How do I start an association in Switzerland? - Complete guide 2025

What is an Association in Switzerland?

An association (Verein) is a legal entity with its own legal personality (Art. 60-79 Swiss Civil Code) that pursues idealistic, non-commercial purposes. As a legal person, an association can have rights and obligations, conclude contracts, and own property.

Swiss Association Landscape:

• Estimated 80,000-100,000 active associations
• 50% are sports associations
• Other areas: Culture, politics, social causes, science, charity
• Simplest legal form for idealistic purposes

Basic Requirements for Association Formation

Minimum Requirements:

• Persons: At least 2 natural and/or legal persons
• Recommendation: Minimum 3 persons for better decision-making
• Formation Capital: None required
• Domicile: At least one responsible person from Switzerland
• Purpose: Idealistic and non-profit oriented

Permitted Association Purposes:

• Political activities
• Religious purposes
• Scientific projects
• Artistic activities
• Charitable purposes
• Social activities
• Sports activities
• Cultural promotion

Step-by-Step Formation Guide

Phase 1: Preparation (Pre-Association Phase)

1. Develop Idea and Find Supporters:

• Clearly define association purpose
• Recruit committed founding members
• Determine target group and activities
• Develop financing concept

2. Choose Association Name:

• Name must not be misleading
• Must differ from existing associations
• Check Commercial Register and internet recommended
• Legal form suffix not mandatory

Phase 2: Create Articles of Association

Mandatory Content of Articles (Art. 60 Swiss Civil Code):

• Association Purpose: Precise and permanent formulation
• Association Name: Clear designation
• Association Domicile: Must be in Switzerland
• Organization: Structure of association organs
• Resources: Financing and asset management
• Formation Intent: Explicit intention to form

Recommended Additional Regulations:

• Admission and withdrawal of members
• Member contributions and obligations
• Tasks and competencies of organs
• Decision-making and majority relationships
• Dissolution provisions
• Use of liquidation proceeds

Phase 3: Founding Assembly

Mandatory Agenda:

• Welcome: Determine chairperson and minute-taker
• Formation Resolution: Record intention to form association
• Articles Approval: Adopt written articles
• Organ Elections: Elect board and other organs
• Further Procedure: Discuss next steps

Minute-Taking:

• Name all founding members
• Document formation resolution
• Record articles approval
• Protocol organ elections
• Signatures of all participants

Phase 4: Establish Association Organs

Mandatory Organs:

1. Members' Assembly (Supreme Organ):

• All association members
• Elects board and other organs
• Decides on articles amendments
• Approves annual accounts
• Discharges the board

2. Association Board (Executive Organ):

• Minimum 1 member required
• Manages association business
• Represents association externally
• Organizes members' assemblies
• Maintains accounting

Optional Organs:

• Audit body (recommended for larger associations)
• Management office
• Specialized committees
• Advisory boards

Commercial Register Entry - When Mandatory?

Registration Obligation Exists for:

• Commercial Enterprise: Business activities conducted in commercial manner
• Audit Obligation: When meeting certain thresholds
• Money Laundering Act: International money flows over CHF 100,000 annually

Typical Commercial Register-Obligated Associations:

• Associations with restaurants/bars
• Educational institutions
• Hospitals and care homes
• Service companies
• International aid organizations

Voluntary Registration Benefits:

• Increased credibility
• Protection of association name
• Simplified contract conclusions
• Professional appearance

Commercial Register Entry Costs:

• Basic Fee: Approximately CHF 400
• Additional Costs: Personal details and changes
• Consequential Costs: Accounting obligation and audit

Tax Aspects and Public Benefit Status

Basic Tax Liability

Taxable Areas:

• Profit Tax: On generated surpluses
• Capital Tax: On association assets
• VAT: From certain turnover thresholds

Cantonal Exemptions:

• Different limits per canton
• Often high exemptions for small associations
• Information from cantonal tax offices

Tax Exemption for Public Benefit Associations

Requirements for Public Benefit Status:

• Altruism: Activities serve the welfare of third parties
• Non-profit Orientation: No profit distribution to members
• Voluntary Board: Maximum expense reimbursement
• Statutory Regulation: Liquidation proceeds to public benefit organizations

Application Process:

• Request to cantonal tax administration
• Required documents: Articles, founding minutes, annual accounts
• Written description of activities
• Regular review by authorities

VAT Regulations

Turnover Thresholds:

• General Associations: CHF 100,000 annual turnover
• Public Benefit/Sports/Cultural Associations: CHF 250,000 annual turnover
• Tax-exempt Associations: VAT remains applicable

Non-taxable Income:

• Member contributions (without direct consideration)
• Donations for public benefit purposes
• Public subsidies

Accounting Obligations and Audit

Basic Bookkeeping Obligation

All Associations Must Keep Records of:

• Income and expenses
• Asset position
• Capital and debts
• Profit and loss

Type of Accounting:

• Simple Accounting: For non-commercial register associations
• Double-entry Accounting: Mandatory for commercial register entry

