Quick answer
In 2026 most location-independent professionals in Switzerland choose between a sole proprietorship (no minimum capital, unlimited liability, taxed as personal income) and a GmbH (CHF 20,000 capital, limited liability, corporate tax of about 12%–21% by canton). An AG needs CHF 100,000. Every Swiss company needs a Swiss-resident person with signing authority, so nobody runs one entirely remotely.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Check my business setup →You want to invoice clients from Switzerland, hire a first employee or hold your IP in a Swiss company, and you need the right legal form for what you do. This guide compares the Swiss entity types on liability, capital, cost, tax and remote manageability in 2026. By the end you will know which structure fits a freelancer, a small agency and a venture-backed startup.
Switzerland legal forms of business in 2026: the key figures
| Item | Rule for 2026 |
|---|---|
| Sole proprietorship | No minimum capital; commercial register entry mandatory from CHF 100,000 annual revenue |
| GmbH (Sàrl / LLC) | Minimum capital CHF 20,000, fully paid in |
| AG (SA / Ltd) | Minimum capital CHF 100,000, at least 20% and CHF 50,000 paid in |
| Swiss-resident requirement | At least one person with signing authority domiciled in Switzerland (Articles 718 and 814 CO) |
| Corporate income tax (combined effective) | About 11.9% (Zug) to about 21% (Bern); federal share 8.5% on after-tax profit |
| Dividend withholding tax | 35%, refundable to Swiss residents and under treaties |
| Issuance stamp duty | 1% on equity above CHF 1 million |
| VAT registration threshold | CHF 100,000 worldwide turnover; standard rate 8.1% |
Is this guide for you?
Read on if you…
- are a freelancer or consultant in Switzerland deciding between staying a sole proprietor and forming a GmbH;
- are founding a startup or agency and want to compare GmbH and AG on cost, capital and investor appeal;
- live abroad or travel a lot and want to know whether you can run a Swiss company remotely.
Probably not your case if you…
- need the tax rates in detail rather than the structure – see corporate income taxes in Switzerland;
- are setting up a regulated financial or crypto business that needs a FINMA licence.
Which Swiss business structures exist, and how do they compare?
Swiss company law is in the Code of Obligations (CO). Six forms matter in practice:
| Form | Liability | Minimum capital | Setup cost and time | Taxation | Can a non-resident run it remotely? |
|---|---|---|---|---|---|
| Sole proprietorship (Einzelunternehmen) | Unlimited, personal | None | Free to start; register entry from CHF 100,000 revenue, roughly CHF 120 fee; days | Owner's personal income tax plus about 10% AHV | No – the owner must live and work in Switzerland with a permit |
| General partnership (Kollektivgesellschaft) | Unlimited, joint, all partners | None | Register entry required; low cost; days to weeks | Transparent – each partner taxed personally | No – partners must be natural persons active in Switzerland |
| Limited partnership (Kommanditgesellschaft) | General partner unlimited; limited partners up to their contribution | None | As above | Transparent | Partly – limited partners can be abroad |
| GmbH (Sàrl) | Limited to company assets | CHF 20,000, fully paid | Notary plus register, roughly CHF 1,500–3,000 all-in; 2–4 weeks | Corporate tax about 12%–21%; owner taxed on salary and dividends | Only with a Swiss-resident managing director with signing authority |
| AG (SA) | Limited to company assets | CHF 100,000 (CHF 50,000 paid in) | Notary plus register, roughly CHF 2,500–5,000; 2–4 weeks | As GmbH; shareholders anonymous | Only with a Swiss-resident board member or director with signing authority |
| Branch of a foreign company | Parent liable | None | Register entry; weeks | Swiss tax on branch profit | Needs a Swiss-resident authorised representative |
Two features surprise newcomers. Every GmbH and AG needs at least one Swiss-domiciled person able to represent it – an appointed director carries real legal responsibility. And GmbH shareholders are published in the commercial register; AG shareholders are not.
Should you stay a sole proprietor or form a GmbH?
