The Switzerland Civil Code governs all commercial entities, but there is no centralized federal registration system. Each of the 26 Swiss cantons has its own Commercial Register, where newly-formed companies must be registered, depending on their domicile. One of the most common types of companies incorporated in Switzerland is the AG, a business structure similar to the one of a corporation. Foreign citizens are allowed to incorporate a Swiss corporation and own all the shares.
Swiss corporation benefits
The main benefits of the Swiss corporation and what makes it so attractive for foreign citizens that want to open a company in Switzerland are the following:
- Foreign citizens can incorporate and own all the shares of a Swiss corporation;
- The names of the shareholders are not listed in the public register and may remain anonymous;
- Nominee shareholders and company directors may be appointed to preserve the anonymity of the shareholders and to serve as legal representatives in front of authorities;
- Bearer shares may be issued in order to protect the privacy of the shareholders of the Swiss corporation;
- A Swiss corporation can be formed by only one shareholder;
- A Swiss corporation may have only one director who can also be the sole shareholder.
Company names for Swiss corporations
The main condition to choose the name of the AG is to opt for a name that is not similar with any other legal entity registered in Switzerland. The name availability can be verified with the Company Registry prior to the incorporation procedure.
The other condition is to end the company name with either the word "Aktiengesellschaft" or the abbreviation "AG".
Swiss corporation formation procedures
The Swiss corporation must be registered with the Swiss Company Registry and with the Swiss Commercial Registry. The founder or founder must appear before a notary to sign the company documents, which must include the Articles of Association and the Public Deed of Incorporation.
The documents are notarized and sent to the register. After that, a registration certificate is issued for the new company.
The registration process is relatively quick and the founder can appoint legal representatives to appear in front of the notary for the incorporation procedure.
The Articles of Association
The Articles of Association drafted for the incorporation of a Swiss corporation must include the following information:
- The name of the company;
- The address of a registered office in Switzerland for the company;
- The business purpose of the company;
- The share capital and the total amount and number of shares issued;
- The conditions of the shareholder meetings and general meetings;
- The names of the administrator and auditors appointed.
Shareholders of the Swiss corporation
A Swiss corporation can be formed by only one shareholder. The sole shareholder may also be the director. There is no limit regarding the number of shareholders. Nominee shareholders are also allowed. Simple share transfers are allowed without restrictions. Cash and in-kind contributions are allowed to the share capital.
Directors of the Swiss corporation
At least one director must manage the corporation. The director must be a Swiss resident. If there are multiple directors on the board of directors, at least one of them must be a Swiss resident. It is also possible to appoint a nominee director who is a Swiss resident. Each member of the board of directors must sign for the approved decisions and resolutions, unless otherwise specified in the Articles of Association.
Registered office in Switzerland
Any type of company incorporated in Switzerland must have a registered office and a local agent to act as a contact point to receive official notices.
Minimum share capital for a Swiss corporation
The required minimum share capital to incorporate a Swiss corporation is 100,000 CHF. Upon incorporation, at least 20% or a minimum of 50,000 CHF must be fully paid in cash or in-kind contributions.
Swiss corporation taxation
Swiss corporations must own for tax returns. Newly-formed companies must apply with the Federal Tax Administration after the incorporation procedure is completed. Taxes are levied on federal, cantonal and communal level. Depending on each Swiss canton, the corporate tax rate varies. The direct federal tax rate on profits is 8.5%, the cantonal tax on capital varies between 0.05% – 0.3% and the cantonal tax on profits varies between 5.9% – 16%. Companies must also register for VAT purposes. Switzerland has the lowest value added tax rate in Europe.
Accounting and audits
Bookkeeping and accounting are mandatory for Swiss corporations and must adhere to internationally accepted standards. Annual financial statements must be filed. Financial statements must be reviewed by an auditor, but smaller AGs with less than 10 employees have the option to not have their financial statements reviewed by an auditor.
For more information regarding the incorporation procedure of a Swiss corporation, please contact our experts in this matter.