Luxembourg has developed a distinctive framework under its social and solidarity economy (SSE) to promote socially beneficial businesses and sustainable local development. Since 2016, with the introduction of the Societal Impact Company (SIS) legal status bolstered by active institutions, dedicated labels, and support mechanisms the country has strategically structured policies to embed social utility, cooperation, and community-rooted value within its economic fabric.

The Challenge

Luxembourg recognised that traditional economic models often undervalue social equity and community well-being. Despite long-standing civic and solidarity efforts, there was no formal recognition or specific support for enterprises whose primary mission is societal impact. This regulatory gap limited visibility, growth, and the potential of initiatives rooted in social utility, community presence, and cooperative principles.

The Solution

Luxembourg has responded with a layered and targeted ecosystem to foster the SSE:

• Legal recognition through Societal Impact Company (SIS) status: Established in 2016, SIS provides a regulated legal structure for mission-driven organisations, requiring high standards in transparency and governance.
• Supportive infrastructure and historic commitment: Since 1999, Luxembourg has progressively prioritised SSE through dedicated government units, evolving national plans, and symbolic declarations culminating in the SIS law and subsequent institutional support.
• Impact Luxembourg label: Launched in October 2022, this label, awarded by the Luxembourg Union for the Social and Solidarity Economy (ULESS), elevates and differentiates SIS-certified companies within Luxembourg’s economic network.
• Social Business Incubator: Also inaugurated in 2022, this tailored incubator provides bespoke advice, mentoring, and infrastructure support to emerging societal impact enterprises.
• Diverse sectors represented: SIS entities span education, coaching, housing, integration, ecology, food, culture, and more showcasing the breadth of opportunities within the SSE.

Impact and Success

The SSE and SIS framework have already generated measurable socio-economic value, further described here. In addition:

• Institutional maturity: The trajectory from formal recognition to support units, SIS status, and incubator structures demonstrates a resilient, evolving commitment to social enterprise growth.
• Recognisable best practices: The Impact Luxembourg label and Social Business Incubator provide visible and structured models that bolster legitimacy and appeal for societal impact ventures.
• Inclusive and diverse impact: From circular economy coaching and equal-opportunity education to participatory housing, sustainable food solutions, and advocacy media, SIS-labelled companies reflect a rich spectrum of societal engagement.

Luxembourg’s approach positions it as a leading example in institutionalising social entrepreneurship. By combining legal recognition, dedicated labels, incubator support, and sector diversification, it offers a replicable framework that embeds societal value at the core of economic activity and provides a blueprint for inclusive, sustainable growth.