Guilhèm Becvort

[co-author: Anthony Seguin] Luxembourg further strengthens its competitive landscape with the proposal of a new dedicated tax regime for employee stock option plans in young innovative companies. In context This new draft bill is part of a broader effort to strengthen the attractiveness of Luxembourg for both employees and growing businesses. In recent years, both categories have already benefited from significant reforms.

Luxembourg has formally adopted its new carried interest regime on 22 January 2026, marking a key milestone in the modernisation of its tax framework for private capital and asset management. This adoption follows the legislative process previously outlined in our earlier alert on Luxembourg's push for private capital attractiveness and competitiveness: Luxembourg's push for private capital attractiveness and competitiveness | White & Case LLP.

Luxembourg sharpens its private capital edge: permanent carried interest regime and clarified reverse hybrid carve-out. In context As 2025 reached its midway point, Luxembourg has advanced a series of tax measures designed both to ensure compliance with international standards and to reinforce the Grand Duchy’s position as a leading hub for cross-border investment funds. Two recent developments illustrate this approach.