Switzerland combines political stability, its own internationally sought-after currency and a banking and legal system that has grown over decades. A Swiss GmbH or AG enjoys a high standing with banks, investors and major clients worldwide and, depending on the canton, benefits from profit taxes from around 12%. For company formation in Switzerland, the choice of canton therefore also determines a tax burden of between roughly 12% and just over 20%.
Taxes by canton
In Switzerland, profit tax is levied at three levels: by the Confederation, the canton and the municipality. The direct federal tax is 8.5% on profit after tax, while cantons and municipalities set their own rates. The effective overall burden therefore ranges from around 12% in low-tax cantons such as Zug to just over 20% in high-tax cantons; Geneva is among the most expensive. The choice of canton is the most important tax decision of the formation.
Holding companies additionally benefit from the participation deduction, which considerably reduces tax on dividends and gains from the sale of participations. The Federal Tax Administration provides an overview of all federal taxes.
Switzerland levies a 35% withholding tax on dividends. Shareholders resident in a country with which a double tax treaty exists recover it in full or in part – this applies to Germany, Austria and Liechtenstein, among others.
GmbH or AG: the comparison
Two corporate forms dominate for founders: the GmbH for small and medium-sized businesses and the AG for larger ventures, investors and a later IPO. The two legal forms compared:
| RecommendedGmbH | AG | |
|---|---|---|
| Minimum capital | CHF 20,000 | CHF 100,000 |
| Paid in at formation | In full | At least CHF 50,000 |
| Shareholders in the commercial register | Yes, public | No |
| Representative resident in Switzerland | Required | Required |
| Investors and stock exchange | Limited | Ideal |
| Ideal for | SMEs, consulting, trade | Growth, investors, holdings |
The minimum capital of a GmbH of CHF 20,000 is paid in full but remains in the company as equity and is available for its business. Shareholders of both legal forms can be of any nationality and need not live in Switzerland. The AG also offers more discretion, as its shareholders do not appear in the public commercial register.
Representative in Switzerland
Every Swiss GmbH and AG must be able to be represented by at least one person resident in Switzerland – in an AG by a board member or a director, in a GmbH by a managing director or a director. The commercial register checks this requirement on registration.
Anyone not living in Switzerland appoints a representative through a specialised service provider, who often also provides the registered office. This makes it possible to set up a company in Switzerland without relocating.
The formation process
Company formation in Switzerland follows a clearly regulated process in these steps:
- Choose the canton and seat: The canton determines the tax burden and is therefore the key decision.
- Pay in the capital: into a capital contribution account with a Swiss bank.
- Notarise the deed of formation: Articles of association and deed of formation are publicly notarised.
- Entry in the commercial register: The company comes into existence with its entry in the cantonal commercial register.
- Taxes and VAT: The cantonal tax administration registers the company; VAT registration follows from CHF 100,000 of turnover.
With complete documents, the company is usually registered within two to three weeks. The capital is then available for its business activities.
Accounting and obligations
The key obligations for bookkeeping, accounts, audit and VAT at a glance – so you know from the start what running your company involves.
| Obligation | Rule |
|---|---|
| Bookkeeping | Commercial bookkeeping under the Code of Obligations |
| Annual accounts | Annual financial statements with balance sheet and income statement |
| Statutory audit | Usually a limited audit; up to 10 full-time positions it can be waived (opting-out) with the consent of all shareholders |
| Tax return | Annual tax return with the canton |
| VAT: registration | From CHF 100,000 worldwide turnover; rate 8.1% |
| VAT: returns | Quarterly; half-yearly with the net tax rate method |
| Ongoing register duties | Report changes to the commercial register; Swiss-resident representative |
As of 2026. Bookkeeping and filings are usually handled by specialised accountants in the target country.
Is Switzerland right for you?
Whether Switzerland suits you depends mainly on how much weight reputation, stability and access to banking carry:
Suitable for
- Established companies with international clients
- Holdings holding participations at reduced tax
- Founders who want to signal top creditworthiness
- Entrepreneurs moving to Switzerland themselves
Less suitable for
- Founders with very little start-up capital
- Traders shipping goods across the customs border into the EU
- Businesses that rely mainly on the EU single market
- Start-ups looking for Europe's lowest tax rate
Right next door, Liechtenstein offers 12.5% corporate tax and long-established foundations; outside Europe, Singapore combines top reputation with tax-free foreign income. The overview of all locations shows every option, and the tax comparison the rates. Which structure fits in an individual case can be clarified in an initial call.
