How do you establish a public limited company in Switzerland?

What is a Swiss public limited company, and when is it worth choosing this legal form?

A Swiss public limited company (AG/SA) is a separate legal entity: as a rule, the shareholders are liable for the company’s debts only up to the amount of capital they have paid in. This limited liability is what makes an AG attractive for raising capital, investor structures, and higher-risk businesses.

The AG is governed by the Swiss Code of Obligations (Obligationenrecht / OR, Code des obligations / CO), primarily Articles 620–763 OR. The law was amended by a major reform on 1 January 2023, which affected the capital structure, shareholder rights, and rules for general meetings.

When is it worth choosing an AG?

• If several investors or shareholders are involved in the business.

• If the company’s shares are intended to be treated or transferred as securities.

• If the owners’ personal liability must be clearly separated from the company’s risks.

• If the business is capital-intensive and external financing is planned.

For smaller, single-owner businesses, a limited liability company (Gesellschaft mit beschränkter Haftung / GmbH, société à responsabilité limitée / Sàrl) may be a simpler and less expensive alternative. The choice between an AG and a GmbH has tax and organisational consequences – it is worth discussing this decision with an expert.

What capital and prerequisites does Swiss law require?

Share capital and payment obligation

The minimum share capital (Aktienkapital / capital-actions) of an AG is CHF 100 000. Of this amount, at least CHF 50 000 must be paid in at incorporation, either in cash or as an in-kind contribution (non-cash contribution). If the share capital is CHF 100 000 and is paid in full, the minimum requirement is met.

The 2023 OR reform introduced the capital band (Kapitalband / fourchette de capital): the articles of association may authorise the board of directors to increase the share capital within a defined range – up to 150% of the share capital, or reduce it by up to 50% – without a separate resolution of the general meeting. This allows for more flexible capital management.

Shares

The shares of an AG may be:

• Registered shares (Namenaktien / actions nominatives): the shareholder’s name is entered in the register.

• Bearer shares (Inhaberaktien / actions au porteur): since 2019, these may only be issued if the company’s shares are listed on a stock exchange, or if the shares are dematerialised. For a non-listed AG, bearer shares are effectively excluded.

Registered office requirement

The company must have its registered office in Switzerland. At least one member of the board of directors must be resident in Switzerland and have sole signatory authority. This requirement remains in force after the 2023 reform.

How does incorporation work step by step?

In Switzerland, an AG is incorporated before a notary (Notar / notaire). The main steps are:

1. Preparation

• Defining the company name: The name must include the designation “AG” or “SA” (or, alternatively, “Aktiengesellschaft” / “société anonyme”). The name should be checked in advance in the Commercial Register (zefix.ch).

• Drafting the articles of association (Statuten / statuts): It includes the company name, registered office, purpose, share capital, share structure, and organizational rules.

• Composition of the board of directors: At least one member with Swiss residence and sole signatory authority.

• Preparing the capital: The founders deposit the amount to be paid in into a so-called foundation account (Gründungskonto / compte de fondation) at a Swiss bank. The bank confirms that the payment has been made.

2. Notarial deed (Gründungsurkunde / acte de fondation)

The founders — or their authorized representatives — sign the deed of incorporation before the notary. It includes the articles of association, the appointment of the board of directors, and the designation of the auditor (if required).

3. Entry in the Commercial Register

The deed of incorporation and the related documents must be submitted to the competent cantonal Commercial Register Office (Handelsregisteramt / office du registre du commerce). After registration, the company acquires legal personality.

The registration fee varies by canton; typically it is around 600–1000 CHF, but together with notarial fees and other administrative costs, the total one-time incorporation cost can reach 3000–6000 CHF or more, depending on complexity.

4. Release of the bank account

After registration, the bank releases the amount blocked in the foundation account, and it becomes available to the company.

Summary of required documents

How is the Swiss AG structured?

General Meeting (Generalversammlung / assemblée générale)

The supreme decision-making body. Its powers include amending the articles of association, electing the board of directors, approving the annual financial statements, and deciding on dividend payments. The 2023 reform also made it possible to hold a fully virtual general meeting.

Board of Directors (Verwaltungsrat / conseil d'administration)

The operational and strategic management of the AG is carried out by the Board of Directors. It consists of at least one member. The Board is responsible for bookkeeping, internal controls, and representing the company.

Important: at least one member of the Board of Directors must have residence in Switzerland and must have sole signing authority. For Hungarian founders, this means that if none of them lives in Switzerland, a person with Swiss residence must be appointed to the Board of Directors – this can also be a paid "nominee director" service, with an annual fee typically ranging from CHF 2,000–6,000 .

Auditor (Revisionsstelle / organe de révision)

The OR distinguishes between ordinary (ordentliche Revision) and limited (eingeschränkte Revision) audits:

• Ordinary audit is mandatory if the company meets two of the following three thresholds in two consecutive years: balance sheet total > CHF 20 million, revenue > CHF 40 million, number of employees > 250. It is automatically mandatory for listed companies.

• Limited audit is mandatory for smaller AGs, unless all shareholders unanimously waive it (opting out) and the company has no more than 10 full-time employees.

What taxes and contributions need to be considered?

Corporate income tax (Gewinnsteuer / impôt sur le bénéfice)

The profit of a Swiss AG is taxed at federal, cantonal, and municipal level. The effective combined tax burden varies significantly from canton to canton:

• Federal level: 8.5% (on net profit, which is effectively about 7.83% when calculated on gross profit).

• Cantonal + municipal level: varies by canton; the total effective tax burden across Switzerland typically ranges from 11–21% .

