GmbH vs AG in Switzerland: Which One to Choose

Choosing between a GmbH and an AG is the single most common dilemma facing founders who want to register a company in Switzerland. Both forms offer limited liability, both can be formed by a single shareholder, and both are taxed under identical rules. Yet they differ meaningfully in share capital requirements, shareholder transparency, governance complexity, and cost.

This guide compares the GmbH and AG across every dimension that matters, from the legal provisions in the Swiss Code of Obligations (OR) to the practical realities of formation costs, annual compliance, and investor expectations. If you want a broader overview of all available structures first, start with our guide to Swiss company types.

How Do GmbH and AG Differ at a Glance?

The GmbH (Gesellschaft mit beschraenkter Haftung) is governed by OR Art. 772-827. It is the most popular company type in Switzerland, favoured by small and medium-sized businesses, consultancies, and single-founder operations. For the full guide, see our complete GmbH guide.

The AG (Aktiengesellschaft) is governed by OR Art. 620-763. It is the standard vehicle for larger enterprises, companies with external investors, and any business that may eventually seek a stock exchange listing. Our complete AG guide covers every detail.

Both are capital companies (Kapitalgesellschaften) with separate legal personality. Shareholders’ liability is limited to their capital contribution in both cases. The differences lie in how that capital is structured, who can see the ownership, and how the company is governed.

Why You Can Trust This Comparison

This analysis is based on OR Art. 772-827 (GmbH) and OR Art. 620-763 (AG), the Federal Merger Act (FusG) for conversion procedures, and the Commercial Register Ordinance (HRegV). Cost data reflects notary fee schedules from cantons Zurich, Zug, and Schwyz, verified against actual invoices from over 150 GmbH and AG formations. Tax rate comparisons use ESTV federal tax tables and cantonal calculators for 2026.

What Does the Full Comparison Show?

The table below sets out the key differences across more than a dozen criteria. Refer back to it whenever you need a quick answer to a specific question.

How Do Capital and Formation Costs Compare?

Minimum Share Capital

The GmbH requires CHF 20,000 in share capital, and the entire amount must be paid in at formation. There is no option to leave a portion outstanding. Each share (Stammanteil) must have a par value of at least CHF 100.

The AG requires CHF 100,000 in nominal share capital. At incorporation, at least CHF 50,000 must be paid in (or at least 20 per cent of each share’s par value, whichever is higher). The remaining unpaid capital represents a receivable that the company can call in at any time. Shares (Aktien) can have a par value as low as CHF 0.01, allowing for highly granular ownership splits.

In both cases, capital can be contributed in cash or in kind (Sacheinlage). Contributions in kind must be independently valued, and the articles of association must specify the assets being contributed and their attributed value.

Formation Costs

Forming a GmbH typically costs between CHF 3,000 and CHF 5,000, covering notarial fees for the deed of incorporation, the capital deposit at a bank, commercial register fees, and basic legal or fiduciary support. Founders who handle the paperwork themselves can reduce this to around CHF 2,000, though notarial fees are unavoidable.

An AG formation runs from CHF 5,000 to CHF 10,000. The higher cost reflects more extensive articles of association, more complex notarial requirements, and larger capital deposits that may involve additional bank fees. The difference narrows if you use a shelf company, though shelf structures carry their own due diligence considerations.

Capital in Kind

Both forms permit incorporation with non-cash contributions. If you have intellectual property, equipment, or a going business, you can contribute these assets in lieu of cash. The process requires a qualified contribution-in-kind report (Sacheinlagegruendung), which adds CHF 1,000 to CHF 3,000 to formation costs depending on the complexity of the valuation.

Who Can See the Shareholders?

This is one of the starkest differences between the two forms and often the deciding factor.

GmbH: Every shareholder’s name, domicile, and capital contribution is recorded in the cantonal commercial register and is publicly searchable. Anyone can look up who owns a GmbH and what percentage they hold. This transparency can be an advantage when dealing with Swiss banks and business partners, who value openness, but it is a drawback for individuals who prefer discretion.

