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Whether supporting the handover of a family business to the next generation or preparing to sell it to a third party, the transfer needs to be carefully planned. It requires good communication between all those involved and meticulous preparation.

Family businesses make up a large part of Luxembourg's economic fabric. Every year, a fraction of these businesses are transferred, either within the family or to one or more external parties. Irrespective of whether the entrepreneur is the founder of the business or has taken it over and developed it, a smooth transfer is essential. It is a matter of preserving their legacy or a lifetime's work. "Private and professional wealth are often closely linked so both aspects must be taken into account when planning the transfer. It is essential that this is well managed," says Anne Goedert, Family Practice Adviser at Banque de Luxembourg. “Unfortunately, entrepreneurs are often too busy with their business to give the matter serious consideration. And it's not always easy for them as it means thinking about closing a major chapter in their life.”

"Private and professional wealth are often closely linked so both aspects must be taken into account when planning the transfer.”Anne Goedert, Family Practice Adviser at Banque de Luxembourg.

A fresh perspective

To enable families to thoroughly prepare for this important event, Banque de Luxembourg has established a specific support process. “Our first priority is to involve all the stakeholders, not only the generation currently in charge, but the next one too," continues Anne Goedert. Our objective is to help them take a fresh look at the proposed transfer, to allow everyone to express their hopes, fears and expectations in relation to the project and to listen to those of others – which can sometimes differ significantly from one family member to another.” From this platform, all the stakeholders are involved in co-constructing the best solution to ensure a transfer that suits both the family and the business.

It is only after the parties agree on the preferred option that the more technical part of the work begins. "Obviously there is all the legal side to be considered – this is an area where we bring invaluable expertise and support. We can help with drafting the necessary documents such as a charter, a shareholders' agreement, a deed of gift or a will,” Anne Goedert explains. From launch to completion, the process may take several months or even years. We adapt to the pace chosen by the family.” Our support is part of a long-term relationship.

Supporting the next generation

Among the initiatives that Banque de Luxembourg has put in place to facilitate the transfer of family businesses are support programmes for the next generation. These include an annual summer academy for young people who are not yet working in the business and seminars for members of the rising generation who have already joined the family business and are destined to take it over one day. “Both programmes take place outside Luxembourg, over several days, and bring together young people in similar situations,” explains Anne Goedert. “It’s a neutral space where they can ask questions that would be difficult to raise within their family or circle of friends. They soon see that they are not the only ones with these kinds of questions. The programme helps them focus on what they really want for their future and at the same time they create lasting bonds with the other participants.”

Banque de Luxembourg’s multi-dimensional approach makes it the go-to partner for Luxembourg family businesses for which the transfer and handover of the business is a fundamental issue.

Anne Goedert
Family Practice Adviser