How do I set up a public limited company (AG) in Switzerland? Complete guide

What is a Swiss Corporation (Aktiengesellschaft/AG)?

The Swiss corporation (Aktiengesellschaft/AG) is one of the most popular legal forms in Switzerland with over 122,000 registered companies. It is a capital company with its own legal personality and limited liability.

Basic Characteristics:

• Shareholders: One or more natural/legal persons
• Minimum Capital: CHF 100,000 (share capital)
• Liability: Limited to company assets
• Commercial Register Entry: Mandatory for AG formation
• Swiss Representation: At least one board member with Swiss residence

Advantages of Swiss Corporation

Liability Benefits:

• Limited Liability: Shareholders liable only for paid-in capital
• Private Asset Protection: No personal liability for company debts
• Shareholder Anonymity: Names not visible in Commercial Register
• Legal Security: Clear statutory structure and regulations

Financial Benefits:

• Capital Raising: Easy capital increases through share issuance
• Tax-free Capital Gains: Sale of shares without capital gains tax
• Investor-friendly: Attractive to external investors
• Creditworthiness: Higher acceptance by banks and business partners

Structural Benefits:

• Flexible Transfer: Shares easily tradeable
• Succession Planning: Uncomplicated business succession
• International Recognition: Globally recognized legal form
• Stock Exchange Capability: Foundation for later IPO

Disadvantages of Swiss Corporation

Financial Disadvantages:

• High Formation Costs: CHF 52,000-58,000 minimum investment
• Double Taxation: Profit tax at AG level + dividend tax
• Issuance Tax: 1% on capital over CHF 1,000,000
• Ongoing Costs: Audit, administration, annual general meeting

Administrative Disadvantages:

• High Complexity: Complex formation procedures and ongoing obligations
• Audit Requirement: Mandatory annual financial statement audit
• Formalities: Annual general meeting, minute-taking
• Bookkeeping Obligation: Proper accounting mandatory

Requirements for AG Formation

Basic Prerequisites:

• Minimum One Shareholder: Natural or legal person
• Share Capital: Minimum CHF 100,000
• Capital Payment: Minimum CHF 50,000 at formation (20%)
• Swiss Representation: One board member with Swiss residence
• Company Name: Unique with suffix "AG" or "Aktiengesellschaft"

Capital Requirements:

• Minimum Capital: CHF 100,000 mandatory
• Minimum Payment: CHF 50,000 (20% of share capital)
• Par Value: Shares can be less than 1 centime (>0)
• Payment Types: Cash or in-kind contributions possible
• Capital Account: Blocked account at Swiss bank required

Step-by-Step Formation Guide

Step 1: Preparation and Planning

Create Business Plan:

• Business Model: Detailed description of business activities
• Market Analysis: Target group, competition, market potential
• Financial Planning: Capital requirements, revenue forecasts, cost structure
• Organizational Structure: Board of directors, management, employees
• Timeline: Formation phases and milestones

Budget Formation Costs:

• Share Capital: CHF 100,000 (minimum CHF 50,000 to be paid)
• Consulting Costs: CHF 1,000-4,000 for professional support
• Notary Costs: CHF 800-2,500 for certification
• Commercial Register Entry: CHF 600 (up to CHF 200,000 capital)
• Issuance Tax: 1% on capital over CHF 1,000,000
• Total Costs: CHF 52,500-58,000 for standard formation

Step 2: Determine Company Name

Name Requirements:

• Suffix Mandatory: "AG" or "Aktiengesellschaft"
• Uniqueness: Distinguishable from existing company names
• No Deception: Name must not be misleading
• Fantasy Names: Generally permitted
• Check: Availability on zefix.ch

Name Examples:

• "Swiss Innovation AG"
• "Alpine Consulting Aktiengesellschaft"
• "TechStart AG"
• "Müller & Partner AG"

Step 3: Open Capital Payment Account

Account Opening:

• Bank Selection: Swiss bank of choice
• Account Type: Blocked account in name of AG to be formed
• Minimum Payment: CHF 50,000 (20% of share capital)
• Proof: Bank statement as capital payment confirmation
• Blocking: Capital blocked until Commercial Register entry

Required Documents:

• Draft articles of association
• Identity documents of all founders
• Capital payment order
• Declaration of capital origin

Step 4: Create Articles of Association

Mandatory Content of Articles:

• Company Name: Complete designation with "AG"
• Company Domicile: Municipality in Switzerland
• Purpose: Detailed description of business activities
• Share Capital: Amount and division into shares
• Share Types: Par value and special rights
• Organs: Board of directors and general meeting
• Business Year: Beginning and end of business year
• Profit Usage: Rules for dividend distribution

Optional Article Content:

