Why joint ventures matter for Swiss SMEs
Two or more Swiss SMEs may decide to combine expertise, clients or investment for a specific project — launching a product, entering a new market, developing a shared facility — without merging into a single company. This structured collaboration is a joint venture: an agreement with a defined objective, agreed duration and explicit allocation of risks, costs and profits.
Unlike a simple supply arrangement or service contract, a joint venture involves active participation by each partner, with contributions that may be in cash, know-how, personnel or assets. The choice of legal form and governance rules determines liability, taxation and accounting obligations: errors at this stage lead to disputes, double taxation or financial statements that do not comply with Swiss standards.
This guide outlines the main structures available in Switzerland, criteria for allocating profits, governance models best suited to SMEs and accounting rules under the Code of Obligations and Swiss accounting standards (GAAP/FER), with references updated to 2026.
Legal forms: which structure to choose
Switzerland has no corporate form specifically named «joint venture». The project is structured under one of the following forms, each with different implications for liability, accounting and taxation:
| Structure | Legal personality | Liability | Accounting | Ideal for |
|---|---|---|---|---|
| Simple partnership (Art. 530–551 CO) | No — internal relationship between partners | Joint and unlimited towards third parties (unless an agreement enforceable against creditors) | Internal accounting (Art. 957 et seq. CO); no publication | Short-term projects, few partners, low external profile |
| Consortium (Art. 530 et seq. CO) | No — coordinated organisation | Joint and unlimited towards third parties; internal allocation per statutes | Consortium accounting + allocation to members | Joint contracts, public tenders, infrastructure projects |
| New capital company (Sagl / Ltd) | Yes — separate entity | Limited to share capital | Full financial statements, audit if applicable, commercial register entry | Long-term projects, significant investment, entry of third parties |
| Pure contractual agreement | No — no entity | Each partner is liable for their own part | Accounting in the respective companies | Co-marketing, shared R&D, low balance-sheet risk projects |
For most SMEs looking to share business risk with significant investment, setting up a dedicated Sagl for the project is the most balanced solution: separation of assets, governance defined by the articles of association and ordinary accounting compliant with the CO.
Profit allocation: criteria and essential clauses
Profit allocation does not automatically follow ownership interests. The agreement — articles of association, simple partnership contract or shareholders' agreement — must precisely define the following elements:
Contributions and interests
Initial contributions (capital, assets, services) determine ownership interests. In a simple partnership, profit and loss allocation is as a rule equal (Art. 533 CO), unless otherwise agreed in writing.
Document every contribution with a valuation (contributions in kind), internal invoice or contribution minutes. Without proof, disputes over allocation become difficult to resolve.
Alternative allocation criteria
Partners may agree on an allocation decoupled from ownership interests: for example 60/40 based on one partner's commercial contribution and the other's technical contribution, or a «waterfall» that remunerates the investing partner first up to a preset return.
Such clauses must be clearly stated in the contract and consistent with the chosen tax structure, to avoid the Federal Tax Administration (FTA) recharacterising payments as hidden dividends or disguised remuneration (Art. 58 FDTA).
Losses and reserves: establish whether losses are allocated proportionally to interests or under other criteria, and whether forming a project reserve is mandatory before distributing profits. In a Sagl/Ltd, ordinary rules on equity and legal reserves apply (Art. 672 et seq. CO; for the Sagl, Art. 801 CO with analogous application).
Advance distributions: in a simple partnership, periodic withdrawals («profit advances») must be tracked and regularised at year-end. A partner who withdraws more than their share creates a debt towards the others, recordable as a current account with shareholders.
Exit and withdrawal clauses: provide for the mechanism for valuing the interest (predefined formula, independent valuation, EBITDA multiple) and conditions for early exit (deadlock, breach, strategic change). Without these clauses, winding up the joint venture can stall for years.
Governance: decisions, control and conflicts
A joint venture between SMEs often fails due to insufficient governance, not lack of commercial opportunity. Defining who decides what, with what majority and how to resolve deadlocks is as important as profit allocation.
Decision-making bodies
In a Sagl: shareholders' meeting for strategic decisions (amending articles, approving financial statements, dividend distribution) and manager(s) for day-to-day management. In a simple partnership: partners' meeting with quorum and majorities defined contractually.
Reserved matters
Subject to qualified majority (75% or unanimous) decisions on budget, hiring above a threshold, extraordinary investments, contracts above CHF 50,000, change of corporate purpose and transfer of interests.
Deadlock resolution
Provide an escalating procedure: internal mediation, arbitration (e.g. Swiss chamber of commerce institute or designated arbitrator), reciprocal buy-out option (Russian roulette or Texas shoot-out). The shareholders' agreement is the ideal instrument for these clauses.
