Limited Liability Company (GmbH)
Gesellschaft mit beschrankter Haftung
Company formation in Switzerland
The GmbH is best suited for: Small and medium enterprises operating in Switzerland, Foreign founders seeking a Swiss operating company, Consultancies, tech companies, and professional services firms, Companies targeting the DACH market from a Swiss base, Businesses that want Swiss credibility without the AG capital requirement. Swiss corporate taxation operates at three levels: federal, cantonal, and municipal. The federal corporate income tax rate is 8.5% (effective ~7.83% after deductibility). Cantonal and municipal rates vary significantly โ the combined effective rate ranges from 11.9% in Zug to 21.6% in Bern. A participation reduction (Beteiligungsabzug) reduces tax on qualifying dividend income and capital gains from substantial shareholdings (10%+ or CHF 1 million fair market value). The Swiss patent box regime (introduced under TRAF 2020) offers up to 90% reduction in cantonal tax on qualifying IP income. An additional R&D super-deduction of up to 150% of qualifying R&D expenditure is available at the cantonal level. VAT applies at 8.1% (standard rate), with reduced rates of 2.6% and 3.8% for certain goods and services.
- Small and medium enterprises operating in Switzerland
- Foreign founders seeking a Swiss operating company
- Consultancies, tech companies, and professional services firms
- Companies targeting the DACH market from a Swiss base
- Businesses that want Swiss credibility without the AG capital requirement
Key Facts
Step-by-Step Formation Process
Reserve company name and draft articles
Check name availability through the Central Business Name Index (Zefix) and draft the articles of association (Statuten). The articles must be in one of Switzerland's official languages and define the company's purpose, capital structure, and governance.
Deposit share capital with a bank
Open a capital deposit account (Kapitalsperrkonto) at a Swiss bank and deposit the full CHF 20,000 minimum share capital. The bank issues a confirmation of deposit, which is required by the notary for incorporation.
Execute the notarial deed of incorporation
The founders appear before a Swiss notary (or authorise a representative via power of attorney) to execute the public deed of incorporation (offentliche Urkunde). The notary certifies the articles, the capital deposit confirmation, and the appointment of directors and auditors.
Register with the Commercial Register
The notary files the incorporation with the cantonal Commercial Register (Handelsregister). The company is legally formed upon entry in the register. Registration includes details of directors, capital, and the company purpose.
Register for tax with cantonal and federal authorities
Register for federal corporate income tax (direct federal tax), cantonal and municipal taxes, VAT (if turnover exceeds CHF 100,000), and social insurance contributions (AHV/IV/EO). The canton of incorporation determines the cantonal tax rate.
Convert capital deposit account to operating account
Once the company is registered, present the Commercial Register excerpt to the bank to release the capital deposit and convert it into a regular business operating account.
Required Documents
- Public deed of incorporation (offentliche Urkunde)
- Articles of association (Statuten)
- Bank confirmation of capital deposit (CHF 20,000)
- Passport or national ID of all founders and directors
- Proof of address for all founders and directors
- Declaration of acceptance by directors
- Proof of registered office address in Switzerland
- Auditor appointment letter (or opting-out declaration if qualifying)
Cost Overview
Tax Treatment
Swiss corporate taxation operates at three levels: federal, cantonal, and municipal. The federal corporate income tax rate is 8.5% (effective ~7.83% after deductibility). Cantonal and municipal rates vary significantly โ the combined effective rate ranges from 11.9% in Zug to 21.6% in Bern. A participation reduction (Beteiligungsabzug) reduces tax on qualifying dividend income and capital gains from substantial shareholdings (10%+ or CHF 1 million fair market value). The Swiss patent box regime (introduced under TRAF 2020) offers up to 90% reduction in cantonal tax on qualifying IP income. An additional R&D super-deduction of up to 150% of qualifying R&D expenditure is available at the cantonal level. VAT applies at 8.1% (standard rate), with reduced rates of 2.6% and 3.8% for certain goods and services.
Pros & Cons
- Swiss credibility and reputation โ one of the world's most respected business jurisdictions
- Canton-dependent tax rates allow significant optimisation (Zug at 11.9% is globally competitive)
- CHF 20,000 capital is substantial but manageable โ signals commitment to counterparties
- Stable political and economic environment with strong rule of law
- Excellent banking infrastructure โ Swiss bank accounts carry global credibility
- Bilateral agreements with the EU provide significant (though not full) market access
- Strong IP protection and well-developed patent and trademark systems
- Small companies can opt out of mandatory audit (under 10 FTEs, CHF 20M turnover, CHF 10M assets)
- CHF 20,000 minimum capital must be fully paid up โ no partial deposit option
- Notarial deed requirement adds time and cost (CHF 1,000โ3,000)
- At least one director must be resident in Switzerland (Swiss resident or Swiss-domiciled)
- Shareholder identities are registered in the Commercial Register (less privacy than AG)
- High cost of living and business operations โ office space, salaries, and services are expensive
- Not an EU member โ some trade barriers remain despite bilateral agreements
- Banking fees are high (CHF 100โ500/month for business accounts)
Other Structures in Switzerland
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