What Is a Dormant Company in Switzerland?
Swiss law has no formal dormant company status. A dormant company in Switzerland is a registered GmbH, AG, or other legal entity that has stopped conducting business but remains entered in the commercial register with all obligations intact. Unlike the United Kingdom, where Companies House maintains a formal “dormant” classification, the Swiss commercial register makes no distinction — the company is either active or it does not exist.
This distinction matters. When a Swiss company ceases trading, it does not enter a reduced-obligation holding pattern. Every legal duty that applied when the company was operational continues to apply. The commercial register does not differentiate between a company generating CHF 10 million in revenue and one generating nothing.
The relevant legal framework is the Swiss Code of Obligations (Obligationenrecht, OR), specifically:
- OR Art. 957–963 — bookkeeping and financial reporting obligations
- OR Art. 698–700 (AG) and OR Art. 804–806 (GmbH) — annual general meeting requirements
- OR Art. 934 — ex officio deletion for unreachable companies
- OR Art. 736–751 (AG) and OR Art. 821–826 (GmbH) — dissolution and liquidation
In practice, companies become dormant for several reasons: the founder relocates abroad, a project-specific vehicle completes its purpose, shareholders disagree on direction, or the owner wants to preserve the company name and structure for a future venture. Whatever the reason, the legal and financial consequences of dormancy are identical. For an overview of the initial company registration process and what it entails, see our step-by-step guide.
How Reliable Is This Dormancy Guide?
The obligations, costs, and legal references in this guide are based on OR Art. 725, 804–806, 821–826, 934, and 957–963 — the specific Code of Obligations provisions governing dormant entities, capital maintenance, and ex officio deletion. Annual cost ranges reflect actual domicile service agreements, fiduciary invoices, and cantonal tax assessments reviewed across Zurich, Zug, and Schwyz between 2024 and 2026. The ex officio deletion procedure is described from OR Art. 934 and EHRA practice circulars, verified against published SHAB deletion notices.
What Obligations Does a Dormant Company Still Have?
A dormant Swiss company must fulfil the same core obligations as an active one. Failing to meet any of them creates legal exposure for directors and, in extreme cases, triggers intervention by the commercial register or tax authorities.
Annual accounts and financial reporting
Every GmbH and AG must prepare annual accounts in accordance with OR Art. 957ff, even if the accounts show zero revenue. The accounts must include a balance sheet, profit and loss statement, and notes. The annual general meeting must approve these accounts within six months of the financial year end (OR Art. 699 for AG, OR Art. 805 for GmbH).
A dormant company’s balance sheet will typically show share capital on the equity side, a bank balance (if any), and minimal or no liabilities. It is not a complex set of accounts, but it must be prepared and formally approved.
Tax returns
Cantonal and federal corporate tax returns must be filed annually regardless of revenue. A dormant company with no income still owes the cantonal minimum tax, which varies by canton but typically ranges from CHF 500 to CHF 2,000 per year. The federal government does not levy a minimum tax on companies with no profit, but the cantonal capital tax on equity remains due.
Failure to file tax returns results in estimated assessments (Ermessenseinschaetzung), which typically assume higher income than the company actually earned. Contesting these assessments after the fact is time-consuming and may involve penalties.
Minimum capital maintenance
The share capital rules do not relax during dormancy. A GmbH must maintain its CHF 20,000 minimum share capital; an AG must maintain CHF 100,000 (or the higher amount specified in its articles). If the company’s balance sheet shows a capital deficiency (liabilities exceeding assets), the board must act under OR Art. 725 — the same over-indebtedness rules that apply to active companies.
Directors who fail to act on a capital deficiency risk personal liability, even in a dormant company.
Registered office and domicile
The company must maintain a reachable registered office address (Sitz) in the canton where it is registered. Mail from the commercial register, tax authorities, and courts must be deliverable. If the register office sends correspondence that is returned as undeliverable, this triggers the ex officio deletion process described below.
Board of directors or management
An AG must have at least one board member domiciled in Switzerland (OR Art. 718 para. 4). A GmbH must have at least one managing director resident in Switzerland (OR Art. 814 para. 3). These requirements apply continuously, not only during active trading.