Audit Obligation

Mandatory Audit When:

• Balance Sheet Total: Over CHF 10 million
• Revenue: Over CHF 20 million
• Full-time Positions: Over 50 on annual average

Voluntary Audit Recommended for:

• Larger associations
• Fundraising activities
• Public contributions
• Quality assurance

Formation Costs and Ongoing Expenses

One-time Formation Costs

Mandatory Costs:

• Association Formation: CHF 0 (free of charge)
• Commercial Register Entry: Approximately CHF 400 (if required)
• Consulting Costs: Optional but recommended

Additional Start-up Costs:

• Open association account
• Letterhead and website
• Finance initial activities

Ongoing Operating Costs

Regular Expenses:

• Tax Return: Required annually
• Accounting Costs: Depending on scope
• Bank Account Management: Varies by bank
• Audit Body: For larger associations
• Association Activities: Purpose-related expenses

Membership and Liability

Member Rights and Obligations

Member Rights:

• Participation in members' assemblies
• Voting and election rights
• Information about association activities
• Withdrawal possible at any time

Member Obligations:

• Contribution payment (if provided in articles)
• Compliance with articles
• Loyalty to association purpose

Liability Rules

Principle of Limited Liability:

• Only association assets liable for debts
• Members not personally liable
• Exception: Explicit regulation in articles

Board Liability:

• Personal liability for breach of duty
• Duty of care and fiduciary duty
• Recommendation: Liability insurance

Common Mistakes and How to Avoid Them

Purpose Formulation

Mistake: Too narrow or profit-oriented purposesSolution: Idealistic, future-proof formulation

Organizational Structure

Mistake: Unclear competencies and responsibilitiesSolution: Detailed articles with clear regulations

Financial Planning

Mistake: Underestimating ongoing costsSolution: Realistic budget planning and financing concept

Legal Compliance

Mistake: Neglecting legal obligationsSolution: Regular legal advice and continuing education

Association vs. Other Legal Forms

Association vs. Foundation

Choose Association for:

• Member-oriented organization
• Flexible purpose adaptation desired
• Low start-up capital
• Democratic participation

Choose Foundation for:

• Permanent asset dedication
• Fixed, unchangeable purpose
• High start-up capital (CHF 50,000+)
• Long-term commitment

Association vs. LLC/Corporation

Association for:

• Idealistic, public benefit purposes
• No profit distribution
• Possible tax advantages

Company for:

• Profit-oriented activities
• Commercial activities
• Capital building and distribution

Advantages and Disadvantages Overview

Advantages of Association Formation

Benefits:

• Free Formation: No formation fees
• Legal Security: Own legal personality
• Limited Liability: Only association assets liable
• Flexibility: Simple articles amendments possible
• Tax Advantages: Public benefit status possible
• Democracy: Participation of all members

Disadvantages of Association Formation

Drawbacks:

• Non-profit Orientation: No profits to members
• Administrative Burden: Assemblies and minutes
• Tax Obligations: Annual accounts and declarations
• Dependency: On committed members
• Limited Business Activity: Only for purpose fulfillment

Frequently Asked Questions (FAQ)

Can an association make profit?

Yes, but profits must serve the association purpose and may not be distributed to members.

Who can become an association member?

Natural and legal persons, unless the articles provide restrictions.

Must the association be entered in the Commercial Register?

Only for commercial enterprises, audit obligations, or international money flows over CHF 100,000.

How do you dissolve an association?

Through association resolution or court order. Liquidation proceeds must be used according to articles.

Can foreigners establish a Swiss association?

Yes, but at least one responsible person must be from Switzerland.

Association Formation Checklist

Before Formation

• Clearly define association purpose
• Find at least 2 committed founding members
• Develop financing concept
• Check and determine association name
• Create articles draft

Founding Assembly

• Invitation to all founding members
• Present and adopt articles
• Elect board and other organs
• Create and sign founding minutes
• Determine next steps

After Formation

• Open association account
• Register with tax authorities
• Check commercial register entry (if necessary)
• Conclude liability insurance
• Plan first members' assembly
• Set up accounting system

Expert Tips for Successful Association Management

1. Create Clear Structures:

• Detailed articles with clear regulations
• Regular board meetings and members' assemblies
• Transparent communication and decision-making

2. Ensure Financial Sustainability:

• Realistic budget planning
• Diversified financing sources
• Professional accounting

3. Observe Legal Compliance:

• Regular review of legal obligations
• Seek legal advice when needed
• Document all important decisions

Conclusion

Association formation in Switzerland is simple and cost-effective but requires careful planning and preparation. With the right articles, committed members, and professional organization, an association can successfully pursue idealistic purposes and make a valuable contribution to society.

Key Success Factors:

• Clear Purpose: Unambiguous objectives and activities
• Committed Members: Active participation and assumption of offices
• Solid Financing: Sustainable financing sources
• Professional Management: Proper administration and accounting

For more complex projects or special requirements, consultation with legal and tax experts is recommended to create the optimal structure from the beginning.