Types of Structures in Switzerland

The main types of legal structures in Switzerland includes:

  • Stock Corporation(AG/SA)
  • Limited liability company (L.L.C.),
  • Partnerships(further classified as below)
    • Sole proprietorship
    • General partnership
    • Limited partnership.

The Stock Corporation in Switzerland

The stock corporation takes between 2-3 weeks to be set up. Stock Corporation is legally separated from its owners and is a form of well-known and stable business.

The mandatory requirements for Stock Corporation are:

  • Minimum capital of 100.000 CHF
  • At least one shareholder
  • One director that reside in Switzerland

The stock corporation can be formed for any type of activity in Switzerland.

The stock corporation can be further classified into various categories

  • Holding companies – these companies benefit from reduction of taxes at both federal and cantonal levels
  • Domiciliary companies – managed and controlled from abroad but only have a registered office in Switzerland
  • Auxiliary stock companies – domiciliary firms that carry part of their business in Switzerland.

For cantonal and municipal tax benefits, some companies form a mix domiciliary and holding companies. They get tax benefits in case:

  • If it has a minimum of 80% of its income from foreign sources
  • If the company develops relationships with other foreign companies.
  • if the company is foreign controlled

In Switzerland, it is allowed to have branch office for foreign business however offices should be registered with the commercial registry of the canton in which they are located. These offices must also have an appointed representative who should be resident of Switzerland.

The Limited Liability Company in Switzerland

This is most suitable for small businesses that do not have enough money to start Stock Corporation. It does not require board of directors. This is an alternative with less minimum amount involved and only needs shareholder that must be a natural person. The minimum amount required to start Limited Liability Company is 20.000 CHF

The Swiss Partnerships in Switzerland

Sole proprietorship: It has to have an annual turnover of 100.000 CHF. Owner is the only person who has total control over the business. It is the best fit for artists, or freelancers, sole traders or self-employed people. The drawback of Sole proprietorship is in case the business does not work the proprietor will lose all his or her assets as he is fully liable for the company’s debts

General partnership – It can be formed by two or more partners but their business is not a separate legal entity. A partnership agreement will be drafted, made and signed by all partners. All the partners will also be required to pay for their own taxes at personal income tax rates. All the partners will also have unlimited joint liabilities for the debts of the business.

Limited partnership – It is necessary to have at least two natural partners and is most suited to small businesses. One of the partner will act as a general partner with unlimited liability, and another one acting as a corporation with limited liability.

For more information on registering a company in Switzerland, do not hesitate to contact us.