If the sole Swiss-resident director resigns, the company must appoint a replacement. If it cannot, the commercial register may intervene, and the company effectively becomes unmanageable.
Audit obligations
If the company has not filed an opting-out declaration, it remains subject to audit requirements. Even a dormant company with an audit obligation must engage a licensed auditor annually. Most dormant companies should have opted out of the audit at formation or filed the opting-out declaration before going dormant, as the audit cost (CHF 3,000 to 10,000 annually) is disproportionate for an inactive entity.
How Much Does It Cost to Maintain a Dormant Company Each Year?
Keeping a dormant GmbH or AG alive costs CHF 2,500 to 6,500 per year, even with zero commercial activity. The table below summarises the minimum annual expenses.
| Cost Component | Annual Range | Notes |
|---|---|---|
| Domicile address | CHF 1,500–3,000 | Registered office with mail forwarding |
| Accounting and tax return | CHF 500–1,500 | Minimal accounts, nil or low-activity returns |
| Cantonal minimum tax | CHF 500–2,000 | Varies by canton; includes capital tax |
| Commercial register fees | CHF 0–120 | Only if changes are registered |
| Nominee director (if needed) | CHF 3,000–8,000 | Required if no Swiss-resident director |
| Audit (if not opted out) | CHF 3,000–10,000 | Avoidable for small companies |
| Total (without nominee/audit) | CHF 2,500–6,500 | Irreducible minimum |
| Total (with nominee director) | CHF 5,500–14,500 | Common for foreign-owned dormant companies |
Cantonal tax variation
The minimum tax differs substantially between cantons. Zug charges a minimum cantonal tax of approximately CHF 500 per year. Zurich’s minimum is roughly CHF 900. Geneva can exceed CHF 2,000 when cantonal and communal components are combined. For a dormant company generating no profit, the cantonal minimum tax and capital tax on equity are the primary tax costs.
When costs escalate
Two situations push dormant company costs well above the minimum:
- Foreign-owned companies without a Swiss-resident director. The nominee director service alone costs CHF 3,000 to 8,000 per year, making it the single largest expense for many dormant entities.
- Overdue filings. If tax returns have not been filed for multiple years, bringing the company current requires back-filing, which fiduciaries charge CHF 500 to 1,000 per year of arrears. Add penalties and interest assessed by the tax authorities.
How Do You Reactivate a Dormant Swiss Company?
Reactivating a dormant company that has maintained its legal obligations is straightforward — two to four weeks if the company is in good standing. The company never left the register, so there is no re-registration process. The steps focus on updating the company’s details, resolving any compliance gaps, and resuming operations.
Step 1: Review current standing
Check the company’s status on Zefix and confirm it is still listed in the commercial register. Verify that:
- The registered office address is current and reachable
- The board members or managing directors listed are still in place
- No ex officio deletion notices have been published
Step 2: Appoint directors (if needed)
If the previous directors have resigned or are no longer available, the shareholders must appoint new management. For a GmbH, this requires a shareholders’ resolution; for an AG, a board appointment (or shareholders’ election, depending on the articles). At least one director must be domiciled in Switzerland.
Any change in directors must be registered with the commercial register and published in the SHAB. Registration fees apply (CHF 40 to 120 per mutation).
Step 3: File overdue accounts and tax returns
If annual accounts or tax returns have not been filed during the dormancy period, these must be prepared and submitted before the company can operate normally. Tax authorities will expect all outstanding returns, and any estimated assessments must be corrected.
Professional fees for preparing back-filed accounts range from CHF 500 to 1,000 per financial year, depending on complexity.
Step 4: Update the registered office
If the domicile address has changed or the domicile service has lapsed, a new registered office must be established and registered with the commercial register.
Step 5: Re-establish banking and insurance
Open a new business bank account if the previous one was closed. Register for VAT if projected revenue will exceed CHF 100,000. Reinstate social insurance registrations if the company will have employees or paid directors.
Timeline and cost
| Reactivation Step | Duration | Cost |
|---|---|---|
| Director appointment and register update | 1–2 weeks | CHF 500–2,000 |
| Back-filing tax returns (per year) | 2–4 weeks per year | CHF 500–1,000 per year |
| Updated domicile and office | 1–3 days | CHF 150–500 |
| Bank account opening | 3–5 business days | CHF 0–300 |
| Total (no significant arrears) | 2–4 weeks | CHF 1,000–3,000 |
If the company is in good standing and simply needs new directors and an updated address, reactivation can be completed in two weeks for under CHF 2,000. Back-filed tax returns are the main variable that extends both the timeline and cost.
