Swiss GmbH (LLC): Formation, Capital & Requirements

The GmbH – Gesellschaft mit beschraenkter Haftung – is the Swiss equivalent of a limited liability company (LLC). Governed by OR Art. 772-827 of the Swiss Code of Obligations, it combines limited liability protection with a lean governance structure, making it the default legal form for small and medium-sized businesses, startups, and single-founder ventures throughout Switzerland.

Roughly 45 per cent of all new company registrations in Switzerland are GmbHs. The reasons are straightforward: a manageable minimum capital of CHF 20,000, full liability protection for shareholders, and fewer governance formalities than the AG (corporation). Whether you are launching a consultancy, an e-commerce business, or a technology startup, the GmbH is likely where your analysis begins.

This guide covers every aspect of the Swiss GmbH in detail – from formation steps and capital rules to management requirements, annual obligations, and costs. For a comparison of all available structures, see our overview of company types in Switzerland.

What Is a Swiss GmbH?

The GmbH (Gesellschaft mit beschraenkter Haftung, literally “company with limited liability”) is a capital company under Swiss law. In French-speaking cantons, it is known as Sarl (societe a responsabilite limitee); in Italian-speaking cantons, Sagl (societa a garanzia limitata).

It occupies a middle ground between the simplicity of a sole proprietorship and the formality of an AG. Like an AG, the GmbH is a legal entity in its own right – it can own assets, enter into contracts, sue, and be sued. Unlike an AG, its shareholder structure is transparent: every quota holder’s name, domicile, and capital contribution appears in the commercial register.

The GmbH was substantially modernised in the 2008 revision of the Code of Obligations (in force since 1 January 2008). That revision abolished the previous requirement of at least two founders, introduced the possibility of a single-shareholder GmbH, and aligned many provisions with AG law. Further refinements came with the 2023 corporate law reform, which introduced the capital band (Kapitalband) mechanism for both GmbH and AG.

Key Facts at a Glance

Why You Can Trust This Guide

This guide references OR Art. 772-827 directly, incorporating the 2023 corporate law reform provisions on the capital band (Kapitalband). Formation costs are based on published notary fee schedules from Zurich, Zug, Lucerne, and Geneva, cross-checked against invoices from over 200 GmbH formations handled by our team. Tax rates use 2026 data from the Federal Tax Administration (ESTV) and cantonal tax offices. Audit thresholds reference OR Art. 727a and the Swiss Audit Oversight Authority (RAB) guidelines.

How to Form a GmbH in Switzerland

The formation process involves seven steps, each with specific legal requirements. With proper preparation, you can move from initial planning to a registered company in two to four weeks.

Step 1: Choose and Verify the Company Name

The company name must include “GmbH” (or “Sarl” / “Sagl” in French or Italian). It must be distinguishable from any existing company name in Switzerland. Check availability on Zefix, the central business name index maintained by the Federal Commercial Registry Office (EHRA). The EHRA has the final say on name approval, so an informal Zefix search is necessary but not conclusive.

Step 2: Draft the Articles of Association

The articles of association (Statuten) form the constitutional document of the GmbH. They must be drafted before the notarial deed and cover the mandatory content prescribed by OR Art. 776 (see the detailed section below).

Step 3: Open a Capital Deposit Account

Contact a Swiss bank to open a Kapitaleinzahlungskonto (capital deposit account). The full share capital of at least CHF 20,000 must be deposited into this blocked account before the notarial deed. The bank issues a capital deposit confirmation (Kapitaleinzahlungsbestaetigung), which the notary requires for the formation deed. Some banks take one to two weeks to open this account, so start early.

Step 4: Execute the Notarial Deed

The formation of a GmbH requires a public deed (oeffentliche Urkunde) drawn up by a notary. All founders must attend the notarial session – either in person or through a representative holding a notarised power of attorney. During the session, the notary certifies the adoption of the articles, the appointment of managing directors, and the designation of the auditor (or the opting-out declaration).

Step 5: File with the Commercial Register

After notarisation, the notary typically submits the registration application to the cantonal commercial register office (Handelsregisteramt). Required documents include the notarial deed, articles of association, capital deposit confirmation, specimen signatures of managing directors, and a declaration of acceptance from the auditor (if applicable).

Step 6: Registration and Publication

The cantonal register reviews the application and, if everything is in order, enters the GmbH in the register. The entry is published in the Swiss Official Gazette of Commerce (SHAB, Schweizerisches Handelsamtsblatt). From the moment of registration, the GmbH has full legal personality.

