Swiss company formation

In Switzerland it is possible to register both Joint-stock companies (AG) and Limited liability companies (GmbH/SARL). The legal address of the company has to be valid address in the territory of Switzerland. It is important to consider that information indicating company’s activity corresponds with the actual activity of a company.

Features of Swiss “AG”

One or several natural or legal persons can found a joint – stock company, and at least one person has to be a shareholder. The share capital shall be not less than 100 000 Swiss francs. It is important to remember that at the time of registration at least 50% of shares (not less than 50 000 Swiss francs) have to be paid-in.

Managing body of Swiss “AG” is Board of Directors, which needs to be formed by one or several members not obliged to be shareholders.

At least one member of the company, authorized to the act on behalf of “AG”, has to live in Switzerland.
Data on beneficiary is confidential, however information on Board of Directors is publicly available.

“AG” can issue ordinary shares, preference shares, shares with and without vote, shares with par value and bearer shares. Registered stocks are entered in the Register of Shares.

Features of Swiss “GmbH”

The limited liability company (GmbH) is a company formed by one or more natural persons or trading societies. Each founder owns one or more shares in authorized capital with par value not less than 100 Swiss francs.

Authorized capital has to be 20 000 Swiss francs and fully paid-in.

All shareholders have the right to manage a company therefore; at least one of them has to be a resident of Switzerland. CEO bears full responsibility of a company. Data of each founder, including those who gets shares in “GmbH” after it has been incorporated, is publicly available.

Taxation of Swiss companies

The taxation in Switzerland is carried out at the federal, cantonal and municipal levels.

The federal rate of income tax on profit is 8.5% of taxable income, although this rate makes up only 7.8%. The tax on capital at the federal level does not apply.

Cantonal taxes on capital fluctuate from 0.01% to 0.6%. The rate of tax on capital is applied on the share capital, free reserves, retained earnings, legal reserves, and on the hidden reserves created from taxable profit.

The standard value added tax rate is 8%. VAT at the cantonal level does not exist.

The tax on dividends paid by the Swiss company to foreign shareholders makes up 35%. This rate can be lowered by the international tax agreement of Switzerland with the country of location of the shareholder of the company. However, if the shareholder is, for example, the offshore company, then from a taxable profit.

The standard rate of a tax on the added cost composes 8%. The VAT at the cantonal level doesn’t exist.

The tax on dividends paid by Swiss company to foreign Shareholder is 35%. This rate can be lowered by the International Tax Agreement of Switzerland with a country of location of a company’s shareholder. However, if a shareholder is, for example, offshore company, the tax levied at the full rate.

Switzerland has more than 80 Agreements on avoidance of the double taxation with different countries.

Accounting and audit of Swiss companies

Accounting and annual audit are obligatory for both types of the Swiss companies.

Nominee services

An appointment of the nominal director and shareholder is allowed.

Opening a bank account for Swiss company

Usually Swiss companies open accounts in Swiss banks. Director of the company, who is the resident of Switzerland, manages the bank account of the company.
It is important to keep in mind that every bank account opening procedure is individual and depends on the accuracy and timeliness of information and documents provided by the client.