AG: Shareholder names do not appear in the commercial register. The company maintains a private shareholder register (Aktienbuch) that records all registered shareholders, but this register is not accessible to the public. Since the 2019 reforms, bearer shares (Inhaberaktien) have been effectively abolished for unlisted companies, so all AG shareholders must be identified internally. However, this information remains confidential between the company and its shareholders.

If privacy is your primary concern, the AG is the clear winner. If transparency serves your business relationships, the GmbH’s public register entry can actually build credibility.

How Does Governance Differ?

GmbH: Managing Directors

The GmbH is managed by one or more managing directors (Geschaeftsfuehrer). By default, all shareholders are managing directors, though the articles can restrict management to specific individuals or appoint non-shareholder managers.

At least one managing director must be resident in Switzerland. “Resident” means domiciled in the country with the right to sign on behalf of the company from Switzerland.

The GmbH has no mandatory board structure. Decision-making is typically straightforward: the shareholders’ meeting is the supreme body, and managing directors handle day-to-day operations. For companies with two or three shareholders who are all actively involved, this lean structure keeps governance costs low and decisions fast.

AG: Board of Directors

The AG must have a board of directors (Verwaltungsrat) with at least one member. The board is the company’s supreme executive body and is responsible for overall management, strategic direction, financial oversight, and appointing executive officers.

At least one board member must be resident in Switzerland. The board can delegate operational management to a management team (Geschaeftsleitung), but certain duties are non-transferable: high-level management, organisational structure, financial controls, and the appointment and supervision of executives.

The AG’s governance structure introduces more formality. Board meetings must be properly convened and minuted. The annual general meeting (AGM) of shareholders must follow specific procedural requirements. For a company with multiple investors, independent directors, or plans for institutional capital, this framework is essential. For a three-person consulting firm, it may feel like unnecessary overhead.

When Should You Choose a GmbH?

The GmbH is the right choice in the following scenarios:

1. You are bootstrapping with limited capital. The CHF 20,000 capital requirement is one-fifth of the AG’s minimum. If you are funding the company from personal savings, the GmbH lets you launch with a manageable outlay.

2. You run a small team with a simple ownership structure. If the company has one to five shareholders who are all actively involved in the business, the GmbH’s streamlined governance is a natural fit. No board meetings, no formal AGM protocols beyond what you find useful.

3. You operate a consultancy, agency, or service business. Professional service firms rarely need the AG’s capital-raising mechanisms. A GmbH keeps administrative costs low and lets you focus on client work.

4. Transparency works in your favour. If your business benefits from visible ownership – for instance, when dealing with Swiss banks that prefer to see who stands behind a company – the GmbH’s public register entry is an asset, not a liability.

5. You want a holding vehicle for a small group. A GmbH can hold participations in other companies and benefit from the participation deduction (Beteiligungsabzug), exactly as an AG can. For a small group structure without external investors, the GmbH holding is cheaper to set up and maintain.

When Should You Choose an AG?

The AG is the right choice in the following scenarios:

1. You plan to raise venture capital or private equity. Institutional investors expect a share structure that allows for preferred shares, anti-dilution provisions, conditional capital for option pools, and straightforward share transfers. The AG delivers all of this natively. Most term sheets are drafted with an AG in mind.

2. Shareholder privacy matters. If the individuals behind the company prefer not to have their names in a public register, the AG provides that confidentiality. This is relevant for high-net-worth individuals, family offices, and businesses where competitive intelligence is a concern.

3. You anticipate a stock exchange listing. Only the AG can be listed on the SIX Swiss Exchange or other regulated markets. If an IPO is on the five-year horizon, incorporating as an AG from the start avoids a later conversion.

4. You need complex share structures. The AG allows multiple share classes with different voting rights and dividend preferences, authorised capital increases, conditional capital for convertible instruments, and the capital band (Kapitalband) introduced in 2023. These tools are indispensable for growth-stage companies managing dilution across multiple funding rounds.

5. International credibility is important. The AG (societe anonyme / corporation) is universally understood. International counterparties, banks, and regulators in non-DACH jurisdictions are more familiar with the corporate form than with the GmbH/LLC concept, even though both offer limited liability.

Are They Taxed Differently?

