Form a Swiss GmbH — the lean limited-liability company for foreign founders

A Swiss GmbH is a body corporate with separate legal personality and limited liability, sitting in the middle of the Swiss legal-entity ladder between a sole proprietorship and an AG. Its share capital is divided into quotas held by named partners. The GmbH is governed by the Swiss Code of Obligations (OR), Book 3, Title 28, articles 772 to 827. It acquires legal existence at the moment the cantonal Handelsregister publishes the incorporation entry, and it is dissolved only by statutory procedure. The French-language synonym in the cantons of Geneva, Vaud, Neuchâtel, Jura and Fribourg is Sàrl (Société à responsabilité limitée); in Ticino it is Sagl.

LLC, Sàrl, GmbH — is it all the same thing?

For a US or UK founder searching Switzerland LLC: the Swiss GmbH is the functional counterpart of a US LLC or a UK Ltd, but the tax mechanics differ. A Swiss GmbH is always a separate corporate taxpayer — it pays Swiss corporate income tax on its profit, and dividends distributed to partners are subject to 35% Swiss withholding tax before any treaty relief. A US LLC is by default a pass-through for US federal tax. So the legal concept lines up; the tax treatment does not. Most US founders coming into a Swiss GmbH therefore need tax advice on the US side as well.

GmbH in Switzerland vs Germany, Austria and Liechtenstein

The German GmbH has a minimum capital of EUR 25,000 and the Austrian GmbH EUR 10,000 (with EUR 35,000 of subscribed capital unless the privileged-formation regime applies). Liechtenstein also uses the GmbH name with its own capital rule set out in the Liechtenstein Personen- und Gesellschaftsrecht (PGR). The Swiss GmbH is its own legal form under Swiss law (OR art. 772 ff), with CHF 20,000 fully paid-in, and is not interchangeable with its neighbours even though the name is identical. When you read English-language guidance on "GmbH", confirm it is about Switzerland before applying any figure to your plan.

The defining number of the Swiss GmbH is CHF 20,000 of share capital, fully paid in at formation (OR art. 773, OR art. 777c) . There is no 20%-paid-in discount: the full amount goes on to a Swiss bank consignment account before the notary deed is signed, and the bank releases the funds once the Handelsregister confirms incorporation. This is a genuine working-capital constraint that the AG does not have, since an AG can be formed with CHF 50,000 paid in against a CHF 100,000 headline capital (OR art. 621, 632) .

Cash or in-kind: what counts

Cash is the fastest path. Contributions in kind — real estate, machinery, intellectual property, existing shareholdings — are also allowed under OR art. 777c and often make sense when the founders already hold business assets. The constraint is valuation: an independent auditor (Gründungsprüfer) must certify the value of in-kind contributions before the incorporation deed, and the certificate is filed with the Handelsregister. Planning on in-kind capital typically extends the formation timeline by 2 to 3 weeks because of the auditor step.

Minimum nominal value per quota

Each partner's stake is divided into quotas (Stammanteile) with a statutory minimum nominal value of CHF 100 per quota under OR art. 774. In practice the most common set-up for a small foreign-founder GmbH is a single CHF 20,000 quota per partner, or 20 quotas of CHF 1,000 each if the partners want granular transfers later without redrafting the statutes. We size the quota structure at the drafting stage so that your exit options (partner entry, partner exit, buy-back) are clean from day one.

What "fully paid-in" means in practice

If the capital is wired from abroad, the Swiss bank applies customer due diligence on the sender — source of funds, sender's identity, and beneficial-ownership chain. Expect 1 to 3 weeks of onboarding for foreign UBOs before the bank opens the consignment account. Once the funds land, the bank issues a capital-deposit confirmation (Kapitaleinzahlungsbestätigung) that the notary attaches to the incorporation deed. You can model the capital structure against an intended share plan using our capital-requirements calculator.

A Swiss GmbH must have at least one managing officer with sole or joint signing authority who resides in Switzerland (OR art. 814.3) . This is the single hardest constraint for non-resident founders, and the one area where Swiss commercial-register offices refuse filings when the residency test fails. Nationality is irrelevant. Domicile is what counts.

Three ways a non-resident founder satisfies OR art. 814.3

Option A — nominee director. Appoint a Swiss-resident managing officer supplied by a regulated fiduciary. Economic control stays with you; the signatory signs in a representative capacity bound by a written mandate. This is the most common route for first-time Swiss GmbHs owned from abroad. See our nominee director service.

Option B — relocate and self-sign. Apply for a Swiss residence permit (EU/EFTA citizens on freedom-of-movement; non-EU/EFTA citizens on the work-permit quota system), then sign as resident managing officer. This fits founders who intend to run the business from Switzerland anyway.

Option C — recruit a Swiss-resident co-founder. Bring in a partner or trusted employee who already lives in Switzerland. Joint signatory rights can be used to protect both sides: the Swiss co-signatory has OR 814.3 coverage, and you remain indispensable on the second signature.

What the signatory actually does

The Swiss-resident managing officer is not a rubber stamp. Under Swiss law they sign contracts that bind the GmbH, represent it before the Handelsregister, receive service of process, and carry fiduciary duties toward the company. A nominee arrangement is a mandate with meaningful duties attached; it is not a pass-through. Understanding this up front avoids surprise later — the officer has the legal pen, and the mandate scopes exactly what they will and will not sign.

Unlike the AG, a Swiss GmbH publishes its partners on the cantonal Handelsregister, together with the nominal value of each partner's quota . Anyone can search this via Zefix, the federal commercial-register portal. This single fact surprises many foreign founders, and if partner privacy is important to you we often recommend an AG for that reason alone.

