Swiss company types: every legal form and how to choose

Foreign founders usually arrive with home-country labels — LLC, Ltd, Inc, Sàrl — and the first task is translation, because picking the wrong Swiss form over a terminology mix-up is expensive to undo. Start with the map, then the comparison, then the choice.

Translating the terms: LLC, Ltd and the Swiss forms

Switzerland writes company law in three languages, and international usage adds English on top. This table is the decoder:

Two traps hide in the translations. A “Swiss LLC” is the GmbH/Sàrl — but unlike a US LLC, it is not tax-transparent by default and its shareholders are public. And “Ltd” maps to the AG in substance, though Swiss company names use the German/French/Italian suffixes, not “Ltd” itself.

The main forms at a glance

All figures as of July 2026:

The AG: the investor-grade standard

The Aktiengesellschaft is the form banks, investors and international counterparties know best. Shareholders stay anonymous — only board members appear in the register — and shares transfer by simple assignment, which makes the AG the default vehicle for holdings, trading houses and anything heading towards outside capital. The price of entry is the CHF 100'000 capital, of which at least half must be paid in at formation. Full profile: Swiss AG; the mechanics of its share capital are covered under Swiss shares.

The GmbH: the working-company default

The GmbH delivers the same limited liability at a fifth of the capital, which makes it the most common choice for owner-managed businesses. Its structural trade-off is publicity: every shareholder is listed in the commercial register, visible to anyone on Zefix. Transfers of shares need written form and, by default, shareholder approval (Art. 785 OR — notarisation has not been required since the 2008 GmbH reform); that is still tighter than the AG, which suits closely held firms and deters fast-moving cap tables. Full profile: Swiss GmbH.

Sole proprietorship and partnerships

The sole proprietorship is the zero-formality start: no capital, registration in the commercial register only compulsory from CHF 100'000 annual turnover — but the owner must live in Switzerland with the right to work here (citizens and B/C permit holders qualify, non-resident foreigners do not), the firm name must contain the owner's surname, and liability is personal and unlimited. The general partnership (Kollektivgesellschaft) extends the same logic to several partners, all jointly and severally liable. Both forms suit low-risk service businesses; both hit a wall when investors, liability separation or a foreign owner enter the picture.

Branch or subsidiary: the foreign company's fork

A foreign company entering Switzerland chooses between a branch office and a Swiss subsidiary. The branch office is an extension of the parent — registered in Switzerland, taxed on its Swiss profit, but legally the same entity, so every branch obligation lands on the parent's balance sheet. The subsidiary (GmbH or AG) is a separate Swiss person that contains its own risk and signals commitment to Swiss banks and customers. Rule of thumb from practice: branches fit regulated groups and cost-driven market entries; subsidiaries fit everyone who wants the Swiss entity to stand on its own — in liability, in banking and in a later sale.

Association and foundation: the non-profit pair

The Verein (association) is member-governed, needs no capital and acquires legal personality without register entry in the basic case — the workhorse of clubs, industry bodies and non-profits: Swiss Verein. The Stiftung (foundation) has no members at all: assets are irrevocably dedicated to a purpose and supervised by the state — the vehicle for philanthropy, succession and asset dedication: Swiss foundation. Neither distributes profits to owners; using them as disguised commercial vehicles fails at the supervision stage.

How to choose in practice

The choice between AG, GmbH and the remaining Swiss forms comes down to four questions, worked through in order. Liability: can you personally absorb the worst-case loss? If not, only AG and GmbH qualify. Capital: CHF 100'000 available without starving operations → AG is open; otherwise the GmbH delivers the same protection for CHF 20'000. Privacy and investors: anonymous ownership or outside capital planned → AG; owner-managed and closely held → GmbH. Residence: no Swiss resident in the team → any capital company plus a resident director mandate; sole proprietorship is off the table entirely. The full governance detail behind each answer sits in the company law guide.

When the standard advice fails

Three situations break the standard AG-or-GmbH logic. US owners: the GmbH is check-the-box eligible for US tax purposes, the AG is a per-se corporation — for American founders this single IRS distinction can outweigh every Swiss criterion, so US tax advice belongs before the notary appointment, not after. The anonymity seeker with CHF 20'000: there is no cheap private form — GmbH shareholders are public, and the AG's privacy costs CHF 100'000 in capital; nominee constructions do not change the register. The solo founder promising investors “soon”: converting a GmbH to an AG later is possible but costs a notarised conversion; if the financing round is genuinely close, founding the AG directly is cheaper than converting in year two.