How to Establish a Joint-Stock Company in Switzerland as a Hungarian Founder?

What is a Swiss joint-stock company (AG/SA), and how does it differ from the Hungarian Rt.?

The Swiss joint-stock company (Aktiengesellschaft, abbreviated AG; in French: société anonyme / SA; in Italian: società anonima / SA) is a capital company regulated under Swiss contract law (Obligationenrecht / OR, articles 620–763). The company is an independent legal entity: it is liable for its obligations exclusively through company assets, and shareholders' personal assets are — as a general rule — protected.

Key characteristics at a glance:

The Swiss AG and the Hungarian closed joint-stock company (Zrt.) are structurally similar, but the Swiss version is more flexible: a single shareholder and a single director are sufficient for incorporation, provided the director has a Swiss residence.

Is a joint-stock company recommended for a Hungarian founder?

An AG is not always the best choice. It is worth considering a limited liability company (Gesellschaft mit beschränkter Haftung / GmbH) as well, which requires only 20,000 CHF in capital.

An AG is justified if:

• External capital raising is planned (venture capital, investors), since shares are freely transferable (unless the articles of association restrict this).

• Stock exchange listing is a long-term goal.

• Large corporate partners or institutional clients expect the joint-stock company form.

• Privacy considerations are relevant: the data of registered shareholders is not always public in the Handelsregister (although beneficial ownership registration has been mandatory since 2023).

• The planned annual revenue and required capital justify the higher incorporation and maintenance costs.

As a Hungarian founder, it is important to know: if you do not reside in Switzerland, the company cannot be registered without a board member with a Swiss residence. In practice, this means either you must have a Swiss residence permit (Ausländerausweis), or you must engage a person with a Swiss residence as a director — which can also be obtained as a paid service, typically ranging from 1,500 to 5,000 CHF per year.

What are the steps involved in the incorporation process?

AG incorporation in Switzerland consists of legally prescribed sequential steps. Below is the process required by the OR and the Handelsregisterverordnung (HRegV).

1. Preparation: decisions and documents

Before incorporation, you must determine:

• The company name (can be checked in the zefix.ch database to see if it is available).

• The registered office (canton and municipality — this determines the tax burden and registration fee).

• The amount of share capital and the par value of shares (minimum par value: 0.01 CHF per share).

• The content of the articles of association (Statuten).

• The composition of the board of directors.

2. Articles of Incorporation and Notarial Deed

An AG is founded before a notary public (Notar). The founders sign the articles of incorporation (Gründungsurkunde), which must contain the articles of association, the share subscription declaration, and the election of the board of directors.

The notary's fee varies by canton, typically ranging from CHF 500–2,000.

3. Capital Contribution

The share capital (or the portion to be paid in) must be transferred to a blocked account (Sperrkonto) opened for this purpose before the notarial deed is executed. The bank issues a certificate of payment, which must be attached to the articles of incorporation. The blocked account becomes freely available only after registration in the Commercial Register.

4. Registration in the Commercial Register

The notary (or the founders' representative) submits the registration application to the cantonal commercial register office (Handelsregisteramt). After registration, the company's details appear in the federal register (zefix.ch) and in the official gazette, the Schweizerisches Handelsamtsblatt (SHAB).

The registration fee typically ranges from CHF 600–900 depending on the size of the share capital, but this varies by canton.

5. Tax Registration and Other Notifications

Following registration:

• UID number (Unternehmens-Identifikationsnummer / Business Identification Number): issued automatically at registration.

• VAT registration (Mehrwertsteuer / Value Added Tax): mandatory if annual turnover reaches CHF 100,000. Voluntary registration is possible at lower turnover.

• AHV/AVS registration (Alters- und Hinterlassenenversicherung / Old-Age and Survivors' Insurance): employer contribution notification to the cantonal AHV clearing office (Ausgleichskasse).

• UVG registration (Unfallversicherungsgesetz / Accident Insurance Act): mandatory with SUVA or an authorized private insurer if employees are hired.

The entire incorporation process — if all documents are in order — typically takes 2–4 weeks. In more complex cases (contribution in kind, foreign shareholders, special articles of association provisions), this may extend to 6–8 weeks.

What are the capital requirements and accounting rules?

Share Capital

The minimum share capital is CHF 100,000. At the time of incorporation, at least CHF 50,000 must be paid in cash or contributed as a non-cash contribution (apport). The apport must be valued and certified by an auditor.

Shares may be registered shares (Namenaktien) or bearer shares (Inhaberaktien). Bearer shares have only been issuable since 2019 if the company's shares are traded on an exchange — for non-listed AGs, this form has become practically obsolete.

Accounting and Auditing

Swiss accounting rules are set out in Articles 957–963b of the Code of Obligations (OR). Obligations depend on company size:

The annual financial statements (Jahresrechnung) are approved by the general meeting (Generalversammlung) and must be attached to the tax return.

How is a Swiss AG taxed, and what social contributions apply?

Corporate Income Tax

In Switzerland, corporate income tax operates at three levels:

1. Federal level: 8.5% of taxable profit (effective rate approximately 7.83% due to deductibility).

2. Cantonal level: varies by canton and municipality. The total effective tax burden (federal + cantonal + municipal) typically ranges between 11.9% and 21% in 2024.

3. Capital tax (Kapitalsteuer):an annual tax on equity capital, the rate varies by canton, typically between 0.001–0.5%.

Among the cantons with the lowest effective tax burden are Zug (approx. 11.9%), Nidwalden, and Appenzell Innerrhoden. The city of Zurich has a higher effective rate of approximately 19.7%.

