Incorporating Your Business in the Greater Zurich Area & Legal Forms of Companies in Switzerland

Greater Zurich Area AG, May 2013: Incorporation 1

In the Greater Zurich Area, we understand that time is

money and speed is key when it comes to incorporating

a new business.

Switzerland‘s pro-business legal system makes it easy to

launch operations in the Greater Zurich Area:

• Incorporating in Switzerland usually takes two to

seven weeks.

• Set-up is easy, fast and inexpensive.

• Applications for work/residence permits run

parallel, and don’t require additional time.

• Efficient and competent public officials stand ready

to help you with procedural questions.

Please note: As entering the commercial registry and

obtaining work permits is a parallel process at cantonal

level, it is highly advisable to make a prudent choice of

business location before registering your business.

Incorporating Your Business in the Greater Zurich Area & Legal Forms of Companies in Switzerland

Incorporating in the Greater Zurich Area

• Costs of incorporating: Company set-up CHF 4,000

to 7,000 (Swiss francs). Stamp duty: 1% of the

capital stock; the first CHF 1 million is exempt; the

exemption applies at time of incorporation and to

further capital increases up to a total CHF 1 million.

Fees (registration, notary public, commercial

register): approx. CHF 2,000. Consulting and legal

fees: starting at approx. CHF 2,000 to 5,000 for

small companies. Without stamp duty, start-up costs

amount to approx. CHF 7,000. Total start-up costs

however depend on the volume of capital stock and

amount of consultancy.

• No special permits are needed to purchase real

estate for business purposes.

• Company name must be exclusive; no danger of

confusion with existing company in Switzerland is

admissible (commercial registry webpage: www.

handelsregister.ch; member cantons of the Greater

Zurich Area currently are GL, GR, SH, SO, SZ, ZG, ZH).

• Product registration may be required in special

cases.

Your partners at the Greater Zurich Area will suggest the best location available to your type of business and guide you through the incorporation process.

Greater Zurich Area AG, May 2013: Incorporation 2

Product registration, permits and services

Only a few products and services in Switzerland are sub-

ject to special rules and regulations. They are carefully

put in place to ensure safety and public health, as well

as to provide environmental and consumer protection

and to comply with international trade standards and

norms.

Selected professional services, such as banking and in

insurance, may require a special licence and/or registra-

tion before taking up operations.

Permits and registrations may be required for importing

or selling pharmaceuticals, cosmetic products, cleansing

products, electrical devices, measuring and weighing

devices, heating systems, pressure vessels and motorized

bicycles.

With the ratification of the “Cassis-de-Dijon” princi-

ple in June 2009, the few remaining restrictions on the

import of goods and products from the EU have been

further eased.

Choices of incorporation: AG, GmbH, Branch

The two most common types of legal entities for per-

forming business activities in Switzerland are: The joint-

stock company (or the “AG”) and the limited liability

company (or “GmbH”). A popular third choice of for-

eign companies for doing business in Switzerland is to

operate through a branch office or work with distr ib-

utors/agents.

Joint-stock company: “Aktiengesellschaft (AG)”

The “Aktiengesellschaft (AG)”, or joint stock company or

corporation (equivalent to corp., Inc., Ltd. and Pvt. Ltd.)

is most widely used in Switzerland by larger companies

in trading and manufacturing, as well as by holding and

commercial finance companies.

The AG is an independent legal entity and its liability is

limited to its capital.

Capital requirements of the AG

• An AG (Aktiengesellschaft) requires a minimum

capital of CHF 100,000, which serves as the

company’s liability.

• At least 20% or a minimum of CHF 50,000 has to be

deposited into an escrow bank account for set-up.

• After entry into the commercial registry, the money

is released and can be used in the company.

Set-up of the AG

• Set-up consists of filing public deed, containing

articles of association, governing bodies and

documenting shareholders’ individual deposits at

time of incorporation.

• The AG becomes legally official upon entry in the

commercial registry.

• Incorporation can be done by proxy.

• At least one founder necessary.

• The company name must have the addition “AG”,

and may not bear any resemblance to an existing

Swiss company.

• Clearance of name by Commercial Register.

Governing bodies & founding parties of the AG

A) General meeting of shareholders: The general meet-

ing of shareholders consists of all shareholders and it

is the most powerful body of an AG. It can change the

articles of the association, and it elects the board of di-

rectors as well as the auditors.

