Starting a Limited Liability Company in Switzerland: A Comprehensive Guide

The decision to establish a limited liability company (LLC, GmbH) in Switzerland is the first step for entrepreneurs on the way to realizing their business ideas in one of the most stable and business-friendly countries in the world. Switzerland not only offers a central location in Europe, but also an attractive economic climate, political stability and excellent infrastructure. These factors make the country an ideal location for setting up a limited liability company.

How does a Limited Liability Company work in Switzerland?

The limited liability company (LLC, GmbH) is a popular type of company in Switzerland, in which the liability of shareholders is limited to their contributions.

The LLC is a capital company which, due to its flexibility and relatively easy handling when setting up and managing it, is often the optimal form of company, especially for small to medium-sized companies. It enables shareholders to pursue their entrepreneurial goals while protecting their personal assets.

When is an LLC the right choice of company type?

A LLC is particularly suitable for small to medium-sized companies that strive for a professional and established presence on the market and value flexibility in corporate management and raising capital. However, it is less suitable for sole proprietors with low turnover or when the annual administrative and managerial tasks are too high compared to the volume of business. The GmbH is also not suitable if several shareholders do not want to be visible in the public company register but want to remain anonymous. In this case, it is worthwhile to set up an AG. More information on choosing the right company form can be found in our article on the overview of legal forms in Switzerland.

The legal basis of an LLC in Switzerland

Legally, the establishment of an LLC in Switzerland is enshrined in the Code of Obligations (OR). In particular, Articles 772 et seq. OR regulate the formation, structure, operation and dissolution of a LLC. The regulations contained therein provide a legal framework that provides both shareholders and third parties with the necessary security.

Establishing a LLC in Switzerland is therefore a serious consideration for entrepreneurs who are looking for a balance between limited liability and entrepreneurial flexibility. In the next section, we will review the preparatory steps that every founder should consider before the official founding process.

Preparations to setting up a limited liability company in Switzerland

Careful planning is the be-all and end-all when setting up a LLC. Before you begin the official incorporation process, there are a few important considerations you should make and the steps you should follow.

Costs of setting up an LLC in Switzerland — minimum capital requirement

The costs of establishing a LLC consist of notary fees, commercial register fees and capital contributions. The minimum capital requirement is 20,000 CHF, which can be paid either in cash or in kind. It is advisable to draw up a detailed financial plan to take into account all expected costs and avoid surprises.

Business plan and strategy

A well-thought-out business plan is the cornerstone of every successful business. It should include a clear vision, detailed market analyses, sound financial planning, and a feasible marketing and sales strategy. This plan not only serves as a roadmap for corporate governance, but also as a crucial document for potential investors and banks.

Choice of company name

The name of your LLC should be unique and meaningful. It must also comply with certain regulations of the commercial register office and should ideally reflect the company's purpose. It is important to check early on whether the desired name has already been given or is protected by trademark law in order to avoid subsequent conflicts. This can easily be done by searching the Swiss company registry.

The preparatory measures create a solid basis for the smooth establishment of your LLC. In the next part, we will look at the actual founding process in detail, starting with the necessary documents and ending with going to the notary.

The process of setting up an LLC in Switzerland

After the preparations have been completed, the formal founding process of your LLC begins. This process is regulated in detail by Swiss Code of Obligations and requires compliance with certain steps and formalities.

Necessary documents and formalities

This includes the articles of association, the articles of association and other relevant documents.

Establishing a LLC in Switzerland requires the preparation of several important documents. This includes:

• the declaration of acceptance of domicile
• the social contract
• the statutes of the LLC
• the declarations of approval from the managing directors and shareholders
• proof of payment of share capital.

Each of these documents must meet specific legal requirements and be carefully prepared. Depending on the nationality of the shareholders, further documents may be required.

Office Group Zug can support you in this process to ensure an efficient and smooth process.

Certification of the incorporation at the notary

The notarization of the incorporation documents is an essential step towards setting up your LLC. All shareholders must be present at the signing, either personally or through an authorized representative. The notary checks the documents for legality and ensures that all legal requirements are met.

With the successful notarization of the founding documents and the registration of the GmbH in the commercial register, the company officially begins to exist. These legal steps give the new company its legal personality and are decisive for protecting shareholders and managing directors.

Registration of the limited liability company in the commercial register

After the notarial steps have been completed and the financial resources have been secured, the LLC is formally registered in the commercial register. This is a decisive step, as the GmbH only legally exists and becomes able to act with this registration.

Registration in the commercial register is mandatory and requires a number of documents:

• The public document of incorporation
• The statutes of the limited liability company
• The signature rights of managing directors
• Confirmation of payment of share capital
• Evidence of compliance with legal organizational obligations

Detailed cost statement for setting up an LLC in Switzerland

The total costs of setting up a LLC in Switzerland consist of various fees and contributions and can vary significantly depending on the complexity of the founding process and the necessary advice.

The main items of start-up costs include:

• Notary fees for notarizing the founding documents (unavoidable, between CHF 500-1500)
• Fees for registration in the commercial register (unavoidable, between CHF 200-300)
• Bank charges for opening the capital payment account (unavoidable, between CHF 100-350)
• Consultation costs if professional help is sought (avoidable)
• Costs for preparing the business plan and other founding documents (avoidable)

It's important that founders create a detailed financial plan that takes into account all anticipated costs and capital requirements to avoid surprises.

Key legal considerations

Before the LLC can be entered in the commercial register, founders must ensure that all legal requirements are met. This includes the appointment of the management and, if applicable, an auditor, as well as compliance with reporting requirements and proof of the place of business.

When entered in the commercial register, the LLC receives its commercial register number and thus becomes part of official economic life in Switzerland. The commercial register entry is public and provides transparency for business partners and customers.

Tax obligations and operation of a limited liability company

After incorporation, regular administrative costs, accounting, tax advice and, where applicable, employee salaries must be considered. The LLC must pay corporation tax, value added tax, withholding tax and capital tax. Correct bookkeeping and the preparation of annual financial statements are essential.

Operating a limited liability company in Switzerland

After successful establishment and registration in the commercial register, the day-to-day running of a company begins. There are a number of legal obligations that a GmbH in Switzerland must comply with in order to maintain its operations and act in accordance with the law.

Tax obligations of an LLC

As a legal entity, the limited liability company is taxable and must pay certain duties. The tax burden may vary from canton to canton, as the cantons in Switzerland have their own tax laws. Key tax obligations include:

• Corporation tax on company income
• Value added tax (VAT), provided that the turnover exceeds CHF 100,000 per year
• Withholding tax on dividends and certain interest rates
• Capital tax on the share capital and reserves of the LLC

Accounting and financial statements

Maintaining correct bookkeeping is essential for every LLC in Switzerland. This not only serves to provide an overview of the company's financial situation, but must also be proven to the tax office and in the event of an audit. The legal requirements include:

• Continuous recording of all business transactions
• Preparation of annual financial statements including balance sheet, income statement and notes
• Certain size criteria require an ordinary audit by an auditor

The annual financial statements must be prepared and published within a certain period of time after the end of the financial year. By carefully observing accounting requirements and tax regulations, the LLC ensures its credibility and trustworthiness with business partners, investors and authorities.

Checklist for setting up an LLC in Switzerland

Frequently asked questions when founding a limited liability company

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Do not hesitate to contact the Office Group Zug team for a non-binding consultation regarding your planned GmbH formation. We will be happy to help you.