Setting Up a Company in Switzerland: GmbH vs AG

Switzerland combines political stability, a strong legal system and access to international finance, which is why it remains a preferred base for holding companies, trading businesses and high-value services. Two corporate forms dominate: the GmbH (Gesellschaft mit beschränkter Haftung / Sàrl) and the AG (Aktiengesellschaft / SA). This guide compares them and explains the formation process for foreign founders.

GmbH vs AG at a glance

GmbH (Sàrl / Sagl)

• Minimum capital CHF 20,000, fully paid in.
• Shareholders (Gesellschafter) are recorded in the commercial register and their names are public.
• Transfers of quotas require a written agreement and, by default, shareholder approval.
• Suits owner-managed companies and subsidiaries.

AG (SA)

• Minimum capital CHF 100,000, of which at least 20% per share and at least CHF 50,000 in total must be paid in.
• Shareholders are not listed in the public register.
• Shares are easier to transfer; better suited to investors and larger structures.
• Requires a board of directors (Verwaltungsrat).

The residency requirement

Swiss law requires that the company can be represented by at least one person domiciled in Switzerland: a managing director (GmbH) or board member or director (AG) with individual signing authority, or two with joint signing authority. Foreign founders therefore either relocate someone, hire a local director, or appoint a professional resident director. Plan this early: it affects governance, cost and tax substance.

Step by step

1. Choose the canton and seat. Corporate tax rates differ significantly between cantons and municipalities, as do administrative practices.
2. Check the company name in the central business name index (Zefix).
3. Draft the articles of association and the founders’ documents.
4. Open a capital deposit account with a Swiss bank and pay in the capital. The bank issues a confirmation. (For contributions in kind, a formation report and audit confirmation are needed.)
5. Sign the public deed of formation before a Swiss notary. Foreign shareholders can be represented by power of attorney (notarised and apostilled).
6. Register in the commercial register of the canton. The company acquires legal personality on registration and is published in the Swiss Official Gazette of Commerce (SOGC).
7. Register for VAT if the company’s worldwide turnover from taxable supplies reaches CHF 100,000 per year; voluntary registration is possible below that.
8. Social insurance: register with an AHV/AVS compensation office and arrange accident insurance and occupational pension (BVG/LPP) before employing staff.

The federal platform EasyGov allows several registrations (commercial register, VAT, social insurance) to be handled online.

Taxes in brief

Swiss companies pay federal, cantonal and communal profit taxes; the effective combined rate depends on the location. Capital tax is levied at cantonal level. Dividends are subject to a federal withholding tax, which can be reduced under double tax treaties. Large multinational groups may fall under the OECD global minimum tax rules implemented in Switzerland. Always model the tax position with a Swiss tax adviser for the specific canton.

Work permits and the founders’ situation

EU/EFTA nationals benefit from the free movement agreement and can generally take up employment or self-employment in Switzerland with a registration-based permit. Non-EU nationals face quotas and must meet qualification and labour-market requirements; a company formation alone does not entitle a founder to a permit.

Common mistakes

• Overlooking the resident representative requirement until the notary appointment.
• Choosing a canton for its headline rate without considering where the business will actually operate.
• Not budgeting for the AG’s higher capital and audit requirements (an opting-out from audit is possible for small companies under conditions).
• Assuming that a Swiss company changes the founder’s personal tax residence.
• Underestimating Swiss bank onboarding requirements for foreign-owned companies.

Document checklist

• Founders (individuals): passport copy, residential address, and a notarised and apostilled power of attorney if represented at the notary.
• Corporate founders: a recent certified extract from the home register with apostille, proof of signatory authority, and a board resolution approving the investment.
• Beneficial ownership: Swiss law requires shareholders to report beneficial owners to the company, so prepare the ownership chain to the natural persons.
• Resident representative: identity details and Swiss domicile of the director with signing authority, plus their written acceptance of the mandate.
• Seat: an address in the chosen municipality (own office or a domicile arrangement), with the landlord’s consent where required.
• Bank: KYC documentation for the capital deposit account, including the business plan and source of funds.

Choosing the canton

The canton affects corporate tax, administrative practice and, often, talent availability. Compare the effective cantonal and municipal tax burden, the language region (German, French or Italian, which also determines the language of the register and authorities), proximity to clients and staff, and whether the company needs genuine office substance there. Cantonal economic promotion offices can explain local practice before you commit.

How long it takes, qualitatively

The resident director and the bank are usually the critical path. Swiss banks run careful onboarding for companies with foreign owners, and the capital deposit confirmation is needed before the notary appointment. Once that is in hand, the notarial deed and filing with the cantonal register follow, and registration is then published in the SOGC. VAT and social insurance registrations come after.

Audit: ordinary, limited or opting out

Larger companies need an ordinary audit; smaller ones a limited audit. Small companies with no more than ten full-time employees on annual average can, with the consent of all shareholders, opt out of the limited audit. Group policies sometimes require an audit anyway, so check before opting out.

Common misconceptions

• “The resident director is a formality.” The signatory carries the same liability as any officer; professional directors expect reporting and clear rules.
• “A low tax rate is guaranteed.” It depends on canton, municipality, income mix and substance.
• “Incorporation brings a work permit.” It does not; non-EU/EFTA nationals face quotas and qualification requirements.
• “Switzerland works like an EU state.” It is outside the EU and its customs union: goods need customs declarations and Swiss VAT is separate from EU VAT.

Key terms

• Zefix: the central business name index.
• SOGC: the Swiss Official Gazette of Commerce.
• AHV/AVS: old-age and survivors’ insurance.
• BVG/LPP: occupational pension.

Official sources

• EasyGov, the online counter for businesses: easygov.swiss
• Central business name index: zefix.ch
• SME portal of the Swiss Confederation: kmu.admin.ch
• Federal Tax Administration, VAT: estv.admin.ch

Figures and requirements may change; confirm with official sources or a licensed Swiss professional.

How Focaly Group helps

Our Company Formation & Expansion practice helps you choose between GmbH and AG, assess cantons, coordinate notary, bank and registry, and solve the resident director question with licensed local partners. HR & Relocation supports permits and moving people.