Step 7: Post-Registration Steps

Once the commercial register entry is confirmed, the bank releases the deposited share capital for use. You must then register for VAT (if expected annual revenue exceeds CHF 100,000), enrol employees with the cantonal compensation office (Ausgleichskasse) for social insurance contributions (AHV/IV/EO), and set up occupational pension (BVG) coverage if you employ staff.

How Much Capital Does a GmbH Need?

The minimum share capital of a Swiss GmbH is CHF 20,000, and it must be fully paid in at formation – unlike an AG, where only 50 per cent of the capital needs to be liberated initially.

Capital contributions can be made in two ways:

• Cash contributions (Bareinlage): The standard method. Funds are deposited into the capital deposit account at a Swiss bank.
• Contributions in kind (Sacheinlage): Assets such as real estate, intellectual property, equipment, or receivables can be contributed instead of cash. This requires a qualified formation report (Gruendungsbericht) and, in most cases, an independent valuation confirming the assets’ fair market value is at least equal to the claimed contribution.

There is no statutory upper limit on share capital. A GmbH can have share capital of CHF 1 million or more if the founders choose. The capital can also be increased after formation through a formal capital increase procedure requiring shareholder approval, a notarial deed, and an updated commercial register entry.

Since the 2023 corporate law reform, the GmbH can also adopt a capital band (Kapitalband), authorising the managing directors to increase or decrease the share capital within a range of plus or minus 50 per cent over a five-year period. This mechanism, previously reserved for the AG, gives growing GmbHs more flexibility in managing their capitalisation without convening a shareholder meeting for each adjustment.

What Must the Articles of Association Contain?

The articles of association are the foundational document of the GmbH. OR Art. 776 prescribes the mandatory content:

• Company name and registered office (municipality)
• Purpose of the company (described with sufficient specificity)
• Share capital amount and the number, nominal value, and type of shares
• Form of company communications to shareholders (e.g. by letter, email, or publication in the SHAB)
• Governance structure: managing directors’ powers, voting rules, quorum requirements

Beyond the mandatory elements, the articles typically include provisions on:

• Share transfer restrictions (Vinkulierung) – by default, transfer of GmbH shares requires approval of the shareholders’ meeting (OR Art. 786)
• Non-compete obligations for shareholders or managing directors
• Preferential rights attached to specific share classes
• Grounds for exclusion of shareholders
• Liquidation provisions

The notary reviews the articles for compliance with mandatory law before executing the formation deed. Any clause that contradicts the Code of Obligations is void, regardless of whether it was notarised.

How Is Share Ownership Structured?

A GmbH can have one or more shareholders. There is no upper limit. Shareholders can be natural persons or legal entities, and there is no nationality or residency requirement for shareholders.

Each shareholder holds one or more Stammanteile (quotas or shares). Key rules governing the share structure:

• Minimum denomination: CHF 100 per share (OR Art. 774).
• Public disclosure: Every shareholder’s name, domicile, and the nominal value of their holding is recorded in the commercial register and publicly visible. This transparency is the most significant structural difference from the AG, where shareholder names remain private.
• Share transfer: By default, any transfer of GmbH shares requires approval by the shareholders’ meeting, with a majority of at least two-thirds of the votes represented and an absolute majority of the share capital (OR Art. 786). The articles can relax or tighten this requirement.
• Share classes: The GmbH can issue shares with different nominal values and attach different rights to each class, including preferential dividend rights or enhanced voting rights.

Shareholders have statutory duties alongside their rights. OR Art. 803 imposes a duty of loyalty and, where the articles provide for it, an obligation to make supplementary contributions (Nachschusspflichten) up to a maximum amount specified in the articles.

Who Can Manage a GmbH?

The GmbH is managed by one or more managing directors (Geschaeftsfuehrer). Unlike an AG, where the board of directors is a supervisory body that may delegate management, the GmbH’s managing directors both govern and manage the company.

Who can serve as managing director?

Any natural person. At least one managing director must be a shareholder, unless the articles provide otherwise (OR Art. 809). Legal entities cannot serve as managing directors of a GmbH.

Swiss residency requirement:

OR Art. 814, as amended, requires that at least one person authorised to represent the company must be domiciled in Switzerland. “Domiciled” means having a registered Swiss address – either Swiss nationality, a residence permit (B or C permit), or a cross-border commuter permit (G permit) is necessary. This requirement cannot be waived.

If all shareholders and intended directors live abroad, a Swiss-resident managing director must be appointed. In practice, fiduciaries and corporate service providers offer nominee director services for this purpose. Alternatively, our expert can advise on structuring management to satisfy the residency rule.

Signatory authority:

Managing directors are typically registered with individual or collective signatory authority (Einzelzeichnungsberechtigung or Kollektivzeichnungsberechtigung). The type of authority is recorded in the commercial register.

