Which legal form is suitable if you want to set up a company?
The suitable legal form depends primarily on liability, capital requirements, external impact, and administrative effort. In practice, when starting a company in Switzerland, three options are usually in the foreground.
Legal form | Suitable for | Minimum capital | Commercial register |
|---|---|---|---|
Sole proprietorship | Solo self-employment, low starting effort | CHF 0 | Mandatory from CHF 100'000 in sales revenue |
LLC | SMEs, agencies, start-ups with limited liability | CHF 20'000 | always required |
stock corporation | Growth companies, investors, higher external impact | CHF 100'000 | always required |
The sole proprietorship is the simplest. It is factually created when independent business activity begins. A natural person who runs a business and has achieved at least CHF 100'000 in sales revenue in the last financial year must have their sole proprietorship entered in the commercial register at the place of business (Art. 931 Abs. 1 OR). Below this limit, registration is voluntary (Art. 931 Abs. 3 OR).
The LLC is popular because it has its own legal personality and the share capital is at least CHF 20'000 (Art. 773 Abs. 1 OR). It is publicly certified and legally established by entry in the commercial register (Art. 777 Abs. 1 OR, Art. 779 Abs. 1 OR).
The stock corporation is particularly suitable when investors, shareholdings, or a stronger separation between the company and its owners are important. The share capital is at least CHF 100'000 (Art. 621 Abs. 1 OR). Upon incorporation, at least 20 percent of the nominal value of each share must be paid in, but in any case at least CHF 50'000 (Art. 632 Abs. 1 OR, Art. 632 Abs. 2 OR).
How does a company formation work in Switzerland?
You typically set up a company in Switzerland in seven steps. The exact process depends on whether you are setting up a sole proprietorship, an LLC, or a stock corporation.
1. Define the business idea and legal form
Before you prepare documents, you should clarify how your business is to function. Particularly important are:
Who is co-founding?
How much starting capital is needed?
Should personal liability be limited?
Do you need investors?
Are you planning to hire employees?
Is your turnover expected to rise rapidly above CHF 100'000?
If you need support with the incorporation, Jurata is always happy to help you further: Gründungen.
2. Check company name
The company name must not be misleading, must correspond to the truth, and must not contradict any public interest (Art. 944 Abs. 1 OR). Commercial companies such as the LLC and stock corporation can basically choose their name freely, but must state the legal form (Art. 950 Abs. 1 OR).
The difference between identical and confusable is important. The commercial register checks in particular whether an identical company is already registered. Whether a similar name is legally problematic can also be relevant under name, company, or trademark law. For this reason, a search in the commercial register and, depending on the project, a trademark check is worthwhile before incorporation.
3. Determine capital and shares
For sole proprietorships, there is no statutory minimum capital. For an LLC, you must contribute at least CHF 20'000 of share capital (Art. 773 Abs. 1 OR). The articles of association of the LLC must contain, among other things, the company name, registered office, purpose, share capital, and the number and nominal value of the shares (Art. 776 OR).
For the stock corporation, the minimum capital is CHF 100'000 (Art. 621 Abs. 1 OR). It is particularly important for founders that at least CHF 50'000 must be paid in at the time of establishment (Art. 632 Abs. 2 OR).
4. Prepare incorporation documents
For an LLC and stock corporation, you need incorporation documents. These typically include the articles of association, deed of incorporation, application for entry in the commercial register, and, depending on the case, additional supporting documents.
For a stock corporation, the application to the commercial register must be accompanied, among other things, by the public deed of incorporation, the articles of association, declarations of acceptance by the members of the board of directors, and, if applicable, the declaration of acceptance by the auditors (Art. 43 Abs. 1 HRegV). For the LLC, the Commercial Register Ordinance also requires the public deed, the articles of association, declarations of acceptance of the managing directors, and, if applicable, audit documents (Art. 71 Abs. 1 HRegV).
If there are contributions in kind, set-offs, or special privileges, incorporation becomes more complex. Additional documents such as contribution-in-kind agreements, an incorporation report, and audit confirmation may then be required (Art. 43 Abs. 3 HRegV, Art. 71 Abs. 3 HRegV).
5. Carry out public notarization
The LLC and stock corporation are established by a public deed. In the case of the stock corporation, the founders declare in a public deed that they are forming a stock corporation, lay down the articles of association, and appoint the governing bodies (Art. 629 Abs. 1 OR). It works similarly for the LLC. The founders declare in a publicly notarized deed that they are forming an LLC, lay down the articles of association, and appoint the governing bodies (Art. 777 Abs. 1 OR).
6. File application for entry in the commercial register
The stock corporation must be registered in the commercial register at the company's registered office (Art. 640 OR). The same applies to the LLC (Art. 778 OR). The stock corporation only acquires its legal personality upon registration (Art. 643 Abs. 1 OR). The LLC also acquires its legal personality through the registration (Art. 779 Abs. 1 OR).
