Company Formation in Switzerland in 2018

The Swiss economy is known as being solid because of the high-quality value in production and of the highly skilled and trained workforce. Some of the top industry sectors in Switzerland are financial sectors, such as bank and insurance, the pharmaceutical industry, nanotechnology and biotechnology. The majority of the workforce is employed in small and medium sized companies and in the tertiary sector.

Although it’s a small country and with few raw resources for manufacturing purposes, the prosperity of the Swiss economy is based mainly on external trade activities. The domestic market is rather small, having a population of just 7.8 million people, thus Swiss companies are focused on providing products and services for external markets.

External markets are important to help Swiss companies make enough profit after the investments in research and development and in the production process. Luckily, the Swiss government support R&D activities through various policies. Having strong commercial ties with most industrialized countries from all over the world, Switzerland has established its position of one of the most developed states on global level.

Considering all these aspects, Switzerland is one of the most attractive business locations and it’s widely considered the best European location to start a company. For the year of 2018, entrepreneurs interested in company formation should consider opting for the most common business structures in Switzerland, the private limited company (GmbH) and the public limited company (AG).

Company formation in Switzerland – the GmbH

The GmbH has the same business structure of a private limited liability company that can be founded by one or more individuals or legal entities. The minimum required share capital is 20,000 CHF. The company is liable only to the extent of the fully deposited share capital.

Necessary documents for setting up a GmbH include identification documents, proof of residence, bank statements, a business plan and the articles of association notarized by a certified Swiss notary.

All the companies registered as GmbH must have this particle in the ending of their name. It’s mandatory to have a registered office in Switzerland and a bank account with a Swiss bank – which is also needed to deposit the share capital upon the company’s registration.

The founder or founders of the GmbH don’t have to be Swiss residents, but they need to have a Swiss representative in front of the Swiss authorities, business partners and clients, a person who also serves as a contact point for all of the above.

Company formation in Switzerland – the AG

This type of company is similar in structure with a corporation and it has the great advantage that it can be used for various business purposes, including commercial activities, for multinationals or large corporations.

The AG can be formed by at least one individual or legal entity and it requires a minimum share capital of 100,000 CHF, from which 20% or at least 50,000 CHF must be paid up upon the company’s registration.

In comparison with the GmbH, the AG has the disadvantage of being less flexible, in the sense that the content of the company’s statue is stipulated by the Swiss law in a considerable number of areas.

Although the company’s founder or founders may be foreign citizens, 50% of the directors from the board must be Swiss citizens or resident of Switzerland.

Both business structures provide limited liability for the founder or founders and the option to transfer shares to different beneficiaries. In the case of a GmbH, the process of transferring shares is more difficult.

For a Swiss AG, the governing bodies consist of company shareholders that make decision through general meetings, a board of directors and company auditors (annual audits are required).

Regardless of which type of company is formed in Switzerland, the fastest and easiest way to go through the company formation process is to acquire support from a firm specialized in Swiss company registration.

When necessary, the firm can provide additional staff, such as Swiss company directors, auditors, accountants or secretaries and even set up a registered office in Switzerland for the new company. Click here for more info on company formation in Switzerland and any other Swiss business aspects you might be interested in.

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