Should You Keep a Dormant Company or Liquidate It?
The decision between maintaining a dormant company and liquidating it depends on three factors: your intended future use, the ongoing costs, and the remaining assets or liabilities.
| Factor | Keep Dormant | Liquidate |
|---|---|---|
| Future plans | Intend to resume within 1–3 years | No foreseeable use for the entity |
| Company name | Want to preserve a specific name | Name has no strategic value |
| Permits or licences | Company holds valuable authorisations | No transferable permits |
| Annual cost tolerance | CHF 2,500–6,500 is acceptable | Prefer to stop recurring costs |
| Assets/liabilities | Minimal balance sheet, easy to maintain | Creditors to settle, assets to distribute |
| Reputation | Clean register history matters | Neutral |
When dormancy makes sense
Keeping a company dormant is rational when you expect to resume trading within a few years and the annual maintenance cost is manageable. Forming a new GmbH from scratch costs CHF 3,000 to 5,000 in registration fees plus the notary process — roughly equivalent to one to two years of dormancy costs. If you plan to restart within that window, dormancy is cheaper than dissolution and re-formation.
Dormancy also preserves the company’s commercial register history, UID number, tax identification, existing contracts, and any permits or licences tied to the legal entity. Some industries (financial services, healthcare) have authorisations that cannot easily be re-obtained.
When liquidation makes sense
If the company has no foreseeable purpose and you are paying CHF 2,500 to 6,500 per year purely to keep a shell alive, liquidation is the economically sound choice. The one-time cost of a standard GmbH liquidation runs CHF 2,000 to 5,000 (including three SHAB creditor calls, final accounts, tax clearance, and register deletion). That is roughly equivalent to one to two years of dormancy maintenance.
Liquidation also eliminates the risk of overlooked obligations. A dormant company whose owner stops paying attention can accumulate tax arrears, lose its registered office, and end up subject to ex officio deletion — a disorderly outcome that can leave directors with personal liability.
For companies that are candidates for sale rather than dissolution, a ready-made company arrangement may be relevant: the entity is transferred to a buyer who wants a pre-registered structure.
Can the Register Delete Your Company Without Consent?
Yes — Swiss law gives the commercial register office the power to strike off companies that are no longer reachable or functional (OR Art. 934). This process, governed by OR Art. 934, is the register’s mechanism for cleaning up abandoned entities.
What triggers ex officio deletion
The register office initiates the process when:
- The company has no reachable registered office (mail returned as undeliverable)
- The company lacks the legally required management (no board members or managing directors listed, or listed persons are unreachable)
- The company has not filed any changes or responded to correspondence for an extended period (typically several years)
How the process works
- The register office publishes a first warning in the SHAB, giving the company 30 days to respond.
- If no response, a second warning is published with another 30-day deadline.
- A third and final warning is published. If the company still does not respond, the register office deletes the entry.
The entire process takes a minimum of 90 days from the first publication to deletion. In practice, register offices sometimes allow additional time, particularly if there are indications that shareholders may be located.
Consequences of ex officio deletion
- The company loses its legal personality. It ceases to exist.
- Any remaining assets (bank balances, property, receivables) pass to the canton under the rules governing ownerless property.
- Directors and shareholders can no longer act on behalf of the company.
- Creditors who filed claims during the notice period may receive payment from the remaining assets; those who did not may lose their claims.
Reinstatement after deletion
A company that was deleted ex officio can be reinstated, but only through court proceedings. The applicant (typically a shareholder or creditor) must demonstrate that the deletion was unjustified or that there is a legitimate interest in reinstating the entity. Courts grant reinstatement where remaining assets or unresolved liabilities warrant it.
Reinstatement is not guaranteed, and the process costs CHF 5,000 to 15,000 in legal fees and court costs. It is far cheaper to avoid ex officio deletion by maintaining a reachable address and filing obligations while the company is dormant.
Frequently Asked Questions
Does Switzerland have an official dormant company status?
