What Is the Difference Between a GmbH and an AG in Switzerland?

When planning to launch a business, choosing the right legal structure is crucial. For entrepreneurs and investors looking at company registration in Switzerland, the two most common corporate forms are the GmbH (Gesellschaft mit beschränkter Haftung) and the AG (Aktiengesellschaft).

While both structures offer limited liability and are well-recognized under Swiss law, they differ significantly in terms of setup, ownership, capital requirements, and public disclosure. This article explores the differences between a GmbH and an AG to help you decide which one suits your business objectives best when you register a company in Switzerland.

Overview of GmbH and AG in Switzerland

Switzerland’s legal framework for businesses is both stable and business-friendly. Whether you are a foreign investor, a startup founder, or a multinational, choosing between a GmbH and an AG depends on your company size, financing needs, privacy preferences, and long-term plans.

What Is a GmbH in Switzerland?

The GmbH (also known as Sàrl in French and SagL in Italian) is the Swiss equivalent of a limited liability company. It is particularly suited for small and medium-sized enterprises (SMEs), family businesses, and startups.

Key Features of a GmbH:

• Minimum Share Capital: CHF 20,000, fully paid at incorporation.
• Owners and Managers: At least one shareholder; at least one managing director must be a Swiss resident.
• Liability: Shareholders' liability is limited to the amount of their capital contribution.
• Public Register: All shareholders' names and capital contributions must be disclosed in the Swiss commercial registry.
• Taxation: Subject to cantonal and federal corporate tax.

Pros of a GmbH:

• Lower capital requirement
• Stable and respected legal form
• Direct control by owners
• Suitable for closely held businesses

Cons of a GmbH:

• Less anonymity (shareholders’ identities are public)
• Share transfers are more complex and require a notary
• Perceived as less “corporate” or scalable compared to an AG

What Is an AG in Switzerland?

The AG (Aktiengesellschaft) is the equivalent of a joint-stock company or corporation. It is the preferred structure for larger companies, especially those looking to raise capital or operate on an international scale.

Key Features of an AG:

• Minimum Share Capital: CHF 100,000, with at least CHF 50,000 paid in.
• Board and Structure: Requires at least one board member (with Swiss residency) and may have shareholders who remain anonymous in public records.
• Liability: Limited to company assets; shareholders are not personally liable.
• Shares: Freely transferable and may be listed on a stock exchange.

Pros of an AG:

• Greater credibility in international and financial markets
• High degree of privacy (no public shareholder disclosure)
• Easier share transfer and potential for stock exchange listing
• Well-suited for complex ownership structures and raising capital

Cons of an AG:

• Higher incorporation and maintenance costs
• Increased regulatory and governance requirements
• Higher minimum capital requirement

Also Read: Procedure for Company Registration in Cayman Islands

Choosing Between GmbH and AG: What to Consider

When deciding whether to form a GmbH or an AG for your Swiss company registration, consider the following factors:

1. Business Size and Nature

• GmbH is more suitable for local businesses, small consultancies, or family-run enterprises.
• AG is better for companies expecting substantial revenues, international exposure, or complex investor relations.

2. Capital Availability

• A GmbH requires only CHF 20,000 upfront, which is attractive for startups.
• An AG requires a larger financial commitment, but offers scalability and access to external funding.

3. Privacy Needs

• If shareholder anonymity is important, AG is the better choice.
• A GmbH requires full disclosure of shareholders to the public.

4. Ownership and Transferability

• A GmbH has more rigid share transfer rules, which can be a disadvantage in dynamic ownership environments.
• An AG allows flexible transfer of shares without the need for notarial intervention.

5. Public Perception

• AGs generally have a more prestigious image, especially in B2B and international markets.
• GmbHs are seen as more informal or personal businesses.

The Process of Registering a Company in Switzerland

Whether you choose a GmbH or an AG, the Swiss company registration process includes the following steps:

1. Preparation and Planning

• Define the company’s structure and purpose
• Choose a unique company name
• Determine initial capital and contributions

2. Drafting Legal Documents

• Articles of Association
• Incorporation deed (notarized)
• Capital contribution proof
• ID documents for shareholders and directors

3. Opening a Capital Deposit Account

• Deposit the required capital into a Swiss bank account.
• The bank issues a confirmation for registration purposes.

4. Notarization

• A Swiss notary authenticates the incorporation documents.

5. Commercial Register Application

• File with the Swiss Commercial Registry.
• Registration usually takes 5–10 business days.

6. Post-Incorporation Tasks

• VAT registration (if required)
• Register for social insurance and pension plans
• Obtain business licenses (if applicable)

Tax Implications for GmbH and AG

Both GmbHs and AGs are subject to Swiss corporate taxation at federal, cantonal, and communal levels. The combined corporate income tax rate ranges between 11% to 21%, depending on the canton.

Additional taxes and obligations include:

• Withholding tax on dividends (generally 35%)
• VAT registration (for companies with annual revenue exceeding CHF 100,000)
• Social insurance contributions for employees and directors

Proper structuring and professional tax advice can optimize your company’s compliance and efficiency.

Conclusion

Both the GmbH and AG offer strong frameworks for doing business in Switzerland, each with distinct advantages. Your decision should reflect your:

• Business scale
• Capital resources
• Need for privacy
• Long-term strategy

If you're an entrepreneur or foreign investor looking to register a company in Switzerland, the GmbH offers simplicity and affordability. For businesses requiring broader credibility, fundraising, or shareholder anonymity, the AG is the superior choice.

Working with experienced legal and accounting professionals ensures a smooth Swiss company registration process and full compliance with local laws.

Frequently Asked Questions (FAQ)

1. Can foreigners own 100% of a Swiss GmbH or AG?

Yes, both GmbHs and AGs can be 100% foreign-owned. However, at least one director (or managing person) must be a Swiss resident or an EU national residing in Switzerland.

2. How long does it take to register a company in Switzerland?

Typically, the process takes 5 to 10 business days, provided all documents are correctly prepared and capital is deposited in time.

3. Can a GmbH be converted into an AG later?

Yes. A GmbH can be converted into an AG if it meets the capital requirements and follows the legal conversion process, including a shareholders' resolution and updated Articles of Association.