Switzerland GmbH vs AG: Legal Structures Guide 2026
Quick Summary
GmbH (limited liability company): minimum capital CHF 20'000.- fully paid in — the choice of 43% of Swiss founders in 2025
AG (corporation / stock company): minimum capital CHF 100'000.- with at least CHF 50'000.- paid in at incorporation
Sole proprietorship: no minimum capital, no limited liability, simplest structure
General partnership (SNC): no minimum capital, unlimited personal liability, at least two founders
Both GmbH and AG: limited liability, registered in the Commercial Register, subject to corporate tax
Key difference GmbH vs AG: the GmbH is simpler and cheaper to set up; the AG offers more flexibility for investors and capital raising
Incorporation time: 1 to 3 weeks for both GmbH and AG once all documents are ready
GmbH or AG? The Question Every Founder in Switzerland Must Answer
When setting up a company in Switzerland, the first decision you will face is your choice of legal structure. For the vast majority of founders — Swiss or foreign — the real question comes down to two options: the GmbH (Gesellschaft mit beschränkter Haftung, known in English as a limited liability company) and the AG (Aktiengesellschaft, known in English as a stock corporation or limited company). These are the two dominant capital company structures in Switzerland, and both offer limited liability. But they are designed for different purposes, different budgets and different growth trajectories.
This guide covers all four main legal forms available in Switzerland, with a detailed comparison of the GmbH and the AG to help you make the right choice for your project. Not sure yet? Use NewCo's legal form selector tool to find the right structure in minutes.
The Four Main Legal Structures in Switzerland
1. The GmbH — Switzerland's Most Popular Structure
In 2025, 43% of new companies registered in Switzerland chose the GmbH, making it the most widely used legal form in the country, with 22'457 new GmbHs created that year. It is the structure of choice for SMEs, family businesses and entrepreneurs who want liability protection without the complexity and cost of an AG.
What is a GmbH?
The GmbH is a capital company in which shareholders are liable only up to the amount of their capital contribution. Their personal assets are protected from the company's debts. The company has its own legal personality, separate from its owners.
Key requirements:
Minimum share capital of CHF 20'000.-, fully paid in at incorporation (in cash or in kind)
At least one shareholder (individual or legal entity, Swiss or foreign)
At least one manager with a domicile in Switzerland
Registered office in Switzerland
Registration in the Commercial Register
Advantages of the GmbH:
The GmbH requires relatively modest start-up capital and can be founded by a single person. Shareholders' liability is strictly limited to their capital contribution — personal assets are not at risk. The structure can also be converted into an AG at a later stage without liquidation, giving founders room to evolve as the business grows.
Disadvantages of the GmbH:
Founders of a GmbH cannot receive unemployment benefits unless they permanently leave the company. The company is subject to double taxation: profits are taxed at the corporate level, and any salary, bonus or dividends paid to shareholders are taxed again as personal income. Unlike an AG, the names of all GmbH shareholders are publicly listed in the Commercial Register — there is no anonymity. Certain decisions also require a shareholders' meeting and cannot be delegated to management, which can slow down operations as the company grows.
Ready to incorporate a GmbH? Start your GmbH formation with NewCo.
2. The AG — For Growth, Investors and Credibility
The AG represented 20% of new companies in Switzerland in 2025, with 10'561 incorporations. It is the preferred structure for larger ventures, holding companies, startups seeking venture capital and businesses with international ambitions.
What is an AG?
The AG is a stock corporation in which capital is divided into shares. Shareholders are liable only up to their share capital contribution. The AG has its own legal personality and is governed by a Board of Directors.
Key requirements:
Minimum share capital of CHF 100'000.-, of which at least CHF 50'000.- must be paid in at incorporation
At least one shareholder (individual or legal entity, Swiss or foreign)
A Board of Directors with at least one member domiciled in Switzerland
Registered office in Switzerland
Registration in the Commercial Register
Advantages of the AG:
Shareholder identity is not publicly disclosed in the Commercial Register, offering a degree of privacy not available in a GmbH. The AG structure is significantly more attractive to investors, because shares can be transferred simply and quickly — usually by written assignment — without requiring the consent of other shareholders. An AG can also issue different classes of shares and use instruments such as conditional share capital and capital bands, which are essential tools for equity participation plans and rapid capital raises. It also carries greater prestige and credibility with banks, lenders and international partners.
