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The Share Capital in Switzerland

The Share Capital in Switzerland

Starting a business in Switzerland implies handling various aspects and one of the most important are drafting its share capital. More specifically this is an amount of money that can be imposed by the Swiss Company Law or not (for certain entities) and that must indicate the financial capacity of the participants in the company.

Below, you can find out what the main share capital requirements are for enterprises in Switzerland. Our local agents are at your service with complete business registration solutions and Swiss accounting services.

Types of Swiss entities and their share capital requirements

Here are the main types of legal forms one can register in Switzerland and if they require or not a minimum share capital:

  1. the sole proprietorship which is the simplest legal entity and does not require a minim amount of money to start its activities;
  2. the partnership which can be used for various activities and which can or cannot require a share capital depending on the use;
  3. the private limited liability company which must have a minimum share capital of CHF 20,000;
  4. the public or stock corporation which is required to have a minimum capital of CHF 100,000.

It must be noted that these amounts are imposed by the Company Act which is why they can be higher than this but not lower.

Share capital requirements for limited companies

The public limited company (AG) “Aktiengesellschaft” and the limited liability company (GmbH) “Gesellschaft mit beschränkter haftung” are amongst the most popular choices for investors who wish to open a company in Switzerland. Both forms of legal entities rely on a minimum share capital to begin with and each provides different advantages, either through their costs of formation or other legal benefits.

In order to establish a company in Switzerlanda minimum share capital (or “capital stock”) must be provided in the early stages of incorporation. The Swiss share capital that must be submitted for forming a corporation (or public limited company) is 100,000 CHF, whereas for a limited liability a company, the amount is 20,000 Swiss francs. The share capital must be fully subscribed when the company is incorporated (or in the event of a subsequent increase of its capital). The entire amount of 100,000 CHF is not necessary to be fully paid-in in the beginning, however the payment should be made no later than during the liquidation or in the event of bankruptcy.

At least 20% of the share capital or at least 50.000 CHF (whichever has the highest value) must be deposited at the time of the first meeting of the company’s shareholders (or in the event of any capital increase after the incorporation).

According to the Swiss Code of Obligations, new share capital can be created or increased by means of ordinary, authorised or conditional capital. Regardless the type of capital, whenever the share capital is formed or increased, approval from the shareholders must be obtained.

Regarding the public limited company in Switzerland, the highest risk faced by the shareholders is the risk of losing their share capital, in case the company files for bankruptcy. Although the formation expenses are higher for this type of legal entity, it is popular because it provides a few advantages for small businesses in Switzerland, in terms of liability, capital regulations and other matters.

The public limited company and the limited liability company are only two of the available legal forms of companies available in Switzerland. Other options are available for those who wish to open a company in Switzerland, and our team is ready to provide you with accurate personalised information to best suite your questions regarding Swiss company formation.  

If you want to open a company in Switzerland and need assistance, we can help you. We are also at your service with accounting services in Switzerland.

What is the use of the share capital of a company?

A Swiss company’s share capital represents the total value of all shareholders’ contributions, who can be natural or legal persons. These contributions may come in the form of currency (money), kind (property), donations, and receivables. Non-financial donations must be financially valuable in order to be accepted.

Receivable-based contributions have the same legal standing as kind contributions and cannot be accepted by joint stock companies formed through public subscription or by joint stock companies and limited liability businesses.

If setting up a private company is rather simple from a share capital point of view, the following must be considered about the Swiss stock corporation:

  • – its share capital of CHF 100,000 must be divided into shares where each participation has a minimum value of CHF 0.01 ;
  • – upon registration, the shareholders must deposit at least 20% of the share capital;
  • – it is also accepted for at least CHF 50,000 to be deposited.

Should you need assistance in opening a bank account for the deposit of the minimum share capital for your business, you can rely on our Swiss company formation professionals.

Types of shares a company can issue

Swiss companies can issue various types of shares with different rights attached to them. Among these, we mention the following:

  • – bearer shares which are issued after the subscription of the entire price by the buyer and can be freely transferred;
  • – registered shares which do not require full payment at the time of issue and can also be transferred without restrictions;
  • – registered shares with limited transfer rights can also be issued by Swiss companies;
  • – preferred shares can also be issued during the shareholders’ General Meeting as they come with certain benefits;
  • – voting shares which are usually held by the shareholders.

It is also possible for companies to issue share certificates that can be profit sharing or participation related.

If you are interested in setting up a business in Switzerland, it is worth noting that the most common type is the private limited liability one, as it can take the form of a small or medium-sized enterprises (SMEs). According to data here, the number of SME at the beginning of 2023 was over 207,000.

Contact us for information on the share capital requirements applicable to Swiss companies.