What is on the public register

• Legal name and registered address.
• Purpose of the company (as drafted in the statutes).
• Partners and their quota nominal values.
• Managing officers and their signatory rights (sole or joint).
• Auditor, where one is appointed.
• An extract of the statutes.

What stays private

• Side-agreements between partners outside the statutes (shareholder agreements).
• Internal capital calls, loan arrangements, and employment contracts.
• Ultimate beneficial owners — except where AMLA UBO disclosure applies (see below).

UBO disclosure — the AMLA layer

Beneficial owners who control more than 25% of the GmbH must be declared to the company itself and to any financial intermediary handling the capital (typically the bank holding the consignment account), under the Swiss Anti-Money Laundering Act (GwG). This declaration is not published on the commercial register; it stays in the records of the GmbH and of the bank. The declaration is refreshed whenever the ownership chain changes.

A GmbH is small by design, so its governance rulebook is short — but every founder should understand three points before signing the statutes.

Governance bodies — partners' meeting and managing officer(s)

The partners' meeting (Gesellschafterversammlung) is the supreme organ under OR art. 804. It appoints managing officers, approves financial statements, amends the statutes, and decides on mergers or conversions. Managing officers (Geschäftsführer) under OR art. 809 to 811 run day-to-day operations and bind the GmbH by their signatures. In a single-partner GmbH, the one partner is both the sole member of the partners' meeting and (if self-signing) the sole managing officer.

Signatory rights — sole versus joint

Each managing officer holds either sole signature (Einzelunterschrift) or joint signature (Kollektivunterschrift zu zweien — two signatures required). Foreign-owner GmbHs frequently combine a Swiss-resident nominee with joint-signatory rights and a non-resident partner with joint-signatory rights. This setup prevents unilateral action by either side and is often a better comfort level for first-time arrangements than sole-signatory nominees.

Audit — why most small GmbHs opt out

Under OR art. 727 and 727a , a limited audit is the default. A full (ordinary) audit is required only when two of three thresholds are exceeded for two consecutive years: balance-sheet total CHF 20 million, revenue CHF 40 million, or 250 full-time employees. Below those thresholds, a GmbH with 10 or fewer FTEs can opt out of audit entirely if all partners consent in writing. Most foreign-founder GmbHs in our pipeline opt out at formation and revisit if they cross the 10-FTE line.

A GmbH can be converted into an AG without liquidation under the Swiss Merger Act (Fusionsgesetz, FusG art. 53 ff). The usual triggers are an incoming external investor, a capital raise that needs share-class flexibility, or an IPO path that requires private shareholders. Mechanically, the conversion requires a notarised partners' resolution, a top-up of share capital from CHF 20,000 to at least CHF 100,000 (the AG minimum under OR art. 621), and a new Handelsregister filing that replaces the GmbH register entry with the AG entry. The legal personality continues unbroken (FusG art. 53). For most foreign-founder GmbHs this is a 4 to 6 week project and is worth keeping in mind at formation so that the statutes do not need to be rewritten from scratch when the moment comes.

A Swiss GmbH is a going concern the day the Handelsregister publishes its entry. The first twelve months carry four recurring obligations every foreign-founder GmbH has to plan for.

VAT registration — the CHF 100,000 threshold

If worldwide taxable turnover exceeds CHF 100,000 per year, the GmbH must register for Swiss VAT with the Federal Tax Administration (ESTV) under MWSTG art. 10 . Foreign operators making any supply in Switzerland are liable from the first Swiss franc of turnover and must usually appoint a fiscal representative. The standard VAT rate is 8.1%; reduced (2.6%) and accommodation (3.8%) rates apply in specific sectors. Full walk-through in our Swiss VAT page.

AHV / AVS social insurance on officer salaries

First-pillar pension contributions (AHV / AVS) are due on salaries paid to managing officers and employees. Contributions are split between employer and employee; the GmbH handles registration with the cantonal AHV office and monthly payroll declarations. Typical officer-salary contribution levels are re-confirmed annually by the federal social-insurance office; we build the payroll set-up into the first-year engagement.

35% withholding tax on dividend distributions

Dividends distributed by a GmbH to its partners are subject to 35% Swiss withholding tax at source . Swiss-resident partners recover the full amount via the annual tax return if they declare the income. Non-resident partners rely on the Swiss double-taxation-treaty network for reductions — for example, a US corporate parent on a 10%-plus shareholding typically drops to 5%. This is a planning point at formation, not an afterthought.

Accounting and annual filings

The GmbH is bound by the Swiss Code of Obligations book-keeping rules (OR art. 957 and following). Annual financial statements, a partners'-meeting minutes file, and a tax return are due every year. We hand off to our Swiss accounting service for ongoing compliance after formation.

We do not publish a price list for GmbH formation. Fixed-price packages on fiduciary sites look reassuring, but they almost always either under-scope (bank-account onboarding, UBO documentation, apostille courier, canton variation) or price the average client. Every engagement here is scoped on the facts, quoted in writing, and fixed before any invoice.

Scope of a typical GmbH formation engagement

• Pre-formation review of planned activity, canton, partner structure and capital source.
• Drafting of articles of association, partners' resolutions, powers of attorney.
• Notary coordination, consignment-account opening, and capital-deposit confirmation.
• Handelsregister filing with the canton of your choice.
• VAT registration with ESTV, where thresholds are met.
• AHV / AVS social-insurance registration with the cantonal office.
• Hand-off to first-year accounting and payroll (separate engagement).

How we scope your quote

Send us planned activity, canton preference, number of partners, capital source and residency, and banking preferences. Within 2 to 3 business days we return a written proposal with a fixed fee, the full scope, and any items priced separately. See how we scope and quote our engagements for the general model.