Institutional
AG formation
The CHF 100,000 stock corporation, the usual choice for a holding: substance, a non-public shareholder register, shares that move freely.
AG formationSwiss holding company
formation & structuring
A Swiss holding is an ordinary AG or GmbH built to hold participations, and since the 2020 tax reform, the relief comes from the participation deduction and Switzerland’s treaty network, not the abolished holding privilege. We structure the participations, the substance and the treaty position first, then incorporate against it.
At a glance
The holding, structured for the relief that still exists.
Participation deduction and treaties, not the privilege abolished in 2020.
- Entity
- Ordinary AG or GmbH
- Tax relief
- Participation deduction (Beteiligungsabzug)
- Qualifying stake
- ≥ 10% or CHF 1m (dividends)
- Substance
- Resident board, office, real management
- Typical timeline
- 2–4 weeks (structuring first)
The essentials
What a Swiss holding is — and what changed in 2020
A Swiss holding company is an ordinary AG or GmbH under the Code of Obligations whose purpose is to hold participations in other companies. There is no separate holding legal form. The reason to put one in Switzerland is tax: qualifying dividends and capital gains are largely relieved, and the treaty network keeps cross-border dividend flows efficient. The one thing to get right at the start is that this is the post-2020 regime, not the old one.
The change that catches people out
The cantonal holding privilege was abolished on 1 January 2020 by the TRAF reform. Holdings are now taxed under ordinary rules, with relief delivered through the participation deduction. Any plan built on a Swiss “holding status” is working from a regime that no longer exists.
Who forms one
- groups placing a holding above Swiss or foreign operating companies;
- owners consolidating shareholdings under one Swiss roof;
- foreign parents wanting a Swiss holding for treaty access and substance.
The tax position
What actually relieves tax now
Two mechanisms do the work after the 2020 reform: the participation deduction on income, and the treaty network on outbound dividends. Neither is automatic; both depend on how the holding is structured.
| Item | Before 2020 | Now |
|---|---|---|
| Cantonal holding privilege | Exemption from cantonal income tax | Abolished (TRAF) |
| Dividend income | Exempt under privilege | Participation deduction (≥10% or CHF 1m) |
| Capital gains on participations | Exempt under privilege | Participation deduction (≥10%, held ≥1 yr) |
| Outbound dividend WHT | 35%, treaty-reduced | 35%, treaty- / EU-agreement-reduced |
| Substance expected | Lighter in practice | Real board, office, management |
The table shows the shape; the number depends on the canton, the size of each participation and where substance sits. We model the effective rate against the actual group before the holding is formed, not from a generic “Swiss holdings are tax-free” claim that stopped being true in 2020.
Where the ordinary rate still bites
The participation deduction relieves qualifying dividend and gains income in every canton, so a holding is not a hunt for the lowest headline rate the way a trading company is. The ordinary rate matters for the parts the deduction does not reach: interest, service or management income the holding earns itself, and the annual cantonal capital tax on its equity. For those, canton still counts.
| Canton | Combined rate | Note |
|---|---|---|
| Lucerne | 11.66% | Lowest in Switzerland |
| Zug | 11.71% | The usual holding seat |
| Nidwalden | 11.97% | Low-tax central Switzerland |
| Geneva | 14.70% | Higher, but deep substance pool |
| Zurich | 19.47% | Notional interest deduction available |
How it runs
Structuring, then incorporation
The order matters: the participation, tax and substance design comes first, and the incorporation is built to fit it. Timings overlap; the entity itself sits in the two-to-four-week range.
- Stage 1
Participation & tax map
What the holding will own, the qualifying thresholds, the treaty position of the ultimate owners, and the effective rate by candidate canton.
- Stage 2
Entity & substance design
AG or GmbH, capital, the resident board and office, and the substance the structure needs to be respected as Swiss-resident.
- Week 1–2
Articles & capital
Drafting the articles around the participations, opening the blocked capital account, and the bank confirmation the notary requires.
- Week 2–4
Notary & register
Notarisation and the commercial-register entry that brings the holding into existence, with the share and beneficial-owner registers opened.