• Restriction provisions (transfer limitations)
• Voting shares or non-voting shares
• Organizational regulation reference
• Special powers of board of directors
• Arbitration clause

Step 5: Determine Corporate Organs

Mandatory Organs:

General Meeting:

• Function: Supreme organ of AG
• Powers: Board election, article amendments, profit usage
• Frequency: At least once annually (ordinary GM)
• Convocation: By board or upon shareholder request

Board of Directors:

• Minimum Number: One member required
• Composition: Natural persons (shareholders or external)
• Swiss Representation: At least one member with Swiss residence
• Tasks: Supreme management, business conduct, external representation
• Liability: Personal liability for breach of duty

Audit Body (conditionally mandatory):

• Requirement: More than 10 full-time employees
• Limited Audit: When exceeding 2 of 3 thresholds:
  • Balance sheet total: CHF 20 million
  • Revenue: CHF 40 million
  • Employees: 250
• Ordinary Audit: When exceeding all thresholds
• Opting-out: Waiver with <10 full-time positions and unanimity

Step 6: Notarial Certification

Formation Meeting:

• Participants: All founding shareholders
• Notary: Public certification by Swiss notary
• Documents: Articles, board election, audit appointment
• ID Documents: All participants with official identification
• Capital Proof: Confirmation of capital payment

Certified Documents:

• Public deed on formation act
• Articles of association of corporation
• Election of board of directors
• Appointment of audit body (if required)
• Acceptance declarations of elected organs

Step 7: Commercial Register Entry

Registration with Commercial Register:

• Jurisdiction: Cantonal Commercial Register office
• Application: By board within 3 months
• Review: Completeness and legality of documents
• Entry: AG constitution through registration
• Publication: Announcement in Swiss Official Gazette of Commerce (SHAB)

Required Documents:

• Commercial Register application form
• Notarially certified formation deed
• Articles of association of AG
• Proof of capital payment
• ID copies of all organ members
• Signature specimens of authorized signatories

Costs and Duration:

• Basic Fee: CHF 600 (for capital up to CHF 200,000)
• Higher Capital: Graduated fees
• Processing Time: 1-3 weeks after complete submission
• SHAB Publication: Appears 2-3 weeks after application

Step 8: After Formation

Register Social Insurance:

• AHV Compensation Fund: Registration for AG and all employees
• Occupational Pension (BVG): For annual salary over CHF 22,050
• Accident Insurance (UVG): Mandatory for all employees
• Family Allowances: Varies by canton

Taxes and VAT:

• Profit Tax: AG liable to tax on profit and capital
• Value Added Tax: Registration for turnover over CHF 100,000
• Withholding Tax: 35% on dividends and interest
• Issuance Tax: 1% on capital over CHF 1,000,000

Open Business Account:

• After Commercial Register Entry: Capital is released
• Business Account: Separate account for operational business
• Required Documents: Commercial Register extract, articles, ID documents
• Authorizations: Signature rights according to Commercial Register

AG Formation Costs in Detail

Minimum Costs (Standard Formation):

• Share Capital: CHF 100,000 (CHF 50,000 to be paid)
• Commercial Register Entry: CHF 600
• Notary Costs: CHF 800-1,500
• Consulting (minimal): CHF 1,000
• Total Minimum Costs: CHF 52,400-53,100

With Professional Support:

• Comprehensive Consulting: CHF 2,000-4,000
• Complex Articles: CHF 1,500-2,500 (notary costs)
• Additional Services: CHF 500-1,500
• Total Professional Costs: CHF 54,500-58,000

Ongoing Costs (annually):

• Audit: CHF 2,000-10,000 depending on size
• Administration: CHF 1,000-3,000 for minutes, GM
• Taxes: Depending on profit and canton
• Bookkeeping: CHF 2,000-8,000 depending on complexity

Corporate Organs in Detail

General Meeting:

Non-transferable Powers:

• Election and dismissal of board of directors
• Approval of annual financial statements
• Decision on profit usage
• Article amendments
• Capital increases and reductions

Meeting: At least once annually within 6 months after business yearConvocation: 20 days in advance in writingQuorum: Statutory or legal regulations

Board of Directors:

Non-transferable Tasks:

• Supreme management of company
• Determination of organization
• Design of accounting system
• Supreme supervision of business management
• Preparation of business report

Representation: Collective or according to organizational regulationsMeetings: Regular, at least when neededMinutes: Written decision-making required

Management:

Delegation Possible: To board members or third partiesExecutive Management: Operational leadership of companyCompetencies: Defined in organizational regulationsReporting Obligation: Regular information to board

Audit and Opting-out

Audit Requirement:

Ordinary Audit:

When all three thresholds exceeded:

