Switzerland Company

Legal form:

There are two forms of companies in Switzerland most commonly used by foreign investors: Aktiengesellschaft-AG or Societe anonyme-SA-public stock corporation and Gesellschaft mit beschrankter Haftung-GmbH or Societe a responsabilite limitee-Sarl private limited liability company.

Swiss Company name: Any name not already registered may be chosen. Names such as Switzerland, International, European, etc. are subject to certain conditions. Name must end with suffix AG/SA or GmbH/SARL depending on the type of the company.

Usual minimum capital: AG/SA – CHF 100,000. A minimum of 20% of the nominal value of the share capital or CHF 50,000 (whichever is higher) should be paid in cash or in kind. The share capital is transferred to a blocked account at a Swiss bank to be held in the name of the company until the company is registered. GmbH/Sarl-CHF 20,000 of which 50% must be paid up before incorporation.

Formation procedure: An organizational meeting of the shareholders is held during which the founders adopt the bylaws, subscribe to all the initial shares, elect the members of the initial board of directors and the auditors, and have the minutes of the meeting notarized. The company must be registered in the Commercial Register at the site of its headquarters. The headquarters site should also be specified in the bylaws. A registration application must be prepared and signed by all board members and signatories and sent to the Commercial Register together with the notarized minutes of the founders' meeting and additional required information. This information includes the corporation's legal address, a statement of acceptance of office and duties by the board members and auditors, disclosure of the nature of the initial capital contribution of the founders (whether in cash or in kind), major assets to be acquired and a statement of non-violation of the Statute on Acquisition of Real Estate by Foreigners. The corporation becomes a legal entity when it is entered in the Commercial Register.

Minimum number of shareholders: AG/SA – the company must have at least three shareholders (who may act in a fiduciary capacity), but this requirement has no practical consequences after the formation of the corporation. Shares may be issued in the shareholder's name (registered shares) or to the bearer (bearer shares), which should be wholly paid. A AG/SA company can issue both types. Par value of each share must be at least CHF 10. Although each share is allowed one vote, the bylaws can establish that the right is not accorded proportionally to the par value. The par value of other shares may not exceed ten times the par value of shares granting privileged voting rights. Swiss corporate law also provides for other equity instruments, such as participation certificates, which are similar to shares but lack voting rights. Within the limits allowed by law, a company may restrict the transferability of its registered shares.

GmbH/Sarl has no shareholders as such, as the company is not permitted to issue shares in the sense of securities. It has a register of its quota holders and their part of the capital; at least two quota holders must be registered.

Minimum number of directors: AG/SA minimum one director is required. Corporate bodies are not permitted. At least one director must be a Swiss resident and the majority of board members must be Swiss nationals residing in Switzerland. GmbH/Sarl – minimum one director is required. At least one director must be a Swiss resident.

Taxation: Switzerland is divided into 26 cantons, and each canton has its' own tax system. In general, in Switzerland there is a three-level tax system: 1) At a federal level – the federal profit tax (3.63 % – 9.8 %) and taxes to export of the capital (35 %); 2) On canton level – the basic profit tax (20 % – 35 %); 3) Communes assess incomes, basically in percentage terms from canton taxes. Depending on a kind of carried out activity, such as the company (holding, administrative and another) and canton where the company is registered, are applied various rates of taxes to incomes.

Registered address: All companies registered in Switzerland must have registered address in Switzerland.

Annual reporting and audits: All Swiss companies must be audited annually. Elected by the shareholders' meeting, the auditors can either be an independent person or a company and must be domiciled in Switzerland. The auditors, which should be independent of the company, examine the books and the annual financial statements in order to submit their report at the shareholders' meeting. Accounts must be filed each year with the Companies Registration Office.

Time needed for Switzerland company formation: usually 2-4 weeks