What Annual Obligations Apply?

Once formed, a Swiss GmbH must comply with several recurring requirements:

Financial statements: The managing directors must prepare annual financial statements comprising a balance sheet, income statement, and notes (OR Art. 957-963b). The statements must conform to Swiss accounting law. Companies exceeding certain thresholds must also prepare a cash flow statement and a management report.

Annual shareholders’ meeting: The Gesellschafterversammlung (shareholders’ meeting) must be held at least once per year, within six months of the financial year-end (OR Art. 808). The meeting approves the annual accounts, decides on the distribution of profits, and discharges the managing directors. Decisions can also be taken by circular resolution if all shareholders consent.

Commercial register notifications: Any change to the articles of association, the share capital, the managing directors, or the company’s registered office must be reported to the cantonal commercial register. Failure to notify changes is a criminal offence under OR Art. 943.

Tax filings: The GmbH must file an annual corporate tax return with the cantonal tax authority and the Federal Tax Administration. If registered for VAT, quarterly VAT returns are due.

Social insurance: If the GmbH employs staff, it must withhold and remit AHV/IV/EO contributions, accident insurance (UVG) premiums, and occupational pension (BVG) contributions.

Does a GmbH Need an Auditor?

Swiss law distinguishes three audit categories for GmbHs:

Ordinary audit (ordentliche Revision): Required if the company exceeds two of the following three thresholds in two consecutive financial years: total assets of CHF 20 million, revenue of CHF 40 million, or 250 full-time equivalent employees. Companies subject to ordinary audit must appoint a licensed audit firm under FINMA oversight.

Limited audit (eingeschraenkte Revision): The default for GmbHs that do not meet the ordinary audit thresholds. A limited audit is less extensive and less expensive than an ordinary audit. The auditor performs a review rather than a full audit and issues a negative assurance opinion.

Opting-out: If the GmbH has fewer than ten full-time equivalent employees, all shareholders may unanimously consent to waive the audit requirement entirely (OR Art. 818 in conjunction with Art. 727a). The opting-out declaration is filed with the commercial register. This is by far the most common arrangement for small GmbHs and saves CHF 3,000 to CHF 10,000 per year.

How Is a Swiss GmbH Taxed?

The GmbH is taxed identically to an AG. There is no difference in tax treatment between the two capital company forms.

Corporate income tax: Profits are taxed at the federal level (effective rate: 8.5 per cent after deducting the tax itself from the tax base) and at the cantonal/municipal level. The cantonal rate varies significantly – combined effective rates range from under 12 per cent in cantons such as Zug and Nidwalden to over 20 per cent in high-tax cantons. See the full cantonal comparison for current rates.

Capital tax: Cantons levy an annual tax on the company’s equity (share capital plus reserves). Rates are modest, typically 0.01 to 0.5 per cent of taxable equity.

Withholding tax on dividends: Dividend distributions are subject to a federal withholding tax (Verrechnungssteuer) of 35 per cent. Swiss-resident individual shareholders can reclaim this amount in full through their personal tax return. Treaty relief may reduce or eliminate withholding for foreign shareholders.

Partial taxation of dividends: Shareholders holding at least 10 per cent of the GmbH are taxed on only 50 to 70 per cent of their dividend income (the exact percentage depends on the canton). This partial taxation method (Teilbesteuerung) mitigates the economic double taxation that arises from taxing profits at the corporate level and again at the shareholder level.

VAT: The GmbH must register for VAT if its annual domestic revenue exceeds CHF 100,000. The standard VAT rate is 8.1 per cent (2026).

How Much Does It Cost to Form a GmbH?

The table below provides realistic cost ranges for forming a GmbH in Switzerland. Costs vary by canton and service provider.

The CHF 20,000 share capital is not an expense. It belongs to the company and is available for business operations once the commercial register entry is confirmed and the bank releases the blocked funds.

If you contribute capital in kind rather than cash, expect higher notary and professional fees due to the additional formation report and asset valuation requirements. For a personalised cost estimate, get in touch with the details of your planned formation.

What Are the Advantages and Disadvantages?

Advantages:

• Limited liability – shareholders’ personal assets are protected from business creditors.
• Low minimum capital of CHF 20,000, fully usable after formation.
• Simple governance with no mandatory board of directors or complex committee structures.
• Flexible share classes with customisable voting and dividend rights.
• Audit opt-out available for small companies, reducing annual compliance costs.
• Full legal personality – the GmbH can own property, hold bank accounts, and enter contracts independently.
• Straightforward conversion to an AG if the business outgrows the GmbH structure.

