Founding a company in Switzerland: Process, costs and checklist

Which legal form is suitable if you want to start 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 variants are usually in the foreground.

The sole proprietorship is the simplest. It arises de facto with the start of independent business activity. 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, the entry 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 is legally created by being entered in the commercial register (Art. 777 Abs. 1 OR, Art. 779 Abs. 1 OR).

The Stock corporation is particularly suitable if investors, shareholdings, or a stronger separation between company and owners are important. The share capital is at least CHF 100'000 (Art. 621 Abs. 1 OR). At completion, 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 foundation work in Switzerland?

You typically form a company in Switzerland in seven steps. The exact process depends on whether you are founding 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 company should work. In particular, the following are important:

• Who is co-founding?

• How high is the start-up capital?

• Should personal liability be limited?

• Do you need investors?

• Do you plan on having employees?

• Is your turnover expected to quickly exceed CHF 100'000?

If you need support with the topic of foundation, Jurata is happy to help you at any time: 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 LLC and stock corporation can generally choose their company 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. Therefore, it is worth researching in the commercial register before founding and, depending on the project, also doing a trademark check.

3. Determine capital and investments

There is no statutory minimum capital for sole proprietorships. For an LLC, you must contribute at least CHF 20'000 share capital (Art. 773 Abs. 1 OR). The articles of association of the LLC must contain, among other things, the name, registered office, purpose, share capital, as well as 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). For founders, it is particularly important that at least CHF 50'000 must be paid up upon establishment (Art. 632 Abs. 2 OR).

4. Prepare foundation documents

For an LLC and stock corporation, you need foundation documents. These typically include the articles of association, deed of incorporation, commercial register application, and, depending on the case, additional receipts.

For a stock corporation, the commercial register application must be accompanied, among other things, by the public deed of incorporation, the articles of association, declarations of acceptance of election by the members of the board of directors and, if applicable, the declaration of acceptance by the auditors (Art. 43 Abs. 1 HRegV). For an LLC, the Commercial Register Ordinance also requires the public deed, the articles of association, declarations of acceptance of election by the managing directors and, if applicable, audit documents (Art. 71 Abs. 1 HRegV).

If there are contributions in kind, set-offs, or special advantages, the foundation becomes more demanding. Then additional documents such as contribution in kind agreements, foundation report, and audit confirmation may be required (Art. 43 Abs. 3 HRegV, Art. 71 Abs. 3 HRegV).

5. Carry out public certification

LLC and stock corporation are founded by a public deed. In the case of a stock corporation, the founders declare in a public deed that they are founding a stock corporation, determine the articles of association, and appoint the corporate bodies (Art. 629 Abs. 1 OR). It works similarly for an LLC. The founders declare in a publicly certified deed that they are founding an LLC, determine the articles of association, and appoint the corporate bodies (Art. 777 Abs. 1 OR).

6. Register commercial register entry

The stock corporation must be entered in the commercial register at the registered office of the company (Art. 640 OR). The same applies to the LLC (Art. 778 OR). Only with the entry does the stock corporation receive its legal personality (Art. 643 Abs. 1 OR). The LLC also obtains its legal personality through the entry (Art. 779 Abs. 1 OR).

For sole proprietorships, the entry in the commercial register is only compulsory 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 foundation

After being entered in the commercial register, the company is not yet fully organized. Depending on the activity, you need further steps:

• Registration with the AHV compensation fund

• Checking tax liability for VAT

• Accident insurance for employees

• Occupational pension planning for employees above the BVG threshold

• Business account and accounting

• Contracts, general terms and conditions, data protection, and insurance

• Any industry permits

For 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 in 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).

What does it cost to start a company in Switzerland?

The costs depend heavily on the legal form, canton, complexity, and advice. For a simple standard foundation, you can roughly calculate with the following amounts.

These amounts are guidelines. They typically include commercial register fees, notary certifications, notary, and document creation. The statutory capital is not a fee. It belongs to the company and is generally available for business operations after the foundation.

In the case of the LLC, the KMU-Portal des Bundes mentions, in addition to the share capital, advisory costs, notary fees, and commercial register fees as guidance. For simple foundations, the costs can often be kept lower. With contributions in kind, complex investments, or special articles of association, they rise.

What bookkeeping do you need after the foundation?

The bookkeeping obligations depend on the legal form and turnover. Legal entities, especially LLC and stock corporation, are subject to the obligation of bookkeeping and accounting (Art. 957 Abs. 1 Ziff. 2 OR).

Sole proprietorships and partnerships must keep proper books if they have achieved at least CHF 500'000 in sales revenue in the last business year (Art. 957 Abs. 1 Ziff. 1 OR). Below this, simplified bookkeeping of income, expenditures, and asset situation is sufficient (Art. 957 Abs. 2 Ziff. 1 OR).

For small stock corporations and LLCs, the audit 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, it 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 the LLC via references in the LLC law.

Checklist: Found a company in Switzerland

If you want to found your company, this compact checklist will help you.

• Choose legal form: Sole proprietorship, LLC, or stock corporation

• Define founders, shares, and roles

• Check company name

• Determine registered office and business address

• Formulate purpose

• Determine capital and, for LLC or stock corporation, open capital contribution account

• Prepare articles of association and foundation documents

• Clarify auditing office or waiver of limited statutory examination

• Carry out public certification for LLC or stock corporation

• Submit commercial register application

• Contact AHV compensation fund

• Check tax liability for VAT

• Take out insurances

• Set up accounting

• Check contracts, website imprint, data protection, and general terms and conditions

• Clarify trademark and domain strategy

Frequently asked questions about starting a company in Switzerland

Can I start a company without being in the commercial register?

Yes, with a sole proprietorship this is possible as long as there is no registration obligation. The obligation arises when a natural person runs a business and has achieved at least CHF 100'000 in sales revenue in the last business year (Art. 931 Abs. 1 OR). Below this threshold, registration is voluntary (Art. 931 Abs. 3 OR).

When is an LLC worth it instead of a sole proprietorship?

An LLC is often worth it if you want to separate the business activity clearly from your private self, found with partners, or want to appear more professional. For this you need at least CHF 20'000 share capital (Art. 773 Abs. 1 OR) and public certification (Art. 777 Abs. 1 OR).

How long does it take to start 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 mentions a range of a few days to several weeks for the commercial register application, depending on the complexity and workload.

Do I have to register for VAT immediately?

Not always. Anyone who generates less than CHF 100'000 in 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).