposition has reinforced these divergences, highlighting both the Mobility Directive’s lack of detail and the national discretion exercised in its application.