Types of entity & minimum capital
Société Anonyme (S.A. / A.G.):
minimum authorised capital is CHF 100’000, of which only CHF 50’000 needs be paid in at incorporation (the balance of CHF 50’000 can be paid in later when needed, subject to solvency issues at accounting dates);
this is equivalent to a Limited Company under UK law and gives complete privacy in regard to the name and nature of the shareholders, who can be corporate or individuals;
only individuals can be directors, one of whom has to be resident in Switzerland; the resident director has to have powers to commit the company, although he/she need not be sole signatory on the bank account;
Société à Responsabilité Limitée (S.à.r.l. / G.m.b.H.):
minimum authorised capital is CHF 20'000 (all of which has to be paid in at incorporation);
the UK equivalent is a Limited Liability Company, where the Members are holders of the capital in accordance with their contributions - one member is sufficient;
the members have to name at least one ‘manager’ ( equivalent known as gérant / ‘manager’), resident in Switzerland. The resident director has to have powers to commit the company, although he/she need not be sole signatory on the bank account;
Branch of non-Swiss company (Succursale):
No minimum capital required, but company must provide fully certified and apostilled copies of certificates of incorporation and good standing, must be able to show annual accounts and KYC on directors;
Company Registry fees are about CHF 800 (varies slightly depending on Canton) plus stampduty and charges, adding up to about CHF1’000.
Brief overview of Taxation
There a various incentives and different taxation categories (e.g. for a ‘holding company’ or ‘mixed trading company’), but in general Federal corporation tax of 8.5% applies, to which are also added Cantonal and Municipal taxes. The aggregate effective rate (combining Federal, Cantonal and Municipal taxes) can vary from the lowest, 12.7 % in Obwald, 13.9% in Luzern, 16.3% in Zug and 24.2% in Geneva. But tax rates for specific types of company (e.g. an auxiliary company doing commodity trading in Zug), can be reduced – through the application of a specific tax ruling - to as low as 8% all inclusive).
There is no tax on corporate capital gains. There is withholding tax on dividends of 33.3% but this can be much reduced with the use of tax treaties (e.g. Cyprus, Malta, Hungary, etc.). Swiss tax matters are dealt with by the Cantonal authorities who are helpful, competitive and open to advantageous rulings regarding allocation of activities and profits outside Switzerland.
However, we usually focus on foreign-owned groups. These can elect to establish a Swiss ‘service company’, which is taxed at a very low rate: i.e. assessed only on ‘cost plus’ basis. This status is granted on request in all Cantons (including expensive ones, like Geneva and Zurich) provided the Swiss company acts as administrators and/or agents for a foreign parent. Tax is assessed on a low percentage (usually around 10%) of overheads: e.g. if the Swiss company’s overheads were CHF 100’000 p.a., the company would be taxed 30% (percentage in Geneva) of CHF 10’000, i.e. only CHF 3,000. Most Swiss-based asset management and trust companies owned outside Switzerland can choose this status.
(* NB: these notes are merely for guidance and not to be construed as advice, which should be obtained on a case by case basis).
Establishing a Swiss Company or Branch