Traditionally, Zug, Nidwalden, and Appenzell Ausserrhoden are among the low-tax cantons, while Geneva and Zürich mean a higher burden – although tax rates have also fallen in Zürich canton in recent years.

The OECD global minimum tax introduced in 2024 (Pillar Two, 15% minimum rate) affects large multinational groups (annual global revenue > EUR 750 million) through the supplementary tax (Ergänzungssteuer) also adopted in Switzerland. It does not directly affect smaller AGs.

Capital income tax and withholding tax (Verrechnungssteuer / impôt anticipé)

Dividends paid by the AG are subject to a 35% federal withholding tax (Verrechnungssteuer). This can be reclaimed by shareholders who are tax resident in Switzerland, and under double taxation treaties it can also be refunded in part or in full for foreign shareholders.

Under the Hungarian-Swiss double taxation treaty (1981, as amended), the withholding tax on dividends paid from Switzerland to Hungary can generally be reduced to a maximum of 15% if the recipient is the beneficial owner. To apply the treaty, a certificate of residence and the prescribed procedure are required.

Capital tax (Kapitalsteuer / impôt sur le capital)

The AG also pays capital tax at cantonal level on its equity. The rate varies by canton and is generally low (around 0.001–0.5%), but it must be taken into account.

Social security contributions (AHV/AVS, IV/AI, EO/APG)

If the AG employs staff – including members of the Board of Directors if they are employed under an employment relationship – the usual Swiss employer contributions must be paid. The combined employer and employee AHV/IV/EO contribution is approx. 10.6% (2025 data; split equally between employer and employee).

What does limited liability mean in practice?

As a rule, AG shareholders are liable only up to the amount of capital they have paid in. This means that if the company goes bankrupt, a shareholder can lose at most the amount invested in the shares – their personal assets are not at risk.

However, this protection is not unlimited:

• Members of the board of directors remain personally liable if they commit a breach of duty (e.g. late filing for bankruptcy, deficiencies in bookkeeping).

• If a shareholder is also a member of the board of directors and actively participates in managing the company, courts may in certain cases pierce the liability shield (so-called Durchgriffshaftung).

• Banks and lenders often require personal guarantees behind an AG, especially for start-ups.

Important for Hungarian founders: liability assumed as a board member is assessed under Swiss law, regardless of whether the person concerned lives in Hungary.

What registration and reporting obligations does an AG have?

• Annual financial statements (Jahresrechnung / comptes annuels): The board of directors is required to prepare an annual balance sheet, income statement and – above a certain size – a cash flow statement and accompanying notes.

• Audit: Mandatory or optional, as set out above.

• Tax return: Must be filed annually with the cantonal tax office (Steueramt / administration fiscale cantonale).

• Commercial Register: Changes (change of director, change of registered office, capital changes) must be reported.

• Register of beneficial owners: Since 2015, an AG has been required to keep an internal register of shareholders and beneficial owners (Aktionärsregister / registre des actionnaires), and in certain cases there is also a reporting obligation to the authorities.

What mistakes do Hungarian founders most often make?

1. Underestimating the requirement for a director resident in Switzerland

Many do not take into account that at least one director must be resident in Switzerland. A nominee director service is reliable, but not cheap, and because of the director’s personal liability, the person must be selected carefully.

2. Confusing share capital with actual operating capital

Paying in the CHF 100,000 share capital does not mean that the company has sufficient operating capital. The company may use the share capital, but if it is exhausted and the company is loss-making, the board must take action – failure to do so gives rise to personal liability.

3. Ignoring cantonal tax differences

Choosing the registered office is an important tax decision. If a company is registered in a low-tax canton but actually operates elsewhere, the authorities may question whether the registered office is genuine.

4. Misunderstanding the audit requirement

“Opting-out” (waiving the audit) is only possible if all shareholders agree unanimously and the company has no more than 10 full-time employees. If this condition is not met, an audit is mandatory.

5. Assuming the double taxation treaty applies automatically

The benefits of the Hungarian-Swiss treaty are not automatic: the required documents must be submitted, and the procedure must be completed in time. If this is missed, the full 35% withholding tax will be deducted.

When to bring in an advisor

This article is for information purposes only and does not replace legal or tax advice. In the following situations, involving a specialist – a lawyer, accountant or tax advisor with expertise in Swiss law – is strongly recommended:

• If none of the founders has a Swiss place of residence, and a nominee director needs to be engaged.

• If part of the share capital is to be contributed as an in-kind contribution rather than in cash.

• If the company structure spans multiple countries (for example, a Hungarian parent company and a Swiss subsidiary).

• If dividend payments and the application of the double taxation treaty require specific planning.

• If directors’ liability issues arise in a complex ownership structure.

• If the company is planning rapid growth and questions around the capital band or share issuance come to the fore.

Sources

• Swiss federal portal (general information on company formation): https://www.ch.ch/en/

• Swiss Code of Obligations (Obligationenrecht / OR), Chapter on AG (OR Articles 620–763): https://www.fedlex.admin.ch

• Federal Commercial Register and company name check (Zefix): https://www.zefix.ch

• Federal Tax Administration – withholding tax (Verrechnungssteuer): https://www.estv.admin.ch

• List of cantonal commercial registers: https://www.kmu.admin.ch

• Text of the Hungarian-Swiss double taxation treaty: available in the National Legislation Database (njt.hu) and on the website of the Swiss Federal Tax Administration

Related Articles

• How do you set up a public limited company in Switzerland as a Hungarian founder?

• How much does it cost to set up a company in Switzerland? A cost plan for Hungarian entrepreneurs

• How much does it cost to set up a company in Switzerland?