Disadvantages of the AG:
The AG requires a minimum capital of CHF 100'000.- at founding, of which at least CHF 50'000.- must be paid in — a significantly higher bar than the GmbH. The governance structure is more complex, with mandatory separation between the shareholders' meeting, the Board of Directors and the auditors. Like the GmbH, the AG is subject to double taxation on profits.
Ready to incorporate an AG? Start your AG formation with NewCo.
3. The Sole Proprietorship
In 2025, 34% of new registrations in Switzerland were sole proprietorships, reflecting its popularity among freelancers, consultants, tradespeople and independent professionals. It is tied to a single natural person and is the simplest business form available.
No special administrative formalities are required to start, other than registration in the Commercial Register if annual turnover exceeds CHF 100'000.-. No minimum capital is required.
Advantages: no start-up capital, complete management independence, no double taxation on profits, no mandatory audit.
Disadvantages: unlimited personal liability — both business and private assets are exposed to creditors in the event of debt. No unemployment benefits. Access to credit can be more difficult. Full accounting is required above CHF 500'000.- in annual turnover.
Find out more about setting up a sole proprietorship in Switzerland.
4. The General Partnership
The general partnership represented 3% of new Swiss company formations in 2025. It requires at least two natural persons and suits close partnerships between entrepreneurs who know and trust each other well. No minimum capital is required. The partnership is established by a contract between the partners, followed by registration in the Commercial Register.
Advantages: simple to set up, no minimum capital, suitable for small ventures with strong personal and professional ties between partners.
Disadvantages: each partner bears unlimited, joint and personal liability for all of the company's debts — including those incurred by co-partners. Shares cannot be transferred without the unanimous consent of all partners. Partners are not entitled to unemployment benefits.
GmbH vs AG in Switzerland: Direct Comparison
Share capital The GmbH requires a minimum of CHF 20'000.-, fully paid in at incorporation. The AG requires a minimum of CHF 100'000.-, with at least CHF 50'000.- paid in at founding.
Shareholder liability Both structures offer limited liability. In both cases, shareholders are liable only up to the amount of their capital contribution, not with their personal assets.
Shareholder privacy GmbH shareholders are publicly listed in the Commercial Register. AG shareholders can remain anonymous — their names are not publicly disclosed.
Share transferability Transferring GmbH shares requires the consent of the shareholders' meeting unless the articles of association state otherwise. AG shares can be transferred much more easily — usually by a simple written assignment — without shareholder approval.
Governance In a GmbH, more decisions must be passed by the shareholders' meeting and cannot be delegated to management. The AG has a clearer separation between the shareholders' meeting, the Board of Directors and the auditors, making it more efficient as the company grows.
Investor attractiveness The AG is significantly more attractive to investors. GmbHs cannot have a capital band or conditional share capital, which are the primary instruments used for equity participation plans and rapid capital raises in startups. Institutional investors typically prefer the AG for this reason.
Stock exchange listing GmbH shares cannot be listed on a stock exchange. AG shares can be, subject to standard listing requirements.
Taxation Both structures are subject to the same corporate tax treatment: federal tax of 8.5% on net income, plus cantonal and municipal taxes varying by canton — from approximately 11% in Zug to around 21% in higher-tax cantons. Both face double taxation on profits distributed to shareholders.
Conversion A GmbH can be converted into an AG at any time without liquidation, under the Swiss Merger Act. This is a common path for companies that started small and later seek to raise external capital or attract institutional investors.
Typical use case The GmbH suits SMEs, family businesses, local service companies and founders who want a simple, cost-effective structure with liability protection. The AG suits larger ventures, holding companies, startups seeking venture capital and businesses targeting international expansion or a future stock exchange listing.
How to Choose the Right Structure: 5 Key Criteria
1. Capital available
Your choice must be realistic relative to your financial resources. The GmbH is accessible from CHF 20'000.-. The AG requires at least CHF 100'000.- of which half must be paid in immediately. Factor in not just the share capital, but also notary fees, Commercial Register fees and your first months of operating costs.
2. Liability and risk
If your activity carries significant financial risk — construction, consulting, professional services — opting for a capital company (GmbH or AG) is strongly advisable. Both protect your personal assets. A sole proprietorship or general partnership does not.
3. Privacy
If you need shareholder anonymity — common in international holding structures or for high-profile founders — the AG is the only Swiss capital company that does not publicly disclose shareholder identity.