For sole proprietorships, registration in the commercial register is only mandatory starting from CHF 100'000 in sales revenue (Art. 931 Abs. 1 OR). Anyone below this limit can register voluntarily (Art. 931 Abs. 3 OR).
7. Register and organize after incorporation
After registration in the commercial register, the company is not yet fully organized. Depending on the activity, you need to take further steps:
Registration with the AHV compensation fund
Check for VAT liability
Accident insurance for employees
Occupational pension plan for employees above the BVG threshold
Business account and accounting
Contracts, general terms and conditions, data protection, and insurance
Any necessary sector licenses
With regard to VAT, the following applies: anyone who runs a business is generally liable to tax (Art. 10 Abs. 1 MWSTG). However, anyone who generates less than CHF 100'000 turnover from taxable services within one year is exempt (Art. 10 Abs. 2 lit. a MWSTG). Anyone who becomes liable to tax must register with the ESTV on their own initiative within 30 days (Art. 66 Abs. 1 MWSTG).
How much does it cost to set up a company in Switzerland?
The costs depend heavily on the legal form, canton, complexity, and advice. For a simple standard incorporation, you can roughly expect the following amounts.
Legal form | Typical external costs | Additional required capital |
|---|---|---|
Sole proprietorship | from approx. CHF 100 to CHF 500 | no minimum capital |
LLC | approx. CHF 1'000 to CHF 3'000 | CHF 20'000 share capital |
stock corporation | approx. CHF 1'500 to CHF 4'000 | at least CHF 100'000 share capital, of which at least CHF 50'000 paid up |
These amounts are guidelines. They typically cover commercial register fees, notarizations, notary fees, and document creation. The statutory capital is not a fee. It belongs to the company and is generally available for business operations after incorporation.
What accounting do you need after incorporation?
Accounting obligations depend on the legal form and turnover. Legal entities, including in particular LLCs and stock corporations, are subject to the obligation to keep books and present accounts (Art. 957 Abs. 1 Ziff. 2 OR).
Sole proprietorships and partnerships must keep regular books of account if they generated at least CHF 500'000 in sales revenue in the last financial year (Art. 957 Abs. 1 Ziff. 1 OR). Below this limit, simplified bookkeeping of income, expenditure, and assets is sufficient (Art. 957 Abs. 2 Ziff. 1 OR).
For small stock corporations and LLCs, auditing is also important. If no ordinary audit is prescribed, the annual financial statements must in principle be subject to a limited statutory examination (Art. 727a Abs. 1 OR). With the consent of all shareholders, this can be waived if the company does not have more than ten full-time positions on an annual average (Art. 727a Abs. 2 OR). This rule also applies to LLCs via references in the LLC law.
Checklist: Set up a company in Switzerland
If you want to set up your company, this compact checklist will help you.
Choose legal form: sole proprietorship, LLC, or stock corporation
Determine founders, shareholdings, and roles
Check company name
Determine registered office and business address
Formulate corporate purpose
Determine capital and open a capital payment account for an LLC or stock corporation
Prepare articles of association and incorporation documents
Clarify auditors or waiver of limited statutory examination
Carry out public notarization for LLC or stock corporation
Submit application to commercial register
Contact AHV compensation fund
Check VAT liability
Take out insurance policies
Set up accounting
Check contracts, website legal notice, data protection, and general terms and conditions
Clarify trademark and domain strategy
Frequently asked questions on starting a company in Switzerland
Can I start a company without being in the commercial register?
Yes, this is possible for a sole proprietorship as long as there is no obligation to register. The obligation arises when a natural person runs a business and has achieved at least CHF 100'000 in sales revenue in the last financial year (Art. 931 Abs. 1 OR). Below this threshold, registration is voluntary (Art. 931 Abs. 3 OR).
When is an LLC worthwhile instead of a sole proprietorship?
An LLC is often worthwhile if you want to clearly separate the business activity from your private person, form a company with partners, or present yourself more professionally. For this, you need at least CHF 20'000 of share capital (Art. 773 Abs. 1 OR) and a public deed of incorporation (Art. 777 Abs. 1 OR).
How long does it take to set up a company in Switzerland?
A simple sole proprietorship can start very quickly. For an LLC and stock corporation, the duration depends on the preparation, bank, notary, and commercial register office. Official information from the federal government states a range from a few days to several weeks for entry in the commercial register, depending on complexity and workload.
Do I have to register for VAT immediately?
Not always. Anyone who generates less than CHF 100'000 turnover per year from taxable services is generally exempt from tax liability (Art. 10 Abs. 2 lit. a MWSTG). As soon as it is foreseeable that the threshold will be reached, the VAT liability must be checked in good time. Anyone who becomes liable to tax must register with the ESTV within 30 days (Art. 66 Abs. 1 MWSTG).
