Setting up a Sàrl/GmbH in Switzerland: steps and tips | IS SHAKING (2023)

I Switzerland aLLCtheGmbHis the legal form of a limited company. Sàrl/GmbH is an abbreviation for "Limited Liability Company". This structure is similar to SARLs or LLCs (Limited Liability Companies) found in other countries.

Here are some key features of a Swiss LLC in Switzerland:

– Limited liability: Swiss LLC partners have limited liability, which means their liability is limited to the amount of their capital contribution to the company. In the event of debt or disputes, the personal assets of the partners are generally not exposed.

- Correctness:An LLC in Switzerland must have a minimum share capital. Currently, this minimum share capital is 20,000 Swiss francs. Social capital is divided into shares, which are owned by shareholders. Shares represent the shareholders' share in the company.

- Partners:A limited company can be founded by one or more natural or legal persons. Partners can be Swiss or foreign nationals. Each partner holds shares and participates in the profits and losses of the business in proportion to his share.

- Management:A company with limited liability in Switzerland is managed by one or more managers. The managers can be chosen from among the partners, or they can be persons outside the company. The board is responsible for the day-to-day management of the company and for making the necessary decisions.

– Taxation:An LLC in Switzerland is subject to corporate tax at the federal, cantonal and municipal levels. Tax rates vary depending on the canton where the company is based.

- Rules:Theformation and management of an LLC in Switzerlandis governed by Swiss company law and the Swiss Code of Obligations.

What are the advantages of a Swiss LLC?

- Chapter:The minimum capital required to set up a Swiss LLC is CHF 20,000, which is less than the capital required for a Swiss company (SA/AG). This allows entrepreneurs to start a business with a relatively small initial investment. However, it should be noted that the capital must be fully paid up at the time the Swiss LLC is formed.

- Limited liability:The partners in a Swiss LLC have limited liability, which means that their liability is limited to the amount of the paid-up share capital, which is 20,000 Swiss francs. The partners' personal assets are protected in the event of debt or lawsuits, ensuring financial security.

- Company name:Unlike a sole proprietorship, where the name is usually the name of the owner, a Swiss limited liability company gives the freedom to choose the business name of the company. However, the word "LLC" must be added after the company name to indicate its legal form.

- Foundation:A Swiss LLC can be formed by a single owner. Swiss law allows a sole proprietor to set up a Swiss LLC on their own, making it easier to create a more robust legal structure and better protect personal assets.

- Treasure:A Swiss LLC can benefit from tax optimization by distributing profits. A Swiss LLC manager's salary is treated as an expense of the business, allowing you to reduce taxes on profits or at least keep them at a lower level, depending on your specific tax situation.

– Sale of shares:Income or gain from the sale of Swiss LLC shares is not subject to income or capital gains tax, provided certain conditions are met.

What are the disadvantages of a Swiss LLC?

– Integration costs:Establishing a limited company is associated with higher establishment costs than a sole proprietorship. These costs include official and certified activities as well as registration in the trade register. These additional costs should be considered when deciding to form a Swiss LLC.

- Advertising:Information about the company's instruments, share capital and shares is publicly available through the trade register. This means that any interested party can freely view data from Swiss LLC. This may affect the confidentiality of the partners and the company, unlike the Swiss company (SA/AG).

– Administration costs:The costs of running a Swiss limited liability company are generally higher than in the case of a sole proprietorship. This is due to additional legal obligations related to keeping records, holding shareholder meetings and preparing tax forms. These additional costs should be taken into account in the financial planning of the partnership.

- Double taxation:When a person is both a manager of a Swiss LLC and a partner, they may be subject to double taxation. The company is subject to income and wealth tax at the Swiss LLC level, while the manager is also subject to personal income and wealth tax. This can result in a higher tax burden for the manager compared to a sole proprietorship.

The formation of a Swiss LLC (Limited Liability Company) in Switzerland involves several steps.

Here's an overview of the main steps and some tips to keep in mind:

  1. Drafting of articles of association:The company's articles of association must be drawn up. They must contain information such as company name, registered office, company purpose, share capital, share division, etc. A professional is recommended, e.g.Swiss Trusteeor notary public to draw up the articles of association to ensure they comply with legal requirements.
  2. Right:A Swiss LLC must have a minimum share capital. Currently, the minimum share capital is CHF 20,000, of which 100% must be paid in at the time of incorporation. Capital contributions can be made in cash or in kind (goods, equipment, etc.). The deadline for founding a private limited company is 4 weeks.
  3. Appointment of shareholders and management body: A Swiss LLC must have at least one partner, who can be a natural or legal person. You probably have several partners. In addition, at least one director must be appointed to handle the day-to-day management of the company. This is required by Swiss lawat least one director or manager must be resident in Switzerland.
  4. Choice of location:It is necessary to indicate the company's registered office in Switzerland. The registered office is the company's official address and can be a personal address, arented office or apartmentwith a curator specializing in business administration.
  5. Registration in the Trade Register: After the articles of association have been drawn up and signed, the company must be registered in the Commercial Register. This registration must be done at the trade register in the canton where the company is based.
  6. Download tax ID:Once a business is registered in the commercial register, it can apply for a VAT number to the relevant federal tax office. This figure is used for quarterly tax returns for taxable economic activities.

Setting up a Sàrl/GmbH in Switzerland: steps and tips | IS SHAKING (1)

Here are some tips to consider when setting up a limited liability company in Switzerland:

– Use the services of a professional:It is recommended to consult a lawyer specializing in commercial law orA Swiss trustee specializing in the creation and management of companies in Switzerlandto guide you through the creation process. They will help you draft bylaws, understand legal and tax requirements and assist with administrative procedures.

– Market and project feasibility study:Before establishing a joint stock company, it is necessary to conduct a thorough market research to assess the profitability of your project. Analyze the competition, identify the target group and assess the demand for your products or services. This will allow you to make informed decisions and minimize potential risks.

– Design the business structure:Think about your structureSwiss limited liability company,including number and profile of shareholders, distribution of shares and appointment of board members. Make sure you have strong and capable partners and clearly define the roles and responsibilities of each person involved.

– Develop a solid business plan:Develop a detailed business plan that includes your business strategy, financial goals, marketing plan and realistic financial projections. This will help you secure funding, convince potential investors and manage your business.

– Ensure good financial management: Establish sound financial management procedures from the start. This includes establishing an appropriate accounting system, regular monitoring and compliance of income and expenditureSwiss tax and accounting requirements.

- Perform administrative tasks: Follow the legal steps to set up a business, including drawing up a partnership agreement, registering with the commercial register and obtaining a VAT number. Please respect the deadlines and specific requirements in your canton. apply forwork permit in Switzerlandand ensure that your company respects the collective agreements that apply to your industry. Make sure your business has all the necessary licenses.

– Protect your intellectual property:If your Swiss LLC relies on unique products, services or technologies, consider protecting your intellectual property by applying for patents, trademarks or copyrights, if any. This can provide legal protection and a competitive advantage.

– Insure your businessagainst hazards such as occupational accidents and other accidents, insure your equipment and property as necessary, and take out liability insurance.

It should be noted that this advice is general and it is advisable to consult business incorporation experts for advice specific to your particular situation. Each company is unique and may require additional assessments depending on the industry and location in Switzerland.

Contact us to start your first consultation now. We would very much like to meet you and discuss the next steps with you in your project to establish a company in Switzerland.

Fill out our contact form or call us+41(0)22 566 82 45

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