The Benefits Of Swiss Offshore Company Formation
Switzerland is often regarded as an offshore company location, along with many other offshore jurisdictions. However, unlike other “brass plate” jurisdictions, it has a range of benefits, such as its relatively low tax rates, a reputation for quality and security and its ideal location in the heart of Europe. Whilst Switzerland is not a member of the EU, it also enjoys many bilateral treaties with the EU as well as an extensive range of International Double Tax Treaties.
Many international companies and entrepreneurs decide to incorporate their company formation and administration in Switzerland for these reasons and in some cases, they will even decide to take up the option of personal, permanent or temporary residency.
Below, we have included some useful information relating to Swiss offshore company formation and administration, including the types of business organisation, share capital structures, corporate taxation, company formation procedures and documentation, and incorporation costs.
Switzerland – Forms of Business Organization
| Swiss Corporation (Aktiengesellschaft (AG)) | Company with predetermined capital divided into bearer or registered shares. Shareholders liability limited to nominal capital invested in shares. |
| Limited Liability Company (Gesellschaft mit beschränkter Haftung (GmbH)) | Company with limited capital divided into quotas. Any change or transfer of quotas requires amendment of statutes. |
| General Partnership (Kollektivgesellschaft) | Partnership of two or more individuals in which partners have unlimited liability. |
| Limited Partnership (Kommanditgesellschaft) | Partnership of two or more persons or companies. One or more have unlimited liability while other partners may have limited liability. |
| Simple Partnership (Einfache Gesellschaft) | Contractual relationship between two or more individuals or companies relating to a specific project. |
| Cooperative (Genossenschaft) | Union of minimum of seven persons (with no upper limit) organised as an entity mainly by agricultural and/or large retail organisations. |
| Branch | Locally registered branch office of Foreign Corporation. |
| Sole Proprietorship | Individual trade |
Switzerland – Types of Share Capital and Share Classes
| Minimum Share Capital | For a Swiss Corporation (AG) the minimum capital is CHF 100’000 of which min CHF 50’000 must be paid-in. For a Limited Liability Company (GmbH) the minimum capital requirement is CHF 20’000. Capital may also be contributed by transfer and assignments of asset(s) of equivalent value subject to confirmation of valuations by a Swiss Auditor. |
| Denomination | Minimum par value for an AG is CHF 0.01 per share. For a GmbH the min quotas are CHF 100.00 or multiples thereof. |
| Registered Shares | Registered Shares may be issued provided that 20% of the capital has been subscribed subject to a minimum of CHF 50’000. For an AG the shareholders identity is not recorded in the Commercial Registry. |
| Bearer Shares | Bearer Shares may not be issued after 01.01.2020 other than by listed Companies for special purposes |
| Dual-Class Common Stock | Shares may be issued with differing voting power and par values. Voting shares must be in Registered form. |
| Non-Voting Shares (Participation certificates) | Swiss Corporations may issue Non-Voting Shares which convey rights etc. but do not permit the holders to vote at shareholders meetings. |
| Non-Equity Shares | Swiss Corporations may issue these shares, which have no par value or voting rights – but may confer on the holder certain rights to liquidation proceeds or rights to subscribe to new Shares. |
Switzerland – Corporate Taxes for Zug Companies
| Tax Description | Swiss Activities | International Activities |
| Federal Corporate Income Taxes | 8.5% | 8.5% |
| Canton/Municipal Corporate Income Taxes | 3% on profits up to CHF 100’000 6.25% on profits over CHF 100’000 |
3% on profits up to CHF 100’000 6.25% on profits over CHF 100’000 (Reduced tax rates at cantonal level) |
| Cantonal/Municipal Capital & Reserves Tax | 0.5% | 0.5% (Reduced capital tax rates at cantonal level) |
| Withholding Taxes | 35% Dividends and Bond Interest 0% on Royalties, Licenses and Similar Fees Refund dependent on Double tax treaties. |