4. Growth and investors
If you plan to raise venture capital, bring in multiple investors or eventually list on a stock exchange, the AG is the right structure from the start. Its share transfer mechanism, capital instruments and governance structure are built for growth. Trying to adapt a GmbH for venture capital investment is possible but significantly more complex and costly than starting with an AG.
5. Tax and social security
Both GmbH and AG are subject to double taxation. Neither allows founders to claim unemployment benefits while they remain active in the company. Sole proprietorships avoid double taxation but offer no liability protection and no unemployment coverage. Always model your tax position before choosing — the effective corporate tax rate varies significantly by canton, and the right domicile can make a meaningful difference to your tax burden.
Still undecided? Use our interactive legal form selector — 12 questions, instant result.
What Happens After Incorporation
Regardless of the structure you choose, several obligations arise immediately after registration in the Commercial Register:
Social insurance (AVS/AI/APG): mandatory for all employers from the first employee. Affiliation with a compensation fund is required before paying any salary.
Occupational pension (LPP): mandatory for any employee earning more than CHF 22'680.- per year.
Accident insurance (LAA): mandatory for all employees from day one.
VAT registration: mandatory once annual turnover exceeds CHF 100'000.-. Voluntary registration is possible below this threshold and can be advantageous for recovering input VAT.
Accounting: mandatory for all capital companies. A balance sheet and income statement must be prepared annually and retained for ten years.
Audit: a limited audit is mandatory for GmbHs and AGs exceeding 10 full-time employees. Smaller companies may waive this requirement through opting-out.
NewCo accompanies founders through all of these post-incorporation steps. View our services and pricing.
Frequently Asked Questions
What is the difference between a GmbH and an AG in Switzerland?
Both are capital companies with limited shareholder liability, but they differ in capital requirements, governance and investor suitability. The GmbH requires a minimum capital of CHF 20'000.- fully paid in, has a simpler structure and discloses shareholder names publicly. The AG requires CHF 100'000.- with at least CHF 50'000.- paid in at founding, offers shareholder anonymity, easier share transfers and better access to investors and capital markets. The GmbH suits SMEs; the AG suits larger ventures and investor-backed companies.
Can a foreigner create a GmbH or AG in Switzerland?
Yes. Both structures can be founded and owned by foreign nationals or foreign legal entities. There is no nationality or residency requirement for shareholders. However, at least one manager (for a GmbH) or one Board member with sole signing authority (for an AG) must be domiciled in Switzerland. The company must also have a registered office in Switzerland.
How long does it take to incorporate a company in Switzerland?
Once all documents are ready and the capital has been deposited in an escrow account, the incorporation process typically takes one to three weeks for both a GmbH and an AG. The timeline depends on the workload of the relevant cantonal Commercial Register and the completeness of the documentation submitted.
What does it cost to create a GmbH in Switzerland?
Beyond the minimum share capital of CHF 20'000.-, you should budget for notary fees (up to CHF 3'000.-), Commercial Register fees (approximately CHF 600.-) and escrow account fees (up to CHF 250.- depending on the bank). With NewCo, the full GmbH creation process — notary fees included — starts from CHF 490.-. See our full pricing.
Can I convert a GmbH into an AG later?
Yes. The Swiss Merger Act allows a GmbH to be converted into an AG without liquidation. The company's existing contracts, rights and obligations transfer automatically to the new structure. The main requirement is meeting the AG's minimum capital threshold of CHF 100'000.- before conversion. This is a common path for companies that started as a GmbH and later need to raise external capital or attract institutional investors.
Which structure is best for a startup seeking venture capital?
The AG is significantly better suited for startups seeking venture capital. Its share transfer mechanism, the ability to issue different share classes, and instruments such as conditional share capital and capital bands make it the standard choice for investor-backed companies in Switzerland. Investors also generally prefer the AG because share transfers do not require shareholder approval, unlike in a GmbH.
What is the corporate tax rate in Switzerland?
Both GmbHs and AGs are subject to a federal corporate tax rate of 8.5% on net income, plus cantonal and municipal taxes. The effective combined rate varies significantly by canton, ranging from approximately 11% in low-tax cantons such as Zug and Nidwalden to around 21% in higher-tax cantons. Both structures are also subject to double taxation when profits are distributed to shareholders.
About the author
This article was written by the NewCo team, a Swiss company formation platform active since 2020. With over 10'000 companies created, our experts guide entrepreneurs through their administrative and legal procedures every day, in collaboration with experienced Swiss notaries.