Company Formation Switzerland – Most Common Business Structures

The Swiss Constitution protects the right to engage in trade and industry by all citizens, including those who do not permanently reside in the country. This includes the right to establish a business, form a company, or acquire ownership interests in a Swiss firm. In general, this requires a residency and work permit from the relevant authorities to be obtained in advance. Read More

The following are the most common Swiss company structures:

Limited Liability Company (S.A.R.L./GmbH/Gesellschaft mit beschränkter Haftung)

By law, a limited liability company can be founded when one or more people or businesses join together (Swiss or foreign). Registration in the Trade Register is required for a company to be created and for it to gain legal identity. The minimum share capital is CHF 20,000 and the maximum is CHF 2,000,000. Affiliates are required to put up 50% of their participation at the time of incorporation, and shares might be either CHF 1,000 or a multiple of CHF 1,000.

Financial gains and investments are subject to corporate taxation, but the wealth of shareholders is subject to personal taxation at both the share (wealth) and benefit (distribution) levels (as income). Read More

In Switzerland, this method of organization is quite uncommon. Increases in minimum capital requirements for joint stock companies from CHF 50,000 to CHF 100,000 have made these organizations more appealing to investors. Although there are many GmbHs in Switzerland, they only account for 10% of all Swiss businesses.

A corporation that is owned by its shareholders (also known as a SA or AG).

The joint stock company is distinguished from other business structures by the fact that its assets are kept entirely distinct from those of its stockholders. Three natural or legal people are required for associate status, with at least one being a Swiss citizen or permanent resident. Consultancy firms, notaries public, and lawyers are typically consulted during the establishment of such a business. Together with the constitutive act, the company’s statute lays forth all of the ground principles for how the business operates. One must register their business with the Commercial Register. A company must have at least CHF 100,000 in “social capital,” or share capital, with at least CHF 50,000 of that amount paid in at the time of incorporation. Nominative or bearer shares have a minimum value of CHF 0.01. Administrators work for the corporation and are selected for that role by the General Assembly. The majority of the Board of Directors must be Swiss nationals in order to comply with Swiss law.

Joint stock companies are the most common form of business organization in Switzerland. Most overseas corporations with local operations here use a branch office structure.

Limited Liability Company (LLC) or Sole Proprietorship (Sole Proprietorship)

By freely associating for commercial purposes, two or more individuals or entities can form a corporation. In most cases, the association agreement will lay out the ground rules for how work will be divided, who will have a voice in making decisions, and how profits will be shared. The Bonds Code governs basic corporations in the absence of an association agreement. There is no need to file paperwork with the Commercial Registry or maintain financial records for a simple partnership because it lacks a name, legal personality, and these identifying characteristics. There is no cap on the extent to which an associate is liable, and their responsibilities are infinite. Members of an LLC are subject to their own taxation even though the company itself is not. Any partner whose annual income is more than CHF 100,000 must register with the Commercial Registry and keep separate books.

If you want to know everything there is to know about setting up a company in Switzerland, you should ask a company that specializes in company formation in Switzerland for help. This company can tell you about the different legal structures, the costs and procedures of setting up a company, the Swiss Commercial and Registry Registers, and the Swiss tax system.

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