The governance structure of a Swiss company depends on whether it is organised as an AG (Aktiengesellschaft, corporation) or a GmbH (Gesellschaft mit beschraenkter Haftung, limited liability company). Both require at least one person with signatory authority who is resident in Switzerland — a rule that the 2023 corporate law reform made explicit and that commercial register offices enforce strictly.
This guide covers the rules for both structures. For the full formation process, see our AG guide and GmbH guide. For the nominee director solution used by foreign founders, see nominee director.
What is the board of directors in a Swiss AG?
The board of directors (Verwaltungsrat, VR) is the supreme governing body of an AG. Its authority and duties are defined in OR Art. 707-726.
Composition
| Rule | Requirement |
|---|---|
| Minimum members | 1 |
| Maximum members | No limit (articles may specify) |
| Natural persons only | Yes — no legal entities |
| Nationality | Any |
| Residency | At least one member with signatory authority must be resident in Switzerland |
| Shareholder requirement | No (unless articles require it) |
| Term | Set by articles, typically 1-3 years, re-election permitted |
The board is elected by the general meeting (Generalversammlung) of shareholders. In a single-founder AG, the founder elects themselves as the sole board member.
Non-transferable duties
Under OR Art. 716a, certain duties cannot be delegated away from the board:
- Overall management and direction of the company
- Determination of the organisational structure
- Organisation of accounting, financial control, and financial planning
- Appointment and removal of management and signatory authority
- Overall supervision of management
- Preparation of the annual report and the general meeting
- Notification of the court in case of over-indebtedness (OR Art. 725)
- Resolutions on capital increases and related amendments
Even if the board delegates day-to-day management to a CEO or Direktion, these seven duties remain with the board itself.
What is the management of a Swiss GmbH?
A GmbH does not have a board of directors. Instead, it has one or more managing directors (Geschaeftsfuehrer), governed by OR Art. 798-814.
| Rule | Requirement |
|---|---|
| Minimum managing directors | 1 |
| Maximum | No limit |
| Must be a shareholder? | No (but at least one managing director must be a shareholder by default — the articles can waive this) |
| Residency | At least one person with signatory authority must be resident in Switzerland |
By default, all shareholders are jointly entitled to manage the GmbH (OR Art. 809). In practice, the articles of association designate specific managing directors and exclude others from management. A common structure: one managing director (the founder) with full operational authority, and a second person (nominee or local fiduciary) with collective signatory authority to satisfy the residency requirement.
Key differences from AG board
| Aspect | AG (Verwaltungsrat) | GmbH (Geschaeftsfuehrer) |
|---|---|---|
| Elected by | General meeting | Shareholders (per articles) |
| Default management right | Board members | All shareholders |
| Shareholder must be member? | No | At least one (default, waivable) |
| Organisational regulations | Common for delegation | Less common |
| Liability framework | OR Art. 754 | OR Art. 827 (references AG rules) |
What are the residency requirements?
Since the 2023 corporate law reform, the residency requirement is codified in OR Art. 718(4) (AG) and OR Art. 814(3) (GmbH):
At least one person authorised to represent the company must be domiciled in Switzerland.
“Domiciled in Switzerland” means:
- Registered with a Swiss commune (Einwohnerkontrolle)
- Holding a valid residence permit (Swiss citizen, B, C, L, or Ci permit)
- Physically present in Switzerland as their primary place of residence
What does NOT satisfy the requirement:
- A Swiss postal address or P.O. box
- A virtual office address
- A c/o address at a fiduciary
- Registration in a neighbouring country (even Liechtenstein or the French border zone)
The commercial register office (Handelsregisteramt) verifies residency at the time of registration and may request a Wohnsitzbescheinigung (certificate of domicile) from the commune. If the last resident director departs Switzerland and no replacement is registered, the register office will set a deadline for compliance — failure to comply can lead to dissolution proceedings.
Practical solutions for foreign founders
| Situation | Solution |
|---|---|
| Founder lives in the EU, plans to relocate | Apply for B permit, register company after commune registration |
| Founder lives outside Europe, not relocating | Appoint a nominee director with Swiss residency |
| Founder has Swiss C permit | No issue — serves as resident director directly |
| Founder has L permit (short-term) | Valid, but L permits are temporary — plan for renewal or conversion to B |
What are the duties of Swiss directors?
Directors owe the company a duty of care (Sorgfaltspflicht) and a duty of loyalty (Treuepflicht) under OR Art. 717:
Duty of care
Directors must act with the diligence that a reasonably competent person would exercise in the same position. This includes:
- Attending board meetings and staying informed about the company’s affairs
- Reviewing financial statements and management reports
- Ensuring adequate internal controls and risk management
- Acting on early warning signs of financial distress
- Complying with legal obligations (tax, social insurance, regulatory filings)
The standard is objective — personal inexperience or lack of qualifications is not a defence. A director who accepts the role accepts the responsibility.
Duty of loyalty
Directors must prioritise the company’s interests over their own. Specific obligations:
- Conflicts of interest must be disclosed to the board immediately (OR Art. 717a, new since 2023). A conflicted director must recuse themselves from the relevant decision.
- Business opportunities belonging to the company may not be diverted to the director’s personal benefit.