Honestly? For most freelancers earning under about CHF 150,000, the sole proprietorship wins on simplicity. You register as self-employed with the cantonal AHV office, keep simple accounts and pay income tax on profit. No notary, no capital, no corporate return. Business costs are deducted directly – see business expenses in Switzerland.
The GmbH starts to pay off when:
- your profit exceeds what you need to live on, so you can leave money in the company at about 12%–21% corporate tax instead of up to 45% personal tax;
- you take on contractual risk (software warranties, client data, employees) and want limited liability;
- clients or investors require a company counterparty;
- you plan to sell the business – a share sale by a private individual is normally a tax-free capital gain, as explained in capital gains tax in Switzerland.
Here's the catch. Money you take out of a GmbH is taxed twice: corporate tax on profit, then income tax on dividends. Switzerland softens this with partial taxation: if you hold at least 10%, only 70% of the dividend is taxable federally, and 50%–70% in the cantons. Salary, by contrast, is deductible for the company but attracts social security of roughly 12%–13% split between employer and employee, plus pension-fund contributions. The sweet spot is usually a market salary plus moderate dividends; the tax office challenges unusually low salaries.
Converting a sole proprietorship into a GmbH is tax-neutral if you transfer the business at book value and keep the shares for five years.
When does an AG make sense?
The AG is the form investors expect. Shares transfer easily, shareholders stay out of the public register, and share classes and employee participation plans are standard. The price is CHF 100,000 of capital (half paid in at founding) and a mandatory board. Tax treatment is identical to the GmbH.
Pick the AG if you plan to raise outside equity early or want anonymity. Otherwise start as a GmbH; converting later is tax-neutral. Small companies with fewer than ten full-time employees can opt out of the audit with shareholder consent.
How do you set up a Swiss company step by step?
- Choose the canton and municipality. Corporate tax ranges from about 11.9% in Zug to about 21% in Bern; capital tax and dividend taxation differ too. Check the FTA's canton overview.
- Reserve the name and draft the articles. A GmbH needs articles of association; an AG needs articles and board rules. Your purpose clause should cover everything you plan to do.
- Open a capital deposit account at a Swiss bank and pay in CHF 20,000 (GmbH) or at least CHF 50,000 (AG). Expect know-your-customer questions about beneficial owners.
- Sign the founding deed before a notary. Founders can sign by proxy.
- File with the cantonal commercial register – through EasyGov or the notary. Registration takes days to two weeks.
- Register for social security, VAT and insurance. AHV once you pay salaries; VAT from CHF 100,000 turnover; accident insurance for every employee.
- Release the capital to the operating account once registered.
A domestic founder can finish in two to four weeks; foreign founders should add time for bank onboarding. Heavnn's business setup service covers the canton choice, resident director and registration in one process.
Can you run a Swiss company from abroad?
Legally, yes, with a Swiss-resident signatory. Fiscally, this is where plans fall apart.
Switzerland taxes a company where its place of effective management is – basically where the real decisions are taken. Other countries apply the same test. If you incorporate a GmbH in Zug but run it from Lisbon, Portugal can treat the company as Portuguese resident, or at least as having a permanent establishment (PE) there, and tax its profit. The Swiss resident director does not protect you if he only signs papers.
The reverse is equally true. A foreign company you manage from your Swiss home office becomes Swiss tax resident, with Swiss corporate tax and filing duties. Our guide on international tax treaties of Switzerland explains how treaties resolve dual residence.
Practical rule for nomadic founders: hold board meetings and take key decisions in Switzerland, keep the books there, and avoid signing client contracts from one foreign location for months. If you intend to leave Switzerland, read ceasing your tax residency in Switzerland before you go, because your company's residence may move with you.
Example – Sofia, Italian UX consultant in Zug
Sofia bills CHF 220,000 a year and needs about CHF 110,000 to live on. As a sole proprietor she would pay about 10% AHV on the full profit plus Zug income tax, roughly CHF 50,000 in total. She forms a GmbH with CHF 20,000 capital for about CHF 2,500 in fees. The GmbH pays her a CHF 120,000 salary, deducts it, and keeps CHF 80,000 of profit taxed at about 11.9%, roughly CHF 9,500. Her salary carries about CHF 15,000 of social security and pension contributions, half paid by the company. She retains about CHF 70,000 in the company and defers the second layer of tax until she pays dividends.
