Company Formation in Switzerland

Key Steps in Company Formation

1. Choose a Business Structure

Switzerland offers various business structures, including:

• Sole Proprietorship: Ideal for small businesses or freelancers, this structure has minimal administrative requirements.
• Limited Liability Company (LLC or GmbH): A popular choice for small to medium-sized businesses, offering limited liability for shareholders.
• Corporation (AG or SA): Suitable for larger businesses, this structure offers the ability to issue shares to raise capital and attract investors.

2. Choose a Company Name

The name must be unique, clearly distinguishable from other registered companies, and comply with Swiss regulations. A company name must also reflect the nature of the business.

3. Draft the Articles of Association

The Articles of Association outline the rules for the company’s operation, including its purpose, capital structure, and governance. These must be notarized.

4. Deposit the Share Capital

For a GmbH or AG, a minimum share capital is required:

• GmbH: CHF 20,000 (of which CHF 1 is payable upfront)
• AG: CHF 100,000 (with at least CHF 50,000 paid in)

5. Register with the Commercial Register

Once the company has been established, it must be registered with the Swiss Commercial Register. This step officially marks the company’s legal existence.

6. Open a Business Bank Account

A Swiss business bank account is necessary for managing company finances. The bank will require the company’s incorporation documents, proof of identity for directors and shareholders, and a business plan.

7. Obtain Permits and Licenses

Depending on the nature of your business, specific permits or licenses may be required. For instance, businesses in regulated industries like finance or health need additional authorization.

Advantages of Starting a Business in Switzerland

• Business-Friendly Environment: Switzerland ranks high for ease of doing business, with low administrative burdens and transparent regulations.
• Stable Economy: Switzerland has one of the most stable economies globally, with a strong currency and solid financial system.
• Attractive Tax System: Corporate tax rates in Switzerland are competitive, with some cantons offering favorable tax conditions to attract businesses.
• Skilled Workforce: Switzerland is home to a highly skilled and educated workforce, making it ideal for businesses looking to hire talent.

Types of Businesses Suitable for Switzerland

• Startups: Due to a favorable tax system and business infrastructure, Switzerland is an ideal location for tech startups and innovative ventures.
• Family Businesses: The legal framework is conducive to family-owned businesses, especially in regions such as Ticino and Zurich.
• International Companies: Multinational corporations often choose Switzerland for its central location in Europe and international trade agreements.