Periodic reporting strengthens trust between partners: monthly or quarterly reports with the project's income statement, progress status, budget variances and proposed distribution. With Accountex, each partner can access shared dashboards or receive accounting extracts from the JV vehicle, maintaining transparency without exposing the full financial statements of the participating companies.
Compliant accounting: CO, FER and recording
Accounting treatment depends on the form chosen. The following rules apply in the context of SMEs subject to ordinary accounting or full commercial accounting:
Simple partnership and consortium
The simple partnership and consortium must keep adequate accounts under Art. 957 et seq. CO: full double-entry accounting if partners exceed the CHF 500,000 turnover threshold or are legal entities; otherwise accounting of income and expenditure and net assets. Partners must be able to verify the financial position at any time and receive the report at year-end (Art. 550 CO). At year-end, profit or loss is determined and allocated according to the agreement.
Each partner records their share of profit in their company's income statement (account 38xx or 39xx in the Swiss chart of accounts) and records contributions and withdrawals on the current account with shareholders/reciprocal account. Costs borne by a partner on behalf of the project are invoiced internally or recorded as a receivable from the JV.
Capital company (Sagl / Ltd)
The JV constitutes a separate entity with full financial statements: assets, liabilities, income statement and notes according to Swiss accounting standards (Swiss GAAP FER or, for larger companies, Swiss GAAP RPC). Partners record the participation on the balance sheet as an investment (account 1200) and account for dividends or share of results according to the method chosen.
Transactions between partners and the JV (staff leasing, licences, supplies) must take place at arm's length (transfer pricing) and be documented with contracts and invoices. Non-arm's-length transactions may be tax-adjusted under Art. 58 FDTA.
| Transaction | Recording in the JV | Recording in the partner |
|---|---|---|
| Initial capital contribution | Equity / capital contributions | Investment credit (1200) |
| Costs borne by partner for the JV | Expense + liability to partner | Receivable from JV or invoice issued |
| Project revenue | Operating revenue | Share of profit if simple partnership; dividend if Sagl/Ltd |
| Year-end profit distribution | Reduction in retained earnings / dividends payable | Dividend receivable or bank receipt |
| Dissolution and liquidation | Write-off of assets, allocation of residual | Disposal of investment, possible capital gain |
Taxation: profit tax, VAT and withholding tax
In a capital company, the project's profit is taxable at JV level (federal direct tax on profit and cantonal/municipal tax). Dividends distributed to partner capital companies may benefit from the participation relief (Art. 69 FDTA and analogous cantonal provisions), which mitigates economic double taxation; for individual partners, dividends are fully taxable under the applicable cantonal rules.
In a simple partnership or consortium, there is no separate taxable entity: profit is attributed directly to partners and included in the result of the respective business (sole proprietorship, partnership or capital company). Contractual allocation must match each partner's tax return.
For VAT: if the JV generates at least CHF 100,000 in worldwide turnover from taxable or zero-rated supplies, it must register and fulfil VAT obligations. In a consortium with centralised invoicing, verify who acts as tax agent. Supplies between partners and the JV are as a rule taxable if made for consideration; the VAT group exemption (Art. 13 VAT Act) requires an explicit election and inclusion of all relevant entities.
Withholding tax applies if a foreign partner receives dividends from a Swiss JV (standard rate of 35%, reducible under double taxation treaties) or if the JV pays interest or royalties to beneficiaries abroad. Assess conventional rates and refund procedures in advance with your tax adviser.
Operational checklist for launching the joint venture
Before signing the agreement and starting accounting records, verify that you have completed these steps:
- 1Define the purpose and duration — describe the project precisely (products, markets, territory) and the expiry date or renewal conditions.
- 2Choose the legal form — assess liability, incorporation costs, audit requirements and profile towards clients and suppliers.
- 3Draft the contract — articles of association, simple partnership contract and shareholders' agreement with clauses on profits, losses, governance, exit and conflict resolution.
- 4Set up accounting — dedicated chart of accounts, current accounts between partners, cost centres for the project and internal invoicing policy.
- 5Align tax and VAT — confirm with your fiduciary the allocation of profit, VAT registration and filing obligations.
- 6Plan reporting — report calendar, shared KPIs and access to accounting data through digital tools such as Accountex to monitor costs, revenue and margins in real time.
Conclusion: structure well to collaborate long term
A joint venture between Swiss SMEs is an opportunity to accelerate growth without acquisitions or mergers. Success depends less on the business idea and more on the quality of the agreement: appropriate legal form, transparent profit allocation, governance that prevents deadlocks and orderly accounting from day one.
Using structured accounting software such as Accountex allows you to clearly separate the joint project's accounting from that of the individual businesses, track contributions and distributions and produce the documents needed for meetings, tax returns and audit. An initial investment in legal and accounting structure avoids much greater costs in the event of a dispute or reorganisation.