35% Dividends and Bond Interest 0% on Royalties, Licenses and Similar Fees Refund dependent on Double tax treaties. |
| VAT | 7.7% Standard Rate 2.5% for goods covering basic needs 3.7% for accommodation related services. VAT Registration required for turnover in excess of CHF 100,000 p.a. |
Swiss VAT not chargeable on services performed outside Switzerland or goods exported outside Switzerland. VAT Registration required for turnover in excess of CHF 100,000 p.a. |
| Capital Gains | Capital Gains are generally recognized as income for Federal and Cantonal tax purposes unless covered by the participation exemption rules. Investments in CH – Normal Income tax rates apply or exempt. |
Investments where over 10% (or CHF 1 Mio) voting rights held and held for more than one year are exempt from CH tax under participation exemption rules. |
| Capital Gains on Real Estate | Real Estate in CH – 5%-60% | Gains on Foreign Real Estate exempt from CH tax. |
| Dividend Income | 0% or partially exempt provided more than 10% or CHF 1 Million equity holding. | 0% or partially exempt provided more than 10% or CHF 1 Million equity holding. |
| Foreign Income | Not taxed incl. Real Estate Income | Not taxed incl. Real Estate Income |
Switzerland – Company Incorporation Procedures
| Core Incorporation Tasks | |
|---|---|
| Company Name | Agree and check name availability with Swiss Commercial Registry |
| Prepare founding documents | Articles of Association, Public Deed etc. |
| Payment of capital | Swiss Bank Account or Contribution in Kind |
| Founding of Company | Deed of incorporation with Notary Public |
| Commercial Registry | Publication in the Commercial Registry of the relevant Canton |
Core documentation required for incorporation of a Swiss Company
| Core Incorporation Tasks | |
|---|---|
| Articles of Association | Draft and agree |
| Corporate Information | Company Name Registered Office and address Capital Structure Founders Details & Signatory Powers Board of Directors & Signatory Powers Statutory Auditors (if required) Officers & Signatory Powers |
| Auditor Acceptance Letter | Auditor appointed must confirm acceptance in writing (if required) |
| Confirmation of paid in Capital | Must be in blocked/Escrow account at Swiss Bank if paid in cash |
| Power of Attorney | To represent founders in incorporation matters |
| Founder’s declaration | Incorporation declaration |
| Qualifying shares declaration | |
| Proxy Agreement | If to be incorporated in absence of founders |
| Statutes | Draft and agree |
| Shareholder’s Agreement | Draft and agree if applicable |
| Form 3 Stamp Duty on new shares | 1% only if value greater than CHF 1’000’000 |
| Shareholder Register | Create Register & initial entries/issue certificates |
| Commercial Registry Submission | New company details and Notarised Public Deed and accompanying documents to be submitted to Commercial Registry |
| Entry in Commercial Register | Official Publication of incorporation |
| VAT Registration | Registration application to be made to VAT Authorities If Applicable |
Incorporation and Administration Costs for
Swiss Stock Corporation (AG/SA) or Limited Liability Company (GmbH/Sarl)
| Incorporation Fee | CHF 4’500 | This covers all work associated with preparing deed of incorporation, constituent documentation, proxy and attending notary meetings and registration with local commercial registry. |
| Notary and Commercial Registry Fees | CHF 1’700 | Approx Fees charged by Notary Public and Commercial Registry Dept for company with capital of CHF 100’000. |
| Stamp Duty | N/A | Federal Duty payable at 1% on capital subscribed over CHF 1’000’000. |
| Annual Directors fee | CHF 6’000 p.a. | Fees paid for Nominee Swiss Director (at least one Swiss resident director required by law). |
| Annual Maintenance of Registered Office | CHF 3’000 p.a. | Provision and maintenance of registered office address plus handling of mail, telephone, forwarding etc. |
We help with agreeing chart of accounts for your Company
Assistance with setting up an Accounting Mandate for your Company
Registration services for Swiss VAT (where applicable)
Preparation of a summary budget for the first 12 months of trading
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Swiss Company Formation
We assist you with the formation of a Swiss Company, including registration, administration and operational services.