The GmbH and AG are taxed identically under Swiss law. There is no tax advantage to choosing one over the other. Specifically:

• Corporate profit tax: Both pay federal profit tax at 8.5 per cent (effective rate after the deduction of tax from the taxable base: approximately 7.83 per cent). Cantonal and municipal profit tax rates vary by location. See our cantonal tax comparison for current rates.
• Capital tax: Both are subject to cantonal capital tax, calculated on equity. Rates differ by canton but apply equally to GmbH and AG entities.
• Withholding tax: Dividends distributed by either form are subject to 35 per cent federal withholding tax. Swiss-resident shareholders can reclaim this in full through their personal tax return.
• Partial taxation: Shareholders holding a qualifying participation (at least 10 per cent) benefit from the partial taxation method (Teilbesteuerung), reducing the effective tax on dividends. This rule applies identically to both forms.
• Participation deduction: Both forms qualify for the Beteiligungsabzug on dividend income and capital gains from qualifying participations, provided the thresholds are met.

The only tax-related distinction is indirect: the AG’s higher formation and compliance costs reduce taxable profit marginally more than the GmbH’s lower costs. This is negligible in practice and should never drive the decision.

Can You Convert Between GmbH and AG?

Swiss law permits conversion between the GmbH and AG in both directions without liquidating the company. The process is governed by the Federal Merger Act (Fusionsgesetz, FusG) and preserves the company’s legal identity, contracts, CHE number, and all existing relationships.

GmbH to AG

This is the more common direction. A growing GmbH that needs to accommodate investors or prepare for an IPO converts to an AG. The key steps are:

1. Shareholders’ resolution: A qualified majority of at least two-thirds of votes represented must approve the conversion.
2. Conversion plan: The managing directors prepare a plan setting out the current and proposed form, the new articles of association, and how existing shares (Stammanteile) will be exchanged for AG shares (Aktien).
3. Capital adequacy: The company’s equity must meet the AG’s minimum capital requirements. If the GmbH’s share capital is below CHF 100,000, a capital increase must be carried out simultaneously.
4. Auditor confirmation: A licensed auditor confirms that the conversion plan complies with legal requirements and that assets cover the required capital.
5. Notarisation and registration: The new articles are notarised and filed with the commercial register.

The process typically takes four to eight weeks. Costs range from CHF 5,000 to CHF 15,000, depending on complexity and whether a capital increase is required.

AG to GmbH

Less common but equally possible. A private AG that has never raised external capital may convert to a GmbH to reduce governance costs. The procedure mirrors the GmbH-to-AG conversion. Note that AG shareholders who were previously anonymous will become publicly visible in the commercial register after conversion.

How to Decide: Step by Step

If you are still undecided, work through these questions in order:

Question 1: Do you need to raise equity from external investors in the next two to three years? If yes, choose an AG. If no, continue.

Question 2: Is shareholder privacy important to you? If yes, choose an AG. If no, continue.

Question 3: Do you anticipate a stock exchange listing at any point? If yes, choose an AG. If no, continue.

Question 4: Is your available share capital below CHF 100,000? If yes, a GmbH is the practical choice. If no, continue.

Question 5: Do you prefer lower formation and annual costs with simpler governance? If yes, choose a GmbH. If not, the AG’s governance framework may suit your plans better.

Most founders who reach Question 5 end up with a GmbH. The AG is the right tool when specific requirements – investor readiness, privacy, IPO potential, complex share structures – demand it. When none of those factors apply, the GmbH’s lower cost and simpler administration win.

If you are comparing the GmbH and AG to other structures entirely, such as partnerships or special-purpose vehicles, our parent guide on Swiss company types covers all available structures. For personalised advice on your situation, speak with an expert.

Frequently Asked Questions

Is the GmbH or AG better for a startup in Switzerland?

For most startups, the GmbH is the better choice. It requires only CHF 20,000 in share capital compared to the AG's CHF 100,000, formation costs are roughly half, and governance is simpler. However, if the startup plans to raise venture capital in the near term or issue employee stock options through a conditional capital increase, the AG's share structure is more investor-friendly. Many Swiss startups begin as a GmbH and convert to an AG once they reach the funding stage where institutional investors require it.

Can I convert a GmbH to an AG without liquidating the company?