Disadvantages:

• Shareholder transparency – all shareholders’ names and holdings are publicly visible in the commercial register.
• Share transfers require shareholder approval by default, which can complicate exit scenarios and investor onboarding.
• Swiss residency requirement for at least one representative adds cost for foreign founders without local presence.
• Notarial deed required for formation and for most amendments to the articles, adding legal costs compared to a sole proprietorship.
• Partial economic double taxation on distributed profits (corporate tax plus dividend tax at shareholder level).

For a side-by-side comparison with the AG, including practical guidance on when to choose each form, read our GmbH vs AG analysis.

Frequently Asked Questions

How much does it cost to set up a GmbH in Switzerland?

The total cost of forming a Swiss GmbH typically ranges from CHF 3,000 to CHF 5,000. This includes notary fees of CHF 1,500 to CHF 3,000, commercial register fees of CHF 600 to CHF 800, and bank charges for opening a capital deposit account. If you engage a fiduciary or law firm to handle the entire process, their professional fees will add CHF 1,000 to CHF 2,000 on top. The CHF 20,000 share capital is not a cost — it belongs to the company and can be used for business operations once the register entry is confirmed.

Can a single person form a GmbH in Switzerland?

Yes. Swiss law permits a GmbH with a single shareholder. There is no upper limit on the number of shareholders either. The sole shareholder can also serve as the managing director, provided they meet the Swiss residency requirement — at least one person authorised to represent the company must be domiciled in Switzerland. If the sole shareholder lives abroad, they must appoint a Swiss-resident managing director.

Do GmbH shareholders appear in the public register?

Yes, and this is one of the key differences between a GmbH and an AG. Every shareholder of a Swiss GmbH is recorded in the commercial register with their name, domicile, and the nominal value of their shares (Stammanteile). This information is publicly accessible through Zefix and the cantonal registers. If shareholder privacy is a priority, the AG may be a more suitable structure, as its shareholder names do not appear in the public register.

What is the minimum share denomination for a Swiss GmbH?

Each share (Stammanteil) must have a nominal value of at least CHF 100, as prescribed by OR Art. 774. With a minimum share capital of CHF 20,000, a GmbH can therefore have a maximum of 200 shares if all are set at the minimum denomination. Shares can carry different nominal values, and the articles of association may grant preferential rights to certain share classes, such as enhanced voting rights or priority dividend entitlements.

Does a Swiss GmbH need an auditor?

Not necessarily. A GmbH with fewer than ten full-time equivalent employees can opt out of the statutory audit entirely, provided all shareholders unanimously consent to the opting-out. This exemption saves CHF 3,000 to CHF 10,000 per year in audit fees. Companies exceeding two of three thresholds — CHF 20 million in assets, CHF 40 million in revenue, or 250 FTEs — must undergo an ordinary (full) audit. All others are subject to a limited (review) audit.

How long does it take to register a GmbH in Switzerland?

The process from the notarial deed to the commercial register entry typically takes two to four weeks. The notarisation itself can be scheduled within a few days once documents are ready. The main variable is the cantonal commercial register's processing time, which ranges from five to fifteen business days depending on the canton and the complexity of the filing. Cantons such as Zug and Zurich tend to process applications faster than smaller cantons with less administrative capacity.

What taxes does a Swiss GmbH pay?

A Swiss GmbH pays federal corporate income tax at an effective rate of approximately 7.83 per cent, plus cantonal and municipal profit tax. The combined effective rate ranges from around 11.9 per cent in Zug to over 20 per cent in high-tax cantons. The company also pays an annual cantonal capital tax on its equity, typically 0.01 to 0.5 per cent. Dividend distributions to shareholders are subject to a 35 per cent federal withholding tax, which Swiss-resident shareholders can reclaim through their personal tax return.

Can a GmbH be converted to an AG in Switzerland?

Yes. Swiss law expressly permits conversion from a GmbH to an AG through a change-of-form procedure under the Federal Merger Act (FusG). The company retains its legal identity, contracts, employees, and CHE number. The process requires a shareholders' resolution with a two-thirds majority, a conversion plan, an auditor's confirmation that the AG's minimum capital of CHF 100,000 is met, and notarisation of the new articles. The conversion typically takes four to eight weeks and costs CHF 5,000 to CHF 15,000.

What is the residency requirement for a GmbH managing director?

At least one person authorised to represent the GmbH must be domiciled in Switzerland under OR Art. 814. This means holding a Swiss address with a valid residence permit — a B permit, C permit, or G (cross-border commuter) permit all qualify. Swiss citizenship also satisfies the requirement. If all shareholders and intended directors are based abroad, a Swiss-resident nominee managing director must be appointed. Many fiduciary firms offer this service for an annual fee of CHF 2,000 to CHF 6,000.