Sofia's setup has three moving parts: form, canton and salary mix. Yours probably does too.
Get your Swiss business setup checked before you sign the notary deed.
Check my business setup →Common mistakes (and what they cost)
- Appointing a nominee Swiss director and running everything from abroad. The foreign country claims the company's profit; you end up with two tax returns and a treaty dispute.
- Paying yourself only dividends from a GmbH. The tax office requalifies part of the dividend as salary and charges back social security of roughly 12%–13% with interest.
- Skipping commercial register entry as a sole proprietor above CHF 100,000. Fines, back-dated registration and problems with banks and clients.
- Forgetting VAT at CHF 100,000. Registration is mandatory from the month the threshold is exceeded; late registration means paying 8.1% VAT you never invoiced.
- Under-capitalising the GmbH on purpose. Owner loans above safe-harbour ratios count as hidden equity; the interest becomes a non-deductible dividend.
Frequently asked questions
How much does it cost to set up a GmbH in Switzerland?
Beyond the CHF 20,000 share capital, which remains company money, budget roughly CHF 1,500–3,000 for notary fees, the commercial register fee and bank deposit charges. Online providers and EasyGov keep costs at the lower end. Annual running costs for bookkeeping, tax returns and a resident director, if needed, add a few thousand francs a year.
Can a foreigner own a Swiss GmbH or AG?
Yes. There are no nationality or residence requirements for shareholders. The only requirement is that at least one person authorised to sign for the company is domiciled in Switzerland. That person can be a managing director, board member or director with individual signing authority. Owning shares does not give you a right to live or work in Switzerland.
What is the difference between a GmbH and an AG in Switzerland?
Capital and visibility. A GmbH needs CHF 20,000 fully paid in and lists its shareholders in the public commercial register. An AG needs CHF 100,000, with at least CHF 50,000 paid in, and keeps shareholders private. The AG is better suited to outside investors and employee shares. Tax treatment and the Swiss-resident signatory rule are the same for both.
Do I need to register a sole proprietorship in Switzerland?
You must register with the cantonal social security office (AHV) as self-employed from the start, and with the commercial register once annual revenue reaches CHF 100,000. Below that, registration is voluntary but useful for credibility and bank accounts. You register for VAT when worldwide turnover reaches CHF 100,000. Your business profit is taxed with your personal income.
How are Swiss companies taxed in 2026?
Federal corporate tax is 8.5% on profit after tax, about 7.8% on pre-tax profit, plus cantonal and municipal taxes. Combined effective rates run from about 11.9% in Zug to about 21% in Bern. Cantons also levy a small annual capital tax on equity. Dividends to shareholders carry a 35% withholding tax, refundable to Swiss residents and partly under treaties.
Can I run my Swiss company while travelling as a digital nomad?
Occasional travel is fine. The risk starts when the company's real management happens abroad for long periods: that country can claim the company as tax resident or tax a permanent establishment there. Keep decisions, board meetings and bookkeeping in Switzerland, document them, and avoid signing major contracts from one foreign location for months.
Related guides
- Corporate income taxes in Switzerland
- Business expenses in Switzerland
- Capital gains tax in Switzerland
- Switzerland tax landscape overview
- Legal forms of business in Germany
- Legal forms of business in Austria
- All country tax guides
Sources
- Swiss Code of Obligations (CO), SR 220 – Fedlex
- Federal Act on Direct Federal Tax (DBG), SR 642.11 – Fedlex
- SME Portal of the Swiss Confederation – legal forms
- EasyGov – online company formation and registrations
- Zefix – Central Business Name Index (commercial register)
- Swiss Federal Tax Administration (FTA/ESTV)
- PwC Worldwide Tax Summaries – Switzerland, corporate taxes (cross-check)
This guide is general information, not personalised tax advice. See how we research and review.
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