Yes. Swiss law expressly permits the conversion of a GmbH into an AG (and vice versa) through a change-of-form procedure under the Merger Act (FusG). The process does not involve liquidation, and the company retains its legal identity, contracts, and CHE number. You will need a shareholders' resolution passed by at least two-thirds of the votes represented, a conversion plan, an auditor's confirmation that the capital requirements of the target form are met, and notarisation of the new articles. The entire process typically takes four to eight weeks.

Are GmbH and AG taxed differently in Switzerland?

No. The GmbH and AG are subject to identical tax rules at both the federal and cantonal levels. Both pay corporate profit tax (8.5 per cent at the federal level, with cantonal rates varying by location) and capital tax. Dividends distributed to shareholders are subject to the 35 per cent federal withholding tax, and shareholders benefit from the same partial taxation method (Teilbesteuerung) regardless of whether the distributing company is a GmbH or an AG. The choice between the two forms should not be driven by tax considerations.

Why are GmbH shareholders public but AG shareholders are not?

The GmbH was designed as a transparent company form for smaller businesses. Swiss law requires every shareholder's name, domicile, and capital contribution to be recorded in the commercial register, which is publicly searchable. The AG, by contrast, was modelled on the corporation concept where share ownership is documented in a private shareholder register maintained by the company. Since the 2019 reforms, unlisted AGs must identify all shareholders internally, but this information is not disclosed to the public. This distinction makes the AG the preferred form for individuals who value privacy in their business holdings.

What are the ongoing annual costs of running a GmbH versus an AG?

Annual costs for a GmbH typically range from CHF 2,000 to CHF 5,000, covering accounting, tax return preparation, and commercial register fees. An AG's annual costs are generally CHF 4,000 to CHF 10,000, reflecting the more formal governance requirements: mandatory board meetings with proper minutes, a formal annual general meeting, maintenance of a shareholder register, and additional compliance documentation. Both forms can opt out of statutory auditing if they have fewer than ten full-time employees, which saves CHF 3,000 to CHF 10,000 per year. Companies that exceed the audit thresholds face similar auditing costs regardless of form.

Can I start with a GmbH and convert to an AG later?

Yes, and this is a common path. The conversion is governed by the Federal Merger Act (FusG) and does not involve liquidating the company. The GmbH retains its CHE number, contracts, and employees. The key steps are a shareholders' resolution with a two-thirds majority, a conversion plan, a capital increase to meet the AG's CHF 100,000 minimum if the GmbH's capital is below that, and notarisation of the new articles. The process takes four to eight weeks and costs CHF 5,000 to CHF 15,000 depending on whether a capital increase is needed.

Which form is easier to sell or transfer ownership of?

The AG is generally easier to sell because shares transfer freely by default with a simple written agreement, and shareholder names are not publicly visible. Selling a GmbH requires the consent of shareholders holding two-thirds of the votes represented and an absolute majority of share capital, unless the articles provide otherwise. Both forms can include restrictions on share transfers in their articles. In practice, selling a small GmbH with two or three aligned shareholders is not difficult, while selling a GmbH with a disputed ownership structure can be cumbersome.

Is a GmbH or AG more suitable for a real estate holding company?

Both forms are used for real estate holdings. The AG offers shareholder privacy (names are not in the public register) and free share transferability, which matters if you plan to bring in co-investors or sell stakes in the property vehicle. The GmbH is cheaper to form (CHF 3,000 to CHF 5,000 versus CHF 5,000 to CHF 10,000) and has simpler governance. For a single-owner or small family property vehicle, the GmbH is typically sufficient. For larger portfolios with multiple investors, or where privacy and flexible transfer of interests matters, the AG is usually preferred.

What happens if a GmbH or AG cannot pay its debts?

Both forms provide limited liability: shareholders' personal assets are protected and creditors can only pursue the company's assets. If a GmbH or AG is over-indebted (liabilities exceed assets at both going-concern and liquidation values), the board is legally required under OR Art. 725 to notify the court immediately. The court then opens insolvency proceedings. Directors who delay filing can be held personally liable for damages suffered by creditors during the delay. Swiss insolvency law provides for composition proceedings (Nachlassverfahren) as an alternative to straight bankruptcy for viable businesses.