Key points at a glance
The limited liability company, known as GmbH (Sàrl in French, Sagl in Italian), is the most common choice in Switzerland for small businesses run by one or a few people. It is a separate legal entity, liable with its own assets, which separates private from business risk. The rules are set out in the Swiss Code of Obligations (OR). As of September 2026 the following essentials apply; check the current requirements with the cantonal commercial register office before you incorporate.
- Share capital of at least CHF 20'000, fully paid in at incorporation or covered by contributions in kind.
- At least one shareholder; a legal entity can also be a shareholder.
- At least one person authorised to represent the company who is resident in Switzerland.
- A notarised deed of incorporation and entry in the commercial register; the GmbH only comes into existence with the entry.
- With good preparation, the process often takes just a few weeks.
GmbH or sole proprietorship?
Many founders hesitate between these two forms. The choice affects liability, taxes, social insurance and administration.
| Criterion | Sole proprietorship | GmbH |
|---|---|---|
| Liability | Unlimited, with private assets | In principle limited to the company's assets |
| Starting capital | No minimum | At least CHF 20'000 |
| Formation | Simple; registration mandatory from CHF 100'000 annual turnover | Notarised deed and commercial register entry |
| Taxes | Profit taxed as the owner's income | Corporate profit tax, plus income tax on salary and dividends |
| Social insurance | Self-employed status with AHV | Managing shareholders are usually employees of their own GmbH |
| Suited to | Testing, small activities, low liability risk | Higher risks, several partners, planned growth |
Which form is more tax-efficient depends on profit level, canton of residence and salary policy. A calculation with a fiduciary or tax adviser is worth doing before you decide.
Preparation before the notary appointment
- Business model and financial plan: what will the company live on in its first 12 to 24 months, and does the capital cover that?
- Company name: it must include GmbH and must not be confusingly similar to existing companies. A first search in the central business name index Zefix helps but does not replace a trademark check.
- Registered office: the municipality determines the tax domicile and the competent commercial register. Without your own premises, a domicile with a third party is possible.
- Purpose: word it broadly enough for foreseeable expansion, yet precisely enough for the register's review.
- Shareholders and roles: who holds which capital contributions, who manages, who signs individually or jointly?
- With several partners: address exit, succession and disputes in a shareholders' agreement from the outset.
Incorporation step by step
- Draft the articles of association, usually based on a template from the notary or the commercial register office.
- Open a capital deposit account with a bank and pay in the share capital; the bank issues a confirmation.
- Have the deed of incorporation notarised; the articles are adopted and the officers appointed.
- File the application with the commercial register, usually via the notary. After registration it is published in the Swiss Official Gazette of Commerce (SHAB).
- Once registered, the bank releases the capital and the GmbH can enter into contracts in its own name.
Contributions in kind take more effort
If the capital is contributed wholly or partly in the form of vehicles, machinery or an existing sole proprietorship, a formation report and an audit confirmation from a licensed auditor are required. Allow extra time and cost for this.
Costs consist of commercial register fees, notary fees and, where used, advisory or incorporation services. Notary tariffs vary by canton; request a quote in advance and compare total costs, not just the service price.
Obligations after registration
- Accounting: the GmbH must keep proper books and prepare annual financial statements.
- Audit: small GmbHs can opt out of the limited audit if they have no more than ten full-time positions on annual average and all shareholders agree.
- Social insurance: registration with an AHV compensation fund, accident insurance under UVG for employees, occupational pension under BVG above the statutory entry threshold.
- VAT: registration is mandatory once turnover from taxable supplies reaches CHF 100'000 a year; voluntary registration is possible.
- Taxes: the GmbH files its own annual tax return; shareholders' salaries and dividends are taxed privately.
If you only sort out ongoing obligations after launch, you often pay twice: in time and in corrections.
Common mistakes
- Treating the share capital as a reserve, even though it may be used for operations immediately and is quickly spent.
- Not setting an appropriate salary, leading to later discussions with AHV and tax authorities about the balance between salary and dividends.
- Mixing private and business expenses, which complicates the accounts and creates tax risks.
- Taking out insurance such as business liability or daily sickness benefits too late.
- Starting with several shareholders without written rules for exit and disputes.
Frequently asked questions
How long does it take to set up a GmbH?
Can I set up a GmbH on my own?
May I spend the share capital after incorporation?
Can I convert a sole proprietorship into a GmbH later?
Do I need professional advice?
Sequence is what matters: concept and financial plan first, then the right legal form, then the formal incorporation. Statutory thresholds and fees can change; the rules in force at the time of incorporation apply.