On 23 November 2016, the Luxembourg Chamber of Deputies adopted a draft law on the creation of Societal Impact Societies (SIS).
The SIS are aimed at existing organisations in the social and solidarity economy, foundations and cooperatives, and project leaders who wish to launch socially innovative activities.
This law regarding Societal Impact Societies marks an official recognition of the importance of the social and solidarity economy in Luxembourg.
The SIS pose various advantages, including improved legal security, an adapted fiscal framework and the access to public markets, as well as strict obligations regarding transparent governance. Through the demand of a ministerial approval and an annual supervision mechanism, the SIS system aims to guarantee not only proper financial management in these businesses in the social and solidarity economy, but also the supremacy of social or societal aims in the distribution of profits.
Likewise, the purpose of the SIS is to encourage the development of new dynamics in the sustainable finance sector. However, the future distribution of profit to private investors will remain strictly supervised by and subjected to the prior achievement of social or societal objectives.
The government has expressed its opinion that such a law and the measures which accompany it will allow a new method of undertaking social aims in order to contribute to the necessary diversification of the Grand Duchy’s economic fabric.
Moreover, the government, along with numerous other groups, is offering a practical guide to SIS to accompany social entrepreneurs as they set up SIS. The guide is a series of concrete and practical responses to the main possible questions on the subject. There will also be several model example documents to allow anyone who so wishes to carry out the necessary steps to ask for and obtain the approval for setting up an SIS. Other helpful tools include guidelines which define and evaluate performance indicators, training sessions for businesses, and other awareness and information activities.
As of November 2016, the practical SIS guide, model example documents and evaluation guidelines are readily and freely available on the websites www.guichet.public.lu and www.uless.lu.
The Union luxembourgeoise de l’économie sociale et solidaire (ULESS) will be involved in the implementation of the draft bill for the creation of Societal Impact Societies by providing awareness and informative activities directly linked to the creation and management of SIS.
