"We need better preventative measures to avoid companies declaring bankruptcy", a speaker for the Chamber of Commerce said after the rising number of bankruptcies in 2018 was published last week.
According to Tom Baumert of the House of Entrepreneurship, one of the main reasons behind the hike in bankruptcies lies in the fact that more and more companies are being founded in Luxembourg.
Bankruptcy data for the year 2018 shows, that small companies (5 employees or fewer) struggle the most.
The Chamber of Commerce would like to make it easier for failed business owners to get a second chance and try again.
Compared to several other EU countries, it is currently relatively hard to start a new enterprise after having declared a bankruptcy in Luxembourg.
Comprehensive reform
The Chamber of Commerce has demanded comprehensive bankruptcy reform for several years already. Any new laws would also need to find a better solution to avoiding bankruptcy in the first place.
If Luxembourg really wants to market itself as a start-up nation, then the country should not be so reticent in giving second or even third chances, Baumert suggested. One famous example: Max Levchin, the founder of Paypal had to declare bankruptcy four times before eventually founding his successful online payment system in 1998. 17 years into the venture, Paypal was worth more than the Deutsche Bank.
According to the Chamber of Commerce, bankruptcy laws are in dire need of reform and modernisation.
While a draft law has been ready to go for a while now, the Chamber of Commerce is not satisfied with its content since bankruptcy prevention does not take the central role it should in the Chamber's eyes.
To fill this apparent void, the Chamber of Commerce created a new initiative in 2018, modelled off a similar programme in Belgium, with the goal of preventing bankruptcies.
