The most frequently chosen form of legal entity established in Switzerland is the corporation, or the joint-stock company. In Switzerland it is called an AG (in German) or an SA (French). It is a legal form for holding and financial companies. The liabilities of an AG are limited to the assets and the authorized capital is set in advance and then separated into shares. Also, there is no need to pay taxes on dividend income. For a joint-stock company, there is a dividend tax, or “withholding tax”, which is 35% of the dividend payout.
Swiss Corporation — General characteristics and requirements
In order to establish an AG, the share capital has to be of a minimum of CHF100,000. Registered or bearer shares are allowed, but in the case of bearer shares, the company has to fully pay the capital. If registered shares are chosen, then partial payment of share capital is possible, which is required to be no less than CHF50,000. There have to be a minimum of three shareholders for the corporation, and at least one has to be a resident of Switzerland. The shareholders may remain completely anonymous since they are not obliged to register at the Registry Office. Concerning the board, there has to be at least one member. It is desirable that the majority of board members would have Swiss residence, while the residence of employees does not matter (however, a working permit for them will be required). Regarding the question of employees, it is not a must to have a secretary. Another requirement for an AG would be appointing an auditor (which is not compulsory anymore for smaller companies). It takes from between one to two weeks for an AG to be established.
Advantages of a Swiss corporation
An AG as a legal entity has a number of benefits to consider:
- The liability to the assets of the company is limited
- Providers of the company remain completely anonymous
- Annual financial statements are required to be published only in case the AG has outstanding bonds or is listed on the stock exchange
- There is a significant freedom of scope
Establishing a Swiss corporation
In order to establish an AG in Switzerland, a few procedures have to be followed. Firstly, the minimum of three shareholders is required and the share capital has to be not less than CHF100,000 (as mentioned above). It is compulsory to create governing bodies and legally prescribed incorporation articles. At the end of the incorporation procedure, a company is entered in the commercial register, which is then published in the Swiss Commercial Gazette.
Required governing bodies
It is compulsory to have three governing bodies in the case of a joint-stock company. They are:
- The General Shareholders Meeting
This is the governing body with the most powers and the highest status. They can modify and define the articles of incorporation, elect the Board of Directors and approve such documents as annual reports, balance sheets and income statements. They also decide on the profit distribution and approve the activity of the Board of Directors.
- The Board of Directors
This governing body comes after the general shareholders meeting and is the managing body of the company. It is desirable that the majority of the Board are Swiss residents and the Board itself has to consist of at least one or more members who, at the same time, have to be shareholders of the corporation.
- Statutory auditors
This governing body is responsible for the accuracy of the annual financial statements, which are then reported to the Board of Directors. All auditors must be certified and independent.
In order to avoid any complications that may arise during the process of company formation, contact Goldblum and Partners, and our qualified specialists will gladly assist you with any questions you may have concerning documentation and other issues.