Why the choice of legal form is crucial
When starting a business in Switzerland, choosing the right legal form is one of the most important decisions. The two most common corporate structures are the GmbH (Gesellschaft mit beschränkter Haftung / Sagl) and the AG (Aktiengesellschaft / SA). Both offer asset separation between the owner and the company, but they differ significantly in terms of minimum capital, governance, flexibility and taxation.
The GmbH is the preferred form for SMEs and startups thanks to an accessible minimum capital (CHF 20,000) and a lean management structure. The AG is the natural choice for larger companies, holding structures or businesses planning to bring in external investors, thanks to the ability to issue bearer shares and a more structured governance.
This guide compares the two models point by point, with data updated to 2026, to help you make the best decision for your business project.
Comparison table: GmbH vs AG
Here is a concise comparison of the main aspects distinguishing the two legal forms:
| Criterion | GmbH (Sagl) | AG (SA) |
|---|---|---|
| Legal basis | Art. 772–827 CO | Art. 620–763 CO |
| Minimum capital | CHF 20,000 (fully paid in) | CHF 100,000 (min. CHF 50,000 paid in) |
| Shares / Quotas | Registered quotas (min. CHF 100 each) | Registered or bearer shares (min. CHF 0.01) |
| Members / Shareholders | Minimum 1 — names registered in the Commercial Register | Minimum 1 — partial anonymity possible |
| Liability | Limited to share capital | Limited to share capital |
| Management | Manager(s) — at least 1 member with Swiss domicile | Board of Directors — at least 1 member with Swiss domicile |
| Audit | Opting-out if < 10 FTE and all members consent | Opting-out if < 10 FTE and all shareholders consent |
| Taxation | Profits taxed at company level + dividends taxed at member level (economic double taxation, reduced at cantonal level) | Same as GmbH — qualified dividends with 50%–70% reduction at cantonal level |
| Incorporation costs | CHF 3,000–5,000 (notary + CR + various fees) | CHF 5,000–10,000 (notary + CR + various fees) |
| Transferability | Transfer of quotas requires notarial deed — statutory approval clause by law | Simplified share transfer — bearer shares freely transferable |
Capital: requirements and payment
The capital difference is often the first criterion when choosing between GmbH and AG:
GmbH — CHF 20,000
The share capital must be fully paid in at incorporation. It can be contributed in cash or in kind (expert valuation required). Each member holds registered quotas recorded in the Commercial Register.
Quotas have a minimum nominal value of CHF 100 and are registered. Transfer of quotas requires a notarial deed and, unless the articles of association provide otherwise, the approval of the members' meeting (statutory approval clause).
AG — CHF 100,000
The minimum share capital is CHF 100,000, of which at least CHF 50,000 (or 20% of the nominal value, whichever is higher) must be paid in at incorporation. Shares can be registered or bearer.
Registered shares can have a nominal value from CHF 0.01 (since 2023). Transfer is simplified compared to the GmbH and can be done by endorsement or simple delivery (bearer shares).
Governance and corporate bodies
The two legal forms provide different bodies for management and oversight:
GmbH governance
- Members' meeting: supreme body with decision-making powers (approval of accounts, appointment of managers, amendment of articles)
- Manager(s): operational management. At least one manager must be a member and have domicile in Switzerland
- Any member with at least 10% of the capital has a veto right on certain fundamental decisions
- Simpler structure suited for a limited number of members (typically 2–10)
AG governance
- General meeting of shareholders: supreme body (approval of accounts, election of Board, dividend distribution)
- Board of Directors: responsible for strategy and senior management. At least 1 member with Swiss domicile
- Executive management: can be delegated to non-shareholders — greater management flexibility
- Ideal structure for growing companies with many shareholders or external investors
Taxation: how GmbH and AG are taxed
From a tax perspective, GmbH and AG are treated in essentially the same way:
Profit tax
The company's net profit is taxed with direct federal tax (8.5% on profit, effectively ~7.8% after deducting the tax itself) plus cantonal and municipal taxes. The total effective rate ranges from 12% to 22% depending on the canton.
Capital tax
Both GmbH and AG pay a cantonal tax on equity. The rate varies by canton (typically 0.01%–0.5% of taxable equity). There is no federal capital tax.
Dividends and double taxation
Dividends distributed to members/shareholders are taxed as personal income. To avoid full double taxation, most cantons provide a 50%–70% reduction on dividend taxation for qualified participations (≥ 10%).
Withholding tax
A 35% federal withholding tax applies to dividends, refundable to Swiss residents if properly declared. This applies identically to GmbH and AG.
From a strictly tax perspective, there is no significant difference between GmbH and AG. The choice should be based on other criteria: governance, flexibility, costs and growth prospects.
Pros and cons compared
GmbH (Sagl)
Advantages
- Accessible minimum capital (CHF 20,000)
- Lower incorporation costs (CHF 3,000–5,000)
- Simplified management with few members
- Ideal structure for family SMEs and startups with limited budget
Disadvantages
- More complex transfer of quotas (notarial deed required)
- Members' names visible in the Commercial Register
- Less attractive to institutional investors
- Statutory approval clause may slow down extraordinary transactions
AG (SA)
Advantages
- Greater prestige and market credibility
- Simplified share transfer (endorsement or delivery)
- Partial shareholder anonymity possible
- Ideal structure for capital raising, future IPO and investor entry
Disadvantages
- Higher minimum capital (CHF 100,000)
- Higher incorporation and maintenance costs
- More complex governance (mandatory Board of Directors)
- Audit obligation harder to avoid in practice
When to choose GmbH and when AG
Here are some practical guidelines to help you decide:
Choose a GmbH if:
- You are starting an SME or business with 1–5 members and a limited initial budget
- You do not plan to bring in external investors in the short term
- You want a lean management structure and quick decision-making
- Your sector does not require a specific legal form (e.g. banking or insurance sectors require an AG)
Choose an AG if:
- You plan to raise capital from investors or venture capital
- You operate in a regulated sector that requires the AG form
- You want maximum flexibility in transferring participations
- You plan significant growth or a future stock exchange listing (IPO)
Incorporation procedure: key steps
The procedure is similar for both forms, with some differences:
Drafting the articles of incorporation and by-laws
The articles of incorporation must be drawn up in public form before a notary. The by-laws define the purpose, capital, bodies and operating rules of the company.
Capital deposit and bank certificate
The capital must be deposited in an escrow account at a Swiss bank. The bank issues a deposit certificate required by the notary.
Notarial deed
The notary authenticates the articles of incorporation, verifies the capital payment and prepares the documentation for the Commercial Register.
Registration in the Commercial Register
Registration makes the company legally existent. Timeframe: 1–3 weeks depending on the canton. Registration costs range from CHF 600 to CHF 800.
AHV affiliation and VAT registration
The new company must affiliate with an AHV compensation fund and, if turnover exceeds CHF 100,000, register with the FTA for VAT.
Practical tips for choosing
- Compare total annual costs (CR fees, audit, accounting) and not just the minimum capital — the AG has higher recurring costs
- If undecided, start with a GmbH: conversion to AG is possible at any time via notarial deed
- Check if your canton offers incentives for new businesses — some cantons have reduced rates for the first years
- Consider the dividend taxation regime in your canton: the reduction for qualified participations can vary significantly
- Plan the corporate structure with a fiduciary: a holding AG with operating GmbH subsidiaries can optimise taxation
- Use accounting software like AccountEX from day one to manage invoices, VAT and accounting in a compliant and automated way
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