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Commercial leases in Luxembourg are governed by the law of 3 February 2018 on commercial leases, which came into force on 1 April 2018. This law profoundly modernized the legal framework for commercial leases, which previously fell solely under the Civil Code. It establishes a minimum 9-year term, a renewal right for the tenant, regulated rent indexation, and specific termination rules. This guide presents the essential rules for landlords and tenants of commercial premises in Luxembourg.
The law of 3 February 2018 imposes a minimum 9-year term for all commercial leases (Art. 2). Parties may agree on a longer term, but never shorter. The tenant benefits from a triennial termination right: they may end the lease at the expiry of each 3-year period (3, 6, 9 years) with 6 months' notice, served by extrajudicial act or registered letter (Art. 4). The landlord may only terminate during the lease term in exhaustively listed cases: serious tenant breach, landlord's personal need for business operation (under strict conditions), or total demolition/reconstruction works. Non-renewal at lease expiry must also be notified 6 months in advance. The lease renews by tacit renewal for 9 years if neither party gives notice of non-renewal.
Unlike residential leases, commercial rent is not capped by the 5% rule of invested capital (Art. 3, law of 21.09.2006 on residential leases). Rent is freely set between parties according to market conditions. Commercial rent indexation is linked to the Consumer Price Index (CPI) published by STATEC, not to a commercial rent index (ILC) as in France. The indexation clause must be expressly provided in the lease; otherwise, rent remains fixed. Rent review may be requested by either party at the end of each 3-year period if the rent no longer corresponds to actual rental value (Art. 7). Key money (pas-de-porte) is lawful in Luxembourg: the landlord may require an initial payment in exchange for the commercial advantages of the location. This amount is unregulated and freely negotiated.
The commercial tenant benefits from a lease renewal right (Art. 5, law of 03.02.2018). This right is exercised at lease expiry by notifying the landlord of a renewal request at least 6 months before the term. A landlord who refuses renewal without legitimate grounds must pay the tenant eviction compensation. This compensation covers the tenant's loss: loss of clientele, moving and reinstallation costs, compensation for loss of business goodwill. The amount is set either amicably or by a judge. The landlord may refuse renewal without compensation only for serious grounds: tenant's breach of obligations, building condition requiring demolition/reconstruction, or personal business need (the landlord must then operate the premises for at least 2 years). Assignment of the commercial lease is possible unless otherwise stipulated, but the landlord must be informed of the assignment.
By Erwan Bargain, REV TEGOVA · Updated: April 2026
The minimum term is 9 years (Art. 2, law of 3 February 2018). The tenant may terminate at each triennial period (3, 6, 9 years) with 6 months' notice. The landlord may only terminate for reasons exhaustively listed by law.
No, unlike residential leases (capped at 5% of invested capital), commercial rent is freely set between parties according to market conditions. There is no legal cap. Indexation is based on the STATEC CPI if a clause provides for it in the lease.