Setting up a company in Switzerland as a foreigner is possible and does not pose any major problems.
However, certain requirements must be met in order to set up your company in Switzerland, the most important being that a person on the board of directors of the company must be domiciled in Switzerland.
Through our dedicated services, a Swiss company can be set up even without necessarily moving and leaving your own country. The first step in setting up your business in Switzerland is to choose the legal form of your company.
A wide variety of legal forms can be created; the most common are the limited liability company (Gesellschaft mit beschränkter Haftung, GmbH) and the limited company or stock corporation (Aktiengesellschaft, AG).
The choice depends on entrepreneurial needs, economic requirements and costs, and the degree of responsibility that the entrepreneur wants to assume.
In this article I will show you what entrepreneurs need to pay attention to and what the legal prerequisites are for setting up a limited liability company or an limited company in Switzerland, and we will also list the legal and administrative corporate services that LEXPAT offers its clients.
The Limited Liability Company (GmbH)
The GmbH is a mixed form of corporation and general partnership.
Over the years they have seen an important development, this formula is now the chosen one in the Swiss economic scenario. The creation of a GmbH takes place through registration in the commercial register. To set up a GmbH, one or more natural and/or legal persons are required. As in the case of the AG, a GmbH can be founded and managed by a single person. The share capital of at least CHF 20'000 must be paid up or covered in kind. The minimum quota per partner, in cash or in kind, amounts to CHF 100; and each partner may hold more than one social quota. The holders of the shares must be registered in the public trade register under their own name. In order to set up a GmbH, the company's management needs at least one managing director authorized to sign individually who resides in Switzerland. In case of joint signature of two, at least two of the managing directors must be domiciled in Switzerland. However, the other managing directors and shareholders may be resident abroad.
In order to create a GmbH, the founder must open a deposit account with a Swiss bank. This is a bank deposit in which the capital of the company being formed is deposited pending registration in the Commercial Register. Once the minimum of CHF 20’000 has been deposited, the declaration of deposit is handed over to the notary who then proceeds with the founding of the GmbH. The funds remain blocked in the deposit account until the publication of the creation of the company in the Commercial Register. After the publication of the creation of the company in the Commercial Register, the funds are paid into the company's bank account. The supreme body of a GmbH is the assembly of the partners. Among other things, it determines the articles of association, appoints the company directors and the auditing body, approves the profit and loss account and the balance sheet, decides on the use of profits and discharges the company director (or directors).
The management of a GmbH corresponds to the board of directors in a AG. As a rule, all the partners have the right and the obligation to manage and represent the company jointly, but they can also be represented by a third person (not an associate).
The Limited Company (LC)
The AG is the most suitable legal form for those types of companies that have a high growth potential. An AG can be constituted by one or more natural or legal persons, who bring capital into the company which is broken down into partial sums (the shares).
For the commitments of the limited company only the corporate assets are liable, in case of bankruptcy, therefore, the entrepeneurs lose at the most their share capital. The mandatory capital of the company must amount to at least CHF 100’000, of which at least 20% must be paid in. It must, however, amount to a minimum of CHF 50’000. As many shareholders as wished may participate in the share capital. Shares may be registered or bearer shares; their nominal value must be at least one cent. The board of directors is the founding and supreme supervisory body of the AG and represents the company vis-à-vis third parties. The names of the directors are published in the Commercial Register. They are liable for any damage caused by them through a deliberate or negligent breach of duty. In order for the AG to be incorporated, at least one member of the board of directors with individual signing authority must be domiciled in Switzerland.
However, it does not matter where other board members or shareholders are resident. This means that the founders of an AG can be EU/EFTA citizens or from a third country; this does not matter for the formation of an AG. The annual general meeting of shareholders is the supreme body of the AG. Among other things, the general meeting determines the articles of association, appoints the board of directors and the auditors, approves or rejects the annual reports and decides on the use of company profits. In order to set up an AG, the founder must open a deposit account with a Swiss bank. This is a bank deposit in which the capital of the company being formed is deposited pending registration in the Commercial Register. Once the minimum of CHF 50’000 has been deposited, the declaration of deposit is handed over to the notary who then proceeds with the founding of the limited company.
The funds remain blocked in the deposit account until the publication of the creation of the company in the Commercial Register. After the publication of the creation of the company in the Commercial Register, the funds are paid into the company's bank account.
Shareholders' agreements
If more than one party is participating in the venture, it is best to have the relationships clearly defined in writing. Shareholder agreements provide such clarity. In fact, they regulate the relationship between shareholders outside of the bylaws, and therefore are not prescribed by law. The legal nature of shareholders' agreements is that of multi-lateral contracts with a common purpose. The common purpose is that of the stabilization of the ownership structure of an GmbH or AG. There are no "model shareholders' agreements" with general validity, as the relationships vary depending on the firm and the business needs. Our law firm can provide you with assistance in drafting a shareholders’ agreement suited to your needs.
Company location
To form a company in Switzerland, even foreign founders need a domicile in Switzerland. In Switzerland a distinction is made between a standard address and a c/o address. In the first case the company has its own office at that address, in the second case it only has a letter box. If the founder is not bound to a location, it is advisable to choose a canton that is less taxable. Duties to the domiciliary holder and taxes must be added up. It may therefore be worthwhile to choose a corporate domicile provider in a canton with slightly higher taxes.
Lexpat offers domiciliary services in the following cantons: Basel-Stadt, Schwyz, Nidwalden, Obwalden and Zug.
These are the most tax-efficient cantons for businesses in Switzerland.
Legal and administrative services offered by LEXPAT
Lexpat specializes in Corporate and Commercial Law with offices in Basel, Hergiswil, Sarnen, Zurich and Zug.
We are able to provide a wide range of assistance and consulting services in the field of Swiss commercial and corporate law, both at the time of incorporation and during all phases of ordinary and extraordinary management of legal entities.
We help entrepreneurs, SMEs and start-ups with passion. We position ourselves as a competent and cost-effective partner for the establishment, domiciliation and management of companies in Switzerland. In particular, we offer the following services:
Company incorporation in Switzerland
Company Domicile
Management and board member mandates; in addition to purely legal representation, we can also assist you with strategic, operational and administrative decisions to ensure the long-term success of your company. Our highly experienced experts are ready to assist you.
Upon request, we can take on additional organizational and administrative tasks for you. We will also be happy to provide you with the right specialists for fiduciary and tax matters.
Get in touch with us today for a free consultation!