- Confidentiality — business secrets must be protected during and after the term of office.
- Non-competition — active competition with the company during the term of office is prohibited without board approval.
Over-indebtedness notification (OR Art. 725)
If the board has reasonable grounds to suspect that the company’s liabilities exceed its assets (Ueberschuldung), it must:
- Prepare an interim balance sheet at liquidation values
- Have it audited (unless the company has opted out of audit)
- If over-indebtedness is confirmed, notify the competent court without delay
Failure to notify the court in time is one of the most common triggers for personal director liability. The board may delay notification only if there is a realistic prospect of restructuring within a reasonable period and creditors are not further prejudiced.
What personal liability do directors face?
Under OR Art. 754 (AG) and OR Art. 827 (GmbH), directors are personally and individually liable for damages caused by intentional or negligent breach of their duties. Claims can be brought by:
- The company itself
- Individual shareholders (derivative action)
- Creditors (in bankruptcy)
Most common liability triggers:
| Trigger | Legal Basis | Typical Consequence |
|---|---|---|
| Failure to remit social insurance contributions | AHVG Art. 52 | Personal liability for unpaid AHV/IV/EO + 5% interest |
| Late over-indebtedness notification | OR Art. 725 | Liability for the increase in losses between the date notification should have occurred and when it did |
| Trading while insolvent | OR Art. 754 | Liability for new debts incurred after insolvency should have been recognised |
| Unlawful dividend distribution | OR Art. 678 | Obligation to return dividends paid from capital or reserves |
| Tax fraud or wilful non-payment | DBG Art. 55 | Personal subsidiary liability for corporate tax debts |
D&O insurance (Directors & Officers liability insurance) is available and increasingly common. Annual premiums for a small AG or GmbH range from CHF 1,000 to CHF 5,000 depending on company size, industry, and coverage limits. D&O insurance covers defence costs and damages but typically excludes intentional misconduct and criminal fines.
How is director compensation structured?
Swiss law does not prescribe minimum or maximum director compensation. The general meeting (AG) or shareholder resolution (GmbH) determines compensation.
Common structures for private companies:
| Component | Description |
|---|---|
| Fixed board fee | Annual amount for board membership (CHF 10,000-50,000 for small AGs) |
| Meeting attendance fees | Per-meeting payment (CHF 500-2,000) |
| Salary (if executive) | Full employment salary if the director also serves as CEO/managing director |
| Bonus / profit participation | Performance-based, typically agreed annually |
Tax treatment:
- Board fees and salaries are subject to AHV/IV/EO contributions and income tax
- Board fees paid to a self-employed director (e.g., a fiduciary serving on multiple boards) are subject to self-employed AHV contributions
- See our social insurance guide for the director salary-dividend rules
For owner-directors: the compensation is effectively the salary drawn from the company. The salary-dividend split matters for social insurance — see the 60/40 rule in our social insurance guide.
How do you appoint and remove directors?
AG
Appointment: board members are elected by the general meeting of shareholders by simple majority (OR Art. 698). The articles may specify qualified majorities for certain appointments. Board members must consent to their appointment, and the appointment must be registered with the commercial register within 30 days.
Removal: the general meeting can remove any board member at any time without cause (OR Art. 705). The removal takes effect immediately upon the shareholder resolution — it does not require the director’s consent. The removed director may have a contractual claim for compensation if a fixed-term service agreement exists.
GmbH
Appointment: managing directors are designated by the shareholders per the articles of association or by shareholder resolution (OR Art. 809). At least one managing director must be a shareholder unless the articles explicitly waive this requirement.
Removal: shareholders can remove a managing director by resolution at any time (OR Art. 815). As with the AG, removal is effective immediately and must be registered with the commercial register.
Commercial register filing for both appointment and removal requires:
- Certified copy of the shareholder/board resolution
- Identification of the new director (passport, residence permit)
- Proof of residency if the new director satisfies the residency requirement
- Signature specimen (Unterschriftsbeglaubigung)
Processing time: typically one to two weeks at the cantonal commercial register office.
What solutions exist for non-resident founders?
Foreign founders who cannot satisfy the residency requirement have three practical options:
1. Nominee director. A Swiss-resident person (typically a licensed fiduciary) is appointed as a director with signatory authority. The nominee acts within the bounds of a mandate agreement (Mandatsvertrag) and does not take operational decisions without the founder’s instruction. Cost: CHF 3,000-8,000 per year. See our nominee director guide for the full process.
2. Relocate to Switzerland. Apply for a residence permit (B permit for EU/EFTA citizens, or an entrepreneur/investor route for others), register with a Swiss commune, then serve as the resident director directly. This is the cleanest solution if the founder plans to be present in Switzerland. See our work permit guide for the process.
3. Appoint a local co-founder or employee. If the company has a Swiss-based co-founder, employee, or business partner, that person can serve as the resident director. This avoids the cost of a nominee but requires trust — the person will have signatory authority over the company.
Why you can trust this guide
This guide is written by Florian Rosenberg, a former fiduciary office manager who has structured board compositions and signatory arrangements for over 200 Swiss companies. All legal references cite the governing provisions — OR Art. 707-726 (AG) and OR Art. 798-814 (GmbH). Verify any point against the primary source.