• Balance sheet total > CHF 20 million
• Revenue > CHF 40 million
• Employees > 250

Limited Audit:

When 2 of 3 thresholds exceeded

No Audit:

Opting-out with under 10 full-time positions

Opting-out Requirements:

• Fewer than 10 full-time employees
• Unanimous waiver decision by all shareholders
• Annual confirmation of waiver required
• Risk: Higher liability for faulty bookkeeping

Audit Costs:

• Limited Audit: CHF 2,000-5,000 per year
• Ordinary Audit: CHF 5,000-15,000 per year
• Large Companies: CHF 15,000-50,000 per year

Tax Aspects

Corporate Taxation:

• Profit Tax: 12-24% depending on canton (federal + cantonal + municipal)
• Capital Tax: 0.001-0.5% on equity
• Withholding Tax: 35% on dividends (partially refundable)

Optimization Possibilities:

• Salary-Dividend Mix: Tax-optimal distribution
• Holding Structure: For multiple participations
• Location Choice: Cantons with favorable tax burden
• Participation Relief: For qualified participations

Double Taxation:

• Company Level: AG pays profit and capital tax
• Shareholder Level: Dividends taxed as income
• Mitigation: Partial taxation of dividends (70% taxable)

Timeline for AG Formation

Preparation Phase (2-4 weeks):

• Business plan and financial planning
• Article creation
• Clarify organ appointments
• Open capital payment account

Formation Phase (2-3 weeks):

• Notarial certification
• Commercial Register entry
• Wait for SHAB publication

Follow-up Phase (2-4 weeks):

• Register social insurance
• Register taxes and VAT
• Open business account
• First general meeting

Total Duration: 6-11 weeks

Avoiding Common Mistakes

During Preparation:

• Insufficient Capitalization: Only paying minimum
• Faulty Articles: Incomplete or contradictory regulations
• Wrong Organ Appointment: Unsuitable board members
• Underestimated Costs: Only considering formation costs, not ongoing costs

During Formation:

• Document Errors: Incomplete Commercial Register application
• Capital Proof: Missing or faulty capital confirmation
• Notary Appointment: Unprepared for certification appointment
• Organ Defects: Missing Swiss representation on board

After Formation:

• Missed Registrations: Forgotten social insurance or VAT
• Organizational Defects: No clear responsibilities defined
• Compliance: Neglecting legal obligations
• Bookkeeping: Insufficient accounting from start

AG Formation Checklist

Preparation Phase:

• Create business plan and conduct financial planning
• Budget formation costs (min. CHF 52,500)
• Check and reserve company name
• Determine shareholders and board of directors
• Create or have articles created

Formation Phase:

• Open capital payment account at Swiss bank
• Pay minimum capital CHF 50,000
• Arrange notary appointment for certification
• All founders with ID to notary appointment
• Apply for Commercial Register entry
• Wait for SHAB publication

After Formation:

• Register with AHV compensation fund
• Choose BVG pension fund (if employees)
• Conclude UVG insurance
• Register for VAT (if turnover > CHF 100,000)
• Open business account and release capital
• Set up bookkeeping
• Conduct first general meeting
• Appoint audit body (if required)

Comparison: AG vs. Other Legal Forms

AG vs. LLC (GmbH):

• Capital: AG CHF 100,000, LLC CHF 20,000
• Flexibility: LLC more flexible in management
• Image: AG more prestigious and international
• Costs: AG higher formation costs

AG vs. Sole Proprietorship:

• Liability: AG limited, sole proprietorship unlimited
• Capital: AG CHF 100,000, sole proprietorship CHF 0
• Complexity: AG very complex, sole proprietorship simple
• Expansion: AG suitable for growth and investors

Conclusion

Forming a Swiss corporation is a demanding process requiring careful planning and adequate capitalization. With minimum capital of CHF 100,000 and total formation costs of CHF 52,500-58,000, the AG is an investment in a professional, internationally recognized legal form.

Key Success Factors:

• Careful Preparation: Business plan, financial planning, and organizational structure
• Professional Support: Involve lawyers, notaries, and trustees
• Adequate Capitalization: Consider operational needs, not just minimum
• Compliance: Fulfill all legal obligations from the start

The AG is particularly suitable for growth-oriented companies that want to attract external investors, operate internationally, or later go public. The limited liability and professional structure justify the higher costs and administrative burden.

When to Choose AG:

• Growth Plans: Scaling business operations
• Investment Needs: Attracting external capital
• International Business: Global market presence
• Professional Image: Established corporate reputation
• Exit Strategy: Potential sale or IPO

The Swiss corporation remains the gold standard for serious business ventures requiring professional structure, limited liability protection, and international credibility.