B) Board of directors: The board of directors consists of

one or more individuals and is the managing body of

the corporation. At least one board member or director

with single signature authority or two board members/

directors with joint signature authority must have do-

micile in Switzerland.

C) Auditors: A company must have its annual financial

statement and the consolidated financial statements

duly audited (“ordinary audit”) if two of the following

figures are exceeded in two consecutive fiscal years:

• Balance sheet total of CHF 10 million.

• Turnover of CHF 20 million.

• Annual average of 50 full-time employment

positions.

If this is not the case a company is only required to

have its financial statements audited to a limited extent

(“limited audit”). In the case of small companies with

no more than 10 full-time employees the audit may be

waived with the consent of all members (“opting out”).

AGs are suitable for capital-intensive businesses in which the capital investment of the owners plays a major role.

Greater Zurich Area AG, May 2013: Incorporation 3

Benefits and advantages of the AG

• Liability is limited to company’s assets.

• Anonymity of equity holders.

• Shares are easily transferable.

• Access to capital market if desired.

Limited Liability Company – GmbH

The GmbH (“Gesellschaft mit beschränkter Haftung”),

(similar to LLC) is a legal entity in which the economic

beneficiaries are partners. Partners take equity in the

company by subscribing capital whereas the company’s

liability is limited to the amount of the capital regis-

tered. A GmbH is suitable for any type of small to midsize

enterprises, as well as for a holding company, adminis-

trating other group companies.

Capital requirements of the GmbH

• Minimum capital is CHF 20,000.

• Capital must be fully paid at time of incorporation.

• Easy transfer of equity shares, multiple equity

shares per partner possible.

• Minimum partner share is CHF 100.

Set-up of the GmbH

• Similar procedure as in setting up an AG.

Governing bodies & founding parties of the GmbH

• Managing director: At least one partner with single

signatory power must be resident of Switzerland

(or two with joint signature power).

• Economic beneficiaries are the partners.

• No board of directors required.

• Auditors: same as AG.

Benefits and advantages of the GmbH

• Smaller capital requirement, which makes it better

suited for small and midsize companies.

• Liability is limited to company’s assets.

Branch office

The branch office is a Swiss business entity of an interna-

tional parent company. A Swiss branch is treated like a

Swiss company with respect to taxation, authorization,

and registration making it operationally independent

within Switzerland. Relations to the parent company

are subject to CFC rules.

The Swiss branch is often the incorporation model of

choice for foreign companies entering the Swiss market.

Incorporation of the branch

• No branch capital necessary.

• Only registration of the parent company at the

cantonal commercial registry is required.

• Swiss residency required to act as an authorized

signatory and managing director.

• Economic beneficiary is the parent company, which

is also liable for the Swiss branch.

Benefits and advantages of the branch

• No separate equity required; endowment capital

can be provided by the parent company, no

particular amount is specified.

• Set-up is easier and costs are the same compared to

an AG or GmbH.

• No stamp duty, anticipatory tax on profit transfer.

• No Swiss partner required.

• Attractive taxation (in conjunction with foreign tax

laws).

A GmbH is suitable for small and midsize businesses with medium scale capital in-vestment and limited liability of founding partners.

Swiss branch is an attractive tax-efficient incorporation model well-suited for close business relations between a parent compa-ny and a branch office in Switzerland.

The Swiss Code of Obligations holds the instruments for incorpo-

rating your company readily available. To assure a successful and

fast incorporation of your business, we recommend seeking the

advice of relocation specialists such as the Greater Zurich Area

AG at an early stage in the process of establishing a presence.

At the Greater Zurich Area AG, we assist you with obtaining work

permits and facilitate contact to cantonal authorities. We are

happy to refer you to our proven partners such as local law firms

and fiduciaries.

All incorporation is local – the Greater Zurich Area AG is here to

help you!

SWITZERLANDGreater Zurich Area AGLimmatquai 1228001 Zürich / SwitzerlandPhone +41 44 254 59 59Fax +41 44 254 59 [email protected]

USAGreater Zurich Area Inc. swissnex building 730 Montgomery Street San Francisco, CA 94111 / USA Phone +1 415 912 5909

CHINAJianping Gao Representative China Phone +86 21 6149 8208

Have we sparked your interest?

Would you like to get to know your options in the Greater Zurich Area in more detail?

If yes, please contact your nearest Greater Zurich Area representative for more information.

We are happy to assist you in every aspect of expanding your business to the Greater Zurich Area!

Greater Zurich Area AG, May 2013: Incorporation 4