Relocation of your company domicile in Switzerland: benefits, risks and procedures
Moving your Swiss company from one canton to another can of course happen in a variety of scenarios. Entrepreneurs are often particularly interested in moving the legal seat of their company to the canton of Zug due to numerous advantages of a company headquarter in Zug.
However, the transfer of the registered office of a LLC (GmbH) or Ltd (AG) should well planned and carefully considered. There are some risks for certain structures and faux pas in the timing of this endeavor, which you should be aware of.
In this article, we look at the most important aspects of the relocation of legal domiciles of Swiss companies, with a particular focus on the canton of Zug.
This article is not about the transfer of headquarters of foreign companies to Switzerland. Although this is theoretically possible, it is often not permitted, as one of the criteria is that the company also transfers its main business activity to Switzerland. For most entrepreneurs with companies outside Switzerland, it is therefore more plausible to found a new company in Switzerland. All criteria for transferring the registered office of foreign companies to Switzerland can be found in this official leaflet of the canton of Zug.
Definitions and differentiation “company seat” and “legal domicile”
These two terms are often not understood correctly, with the definition of the SME portal not sufficiently resolving the common misunderstanding.
The company's seat is the location from which the administration of a company is managed, for example the municipality of the city of Zug in the canton of Zug. The legal domicile is located at the location of the company's seat and describes the official address at which the company can be reached. Both terms therefore refer to the same place, namely the place where the company can be reached by post and is taxed. The legal domicile simply contains more details, namely the exact address.
Seat of the company:
Zug, Zug
Legal domicile:
Untere Roostmatt 8
6300 Zug
We make use of both terms interchangeably in this article.
Relocating your company within a municipality in the same canton
When moving your business domicile within a municipality in the same canton, the process is very straight forward, as the change simply has to be reported to the relevant commercial registry. This can happen with a short letter.
You simply need to write a short letter informing about the new address and giving your company name and company identification number (UID). This letter must be signed by a person with signing authority for the company. This original letter, together with proof, must be sent to the commercial registry of the respective canton.
In the case you have your own office space and therefore an own business address at the new location, the proof should be a copy of the rental agreement. If you do not have your own offices at the new address, the letter must be accompanied by a declaration of acceptance from the owner of the domicile.
Since the beginning of 2024, company mutations, such as the relocation of the legal seat of a company, can also be done through the EasyGov.swiss online help desc. However, you first need to create a user account and submit an application for a power of attorney for your own company. Since this process is finally completed with a code sent to you by post, this can also take a few days.
Relocating your company to another canton
Relocating your legal domicile to another canton, such as from Schwyz to Zug, requires an amendment to the articles of association. The same applies to moving the domicile within a canton, but across municipal borders (e.g. from the municipality of Baar to the municipality of the city of Zug).
You can read how this works below in the section on the formalities of moving company headquarters. But now on to the important aspects and potential risks of this endeavor.
Tax aspects of relocating your company within Switzerland
In the year of relocating the official seat of a legal entity, taxes must be paid on a corporate basis in both cantons in proportion to the company's residence in the respective location. If your company moved from the canton of Aargau to the canton of Zug on April 1, 2024, one third of the profits and capital of your company for 2024 will be taxed in Aargau and three quarters in the canton of Zug.
By the way, this is different for natural persons (private residencies). As a natural person, you are 100% taxable in every year at the place you are residing on December 31 of each year (source: Canton of St. Gallen).
Benefits and risks of moving the company headquarters to the canton of Zug
Because of its attractive tax laws, international labor market, service-oriented business sector and high quality of life, the Canton of Zug is often the best choice for your company's seat.
However, you should be aware that not all of these benefits are fully available to you and that depending on your entire setup, it can potentially not make sense.
An example:
You are the sole shareholder of a GmbH in the canton of Zurich, where you live. You pay yourself a salary and do not employ any other people in their company. You want to save taxes and are therefore move your company's legal seat to Zug.
This is not illegal, as every Swiss company is merely required to have one person residing in Switzerland who can legally represent the company, namely, has a signing authority.
Although the relocation in this example is completely legitimate under the Swiss Code of Obligations, the tax authorities may see it differently. Zurich's authorities can therefore claim that the company should be taxed there and that its legal domicile therefore belongs to Zurich.
The argument on the part of the tax authority is that a company must be domiciled where its effective management takes place. So if you live in Zurich and are the sole shareholder, the tax office of your canton of residence can request proof that you are working in Zug. The following evidence can be looked at:
- Do you have your own office space in Zug so that working from there is even possible?
- Can you prove that you travel regularly to Zug (SBB tickets, fuel receipts, expense receipts, etc.)? Depending on whether you are working full time or only part time, these documents should be correspondingly extensive.
- Are all important management decisions made in Zug? Do the minutes of shareholders' meetings etc. prove this?
Should, after such an audit, the tax authorities come to the conclusion that the company is actually taxable in Zurich, you may be subject to fines and subsequent tax invoices from the canton. This would be seen as attempted tax evasion, which isclassified as a misdemeanour in Switzerland (and not as a criminal offense!).
The above list already reveals how one could minimize the risks associated with such an assessment by the tax authorities. In addition, companies will look to hire from within Zug, especially for relevant functions (e.g. Chief Officer) that usually hold signing authority in the company. Lastly, some companies will get a local director to join their board.
In many cases, however, this effort will barely be worthwhile compared to the tax savings. Especially when you consider that salaries and dividends are still taxed at the beneficiary's place of residence.
Formalities of moving your company domicile in Switzerland — here's how it works
When moving the company seat to another municipality or canton, the following documents must be submitted to the commercial register office:
- Resolution on the amendment to the articles of association in the form of a public document of the resolutions of the shareholders' meeting
- Certified copy of the new articles of association
- Commercial register application including certified signature of the person making the declaration
As soon as these documents have been received in correct form by the new canton's commercial registry, it usually takes around 2 weeks until the change is officially visible and the legal seat of your company is officially moved.
By the way, the commercial register often sends an 'akonto' invoice to the new domicile address to verify that the company can actually be reached there. In this case, the relocation will only be finally published once this invoice has been paid.
The new commercial registry office automatically informs the office of the former canton to delete the entry of your company on their part.
Should you decide to move your company domicile to us in Zug, we would be happy to prepare these formalities and coordinate a suitable appointment for you with one of our local partner notary offices.
Costs of moving company headquarters to Zug
As is often the case with legal formalities, the notary fee is the main cost factor. As a rule, notary fees amount to around CHF 800, provided that only the company headquarters is changed and no further changes (e.g. changes in purpose or changes of registered persons) are made.
However, if you are also planning the shareholder structure, a capital increase or any other change to be notified anyway, it is definitely worthwhile to do this together with the transfer of registered office.
Furthermore, the commercial register charges fees in connection with the processing of the transfer of registered office. The fees of the commercial register amount to:
- CHF 30 for canceling the old domicile and registering the new domicile
- CHF 45 for issuing a new certified extract from the commercial register
A list of all fees charged by the Swiss commercial registers can be found here.
We offer new members of our office community the service of preparing all necessary documents for the relocation to Zug free of charge. If you need us to represent you at the notary during the certification of the company relocation, extra fees may apply.
To conclude
The relocation of a company's legal seat to the canton of Zug can offer considerable advantages. However, it is important to plan the process carefully and comply with all legal requirements. With the right preparation and professional support, the change of your domicile can go smoothly and open up new business opportunities.
We would be happy to advise you on your specific case. Contact our friendly team anytime.