Important: the OECD global minimum tax introduced in 2024 (Pillar Two, 15% minimum rate) is also in force in Switzerland for multinational enterprise groups with global annual revenue exceeding €750 million. Smaller companies are not directly affected.

Withholding tax (Quellensteuer) on dividends

If a Swiss AG pays dividends to a foreign shareholder, the Swiss withholding tax (Verrechnungssteuer) rate is 35%. Under the Swiss-Hungarian double taxation treaty (1981, as amended), this can be reclaimed or reduced if the shareholder proves Hungarian tax residency. The actual reclaim process is handled through the ESTV (Eidgenössische Steuerverwaltung / Federal Tax Administration).

VAT (MWST/TVA)

The Swiss standard VAT rate (Mehrwertsteuer / MWST) is 8.1% as of 2024, with reduced rates of 2.6% (food, pharmaceuticals, etc.) and 3.8% (hotel services). The registration threshold is CHF 100,000 in annual revenue.

Social security contributions

If the AG employs staff (including a managing director if in an employment relationship), the following contributions are mandatory:

BVG (berufliche Vorsorge) is mandatory for employees aged 22 and over earning more than CHF 22,050 annually (2024 coordination threshold — ⚠️ verify current amount).

What ongoing operational obligations does a Swiss AG have?

Board of Directors (Verwaltungsrat)

An AG is managed by a board of directors (Verwaltungsrat / VR). At least one board member must have a Swiss domicile and be authorized to represent the company (i.e., have signatory authority, either alone or jointly with others). Board members are elected by the general meeting and their term of office may not exceed 3 years (the articles of association may provide for a shorter period).

General Meeting (Generalversammlung)

An ordinary general meeting must be held at least once per year, typically within 6 months following the close of the financial year. The general meeting has authority to approve the annual report, decide on dividend distribution, and elect the board of directors.

Registration and notification obligations

• Change notification: changes to the board composition, registered office, company name, or share capital must be reported to the Handelsregisteramt.

• Beneficial ownership register: since 2023, AGs must maintain a register of beneficial owners (economic beneficiaries holding more than 25% interest) and must present it to authorities upon request.

• Tax return: annually, to the cantonal tax office (Steueramt), according to the rules of the canton of registration.

How do cantons differ from each other, and how does this affect the decision?

In the Swiss federal system, cantons have broad autonomy. From the perspective of an AG founder, the most important cantonal differences are:

• Effective tax burden: Zug, Schwyz, Nidwalden have lower rates; Geneva, the city of Zurich, and Basel-Stadt have higher rates.

• Registration fees and notary charges: vary by canton.

• AHV/AVS compensation fund: a different organization in every canton, with varying administrative processes.

• Mandatory daily sickness insurance (KTG): in some cantons you must join a cantonal fund; in others you can choose your insurer freely.

• Labour courts and employment law application: the federal Code of Obligations (OR) is the foundation, but cantonal courts may develop divergent practice.

If the founder has no Swiss domicile, when choosing the registered office they should consider that the cost and availability of engaging a local director also varies by canton.

What are the most common mistakes Hungarian founders make?

1. Overlooking the domicile requirement

One of the most frequent misunderstandings: founders assume they can manage a Swiss AG entirely from abroad, from Hungary, without anyone on the board of directors having a Swiss domicile. This is unlawful and will prevent registration.

2. Underestimating the actual tax burden

The nominal tax rates look attractive, but cantonal and municipal taxes, capital tax, withholding tax on dividends paid to foreign shareholders, and mandatory contributions together can represent a significant burden — especially if the managing director is employed by the company.

3. Neglecting BVG obligations

The second pillar (occupational pension / BVG) is not optional. If the managing director receives a salary and meets the entry conditions, BVG contributions are mandatory. Failure to do so can result in retroactive payment obligations and fines.

4. Misinterpreting the double taxation treaty

The Hungarian-Swiss double taxation treaty does not automatically eliminate Swiss withholding tax on dividends — it only provides a reclaim mechanism. The reclaim procedure is time-consuming and involves documentation requirements.

5. Delays in reporting changes to the Handelsregister

In Switzerland, changes to corporate law (board changes, office relocation, capital increase) must be reported immediately. Late reporting can incur fines and may have legal consequences vis-à-vis third parties.

6. Underestimating accounting and audit obligations

Even if the company qualifies for limited audit (eingeschränkte Revision), preparing annual financial statements under Swiss accounting rules (OR 957 et seq.) requires expertise. Because Swiss accounting principles differ from Hungarian rules (for example, valuation rules and reserve formation), engaging a Swiss accountant is strongly recommended.

Sources

• Federal portal (ch.ch): https://www.ch.ch/en/

• SME portal – Swiss small and medium enterprise information (kmu.admin.ch): https://www.kmu.admin.ch/

• Self-employment and company formation in Switzerland (ch.ch): https://www.ch.ch/en/work/self-employment/

• Federal Commercial Register (zefix.ch): https://www.zefix.ch/

• Federal Tax Administration – ESTV (estv.admin.ch): https://www.estv.admin.ch/

• Swiss Code of Obligations (OR) – Articles 620–763 (Aktiengesellschaft): https://www.fedlex.admin.ch/eli/cc/27/317_321_377/de (German text)

• Federal Statistical Office – BFS (bfs.admin.ch): https://www.bfs.admin.ch/