No. Swiss corporate law does not recognise a formal dormant or inactive status. A GmbH or AG that stops trading remains a fully active legal entity in the commercial register. It must continue to file annual accounts, submit tax returns, hold annual general meetings, maintain its registered office, and keep at least one Swiss-resident director or board member in place. The only way to end these obligations is to dissolve and liquidate the company or transfer it to a new owner.
How much does it cost per year to keep a dormant company in Switzerland?
The minimum annual cost for maintaining a dormant GmbH or AG ranges from CHF 2,500 to CHF 6,500. This includes a domicile address (CHF 1,500 to 3,000), basic accounting and tax return preparation (CHF 500 to 1,500), and cantonal minimum tax (CHF 500 to 2,000 depending on the canton). These costs apply regardless of whether the company generates any revenue. If the company has employees on the books or outstanding contracts, costs will be higher.
Can the commercial register delete my company without my consent?
Yes. Under OR Art. 934, the commercial register office can initiate ex officio deletion (Loeschung von Amtes wegen) if a company has no reachable address, no functioning management, and fails to respond to formal notices. The register publishes three warnings in the Swiss Official Gazette of Commerce (SHAB), each 30 days apart. If no one responds within the total notice period, the company is struck off. Any remaining assets pass to the canton. Reinstatement after ex officio deletion is possible within a limited window but requires court proceedings.
How long does it take to reactivate a dormant Swiss company?
Reactivating a dormant company that has maintained its legal obligations takes two to four weeks. The main steps are appointing new directors (if needed), updating the registered office address, filing any overdue tax returns, and notifying the commercial register of changes. If the company has fallen behind on tax filings or owes back taxes, resolving these arrears can extend the timeline to two to three months. Companies that have been struck off ex officio require a court application for reinstatement, which takes several months.
Can a dormant company still issue invoices or enter contracts?
Yes. A dormant company retains full legal capacity until it is deleted from the commercial register. It can issue invoices, enter contracts, employ staff, and conduct any business activity permitted by its articles of association. The term 'dormant' simply describes the practical state of inactivity — it has no legal definition in Switzerland. The company remains liable for all obligations arising from its actions, including tax liabilities, VAT compliance, and social insurance contributions, from the moment activity resumes.
Is there a minimum share capital preservation requirement for dormant companies?
Yes. Swiss law requires a GmbH to maintain at least CHF 20,000 in net assets and an AG to maintain at least CHF 100,000. If the company's net assets fall below half the share capital, directors are required to convene a shareholder meeting and propose remedial measures under OR Art. 725 (AG) and OR Art. 820 (GmbH). Even a dormant company with ongoing holding costs and no revenue can gradually erode its capital if it pays for domicile, accounting, and minimum taxes without any inflows. Directors must monitor this.
What are the minimum tax obligations for a dormant Swiss company?
Most Swiss cantons impose a minimum corporate tax on registered companies regardless of whether they are active. The cantonal minimum tax ranges from approximately CHF 500 in low-tax cantons such as Zug and Schwyz to CHF 2,000 or more in Geneva and Vaud. This tax applies even if the company reports zero revenue. Additionally, the company must file a corporate income tax return (Steuererklärung) for each financial year, even with nil activity. Failure to file results in default tax assessments by the cantonal authority.
Does a dormant company need to hold an annual general meeting?
Yes. Swiss law requires a GmbH shareholders' meeting within six months of the financial year end (OR Art. 805) and an AG annual general meeting within the same period (OR Art. 699). This obligation applies to dormant companies. The meeting must approve the annual accounts, even if they show nil activity. For a small GmbH with a single shareholder who is also the managing director, the meeting can be a simple written resolution rather than a physical gathering, which reduces the practical burden.
Should I keep a dormant company or liquidate it?
The decision depends on your intended future use and how long the dormancy will last. If you plan to resume activity within 12 to 18 months, keeping the company alive is typically cheaper than liquidating and reregistering later. Liquidation itself costs CHF 2,000 to 5,000 in direct fees plus one to two years of ongoing minimal compliance costs during the mandatory creditor waiting period. However, if you have no clear plan to use the company within two to three years, liquidation usually saves more money in the long run than continuing to pay CHF 2,500 to 6,500 annually in dormancy costs.