- After
Contribution & go-live
Contributing or transferring the existing participations into the holding, the bank account, and the ongoing substance and reporting.
Budget Ask for a fixed budget
What it costs
The share capital (CHF 100,000 for an AG or CHF 20,000 for a GmbH) is the holding’s own equity, not a fee. The cost of building the holding is separate: the tax and participation structuring, notary and register fees, the resident board and office, and the contribution of existing shareholdings.
We quote a fixed budget in writing against the structure before any work begins. The value is a holding that withstands scrutiny and delivers the relief, not one that merely exists on the register.
The one duty that scales with a holding: issuance stamp duty
Federal issuance stamp duty (Emissionsabgabe) of 1% applies to equity a company issues, but the first CHF 1 million of capital is exempt (Art. 6 Federal Stamp Duty Act). A CHF 100,000 holding pays none. It only appears when a holding is capitalised well above CHF 1m, or when existing participations are contributed as equity above that line — and even then, contributions made under a qualifying restructuring (FusG) are exempt. This is exactly the kind of threshold that is cheap to plan around at formation and expensive to trip over afterwards, so we size the capital and the contribution route against it.
The entity choice
AG or GmbH for the holding
Both forms can hold participations and both qualify for the participation deduction — the entity choice carries no tax advantage either way. It turns on privacy, transferability and capital. Most holdings are an AG; a small single-owner holding can be a GmbH. The full detail is in our AG formation and GmbH formation guides; the dimensions that decide a holding are these.
| Dimension | AG | GmbH |
|---|---|---|
| Minimum capital | CHF 100,000 (≥ 50,000 paid in) | CHF 20,000 (fully paid) |
| Shareholders in public register | No — only the board is listed | Yes — owners named on Zefix |
| Transferring shares | By endorsement; no meeting needed | Written form + two-thirds resolution |
| Capital band for staged changes | Yes (Art. 653s–653v CO) | None |
| Typical holding fit | Groups, investors, exits, privacy | Small single-owner holding |
For a holding that will take investment, move participations or plan an exit, the AG’s free transfer and non-public register usually decide it. Where the holding is one owner sitting above one company and cost is the constraint, the GmbH does the same job for less capital. We confirm the choice against the group and the exit plan before forming it.
The honest view
When a Swiss holding is the wrong answer
A holding is a structure, not a saving in itself. It earns its cost only when there is participation income to relieve and a treaty position to protect. In several situations the cost of building and maintaining one outweighs anything it returns, and we say so before forming it:
- One trading business, no participations. If the company simply operates — it does not hold stakes in other companies — there is no participation income for the deduction to relieve. A plain AG or GmbH, or an SPV for a single asset, is the right entity, not a holding.
- Substance you cannot realistically maintain. The relief depends on a resident board that genuinely decides and real management in Switzerland. If the group cannot support that, a letterbox holding is challenged abroad and the saving it was built for disappears at the first foreign audit.
- No treaty benefit for the owner’s residence. The treaty network relieves the outbound dividend flow. Where the ultimate owner sits in a jurisdiction with no useful treaty or agreement with Switzerland, the 35% withholding tax is not reduced and the Swiss layer adds cost without protecting the distribution.
- Small stakes, thin income. Below the CHF 1m / 10% thresholds, or where participation income is modest, the annual substance, board and compliance cost can exceed the tax relieved. The holding runs at a net loss to the group.
- Anti-abuse exposure at home. Controlled-foreign-company and anti-abuse rules in the owner’s country can look through a thin Swiss holding and tax the income anyway. Where that applies, the structure has to earn its place on substance, not sit on paper.
None of these rules out a Swiss holding; each is a test it has to pass. We run the tests first, and if a holding is not the answer, we say which structure is.
What you need
What a Swiss holding requires
A holding that actually delivers the relief rests on more than a registration:
- an AG or GmbH with capital sized for the participations it will carry;
- participations structured to meet the deduction thresholds (≥ 10% or CHF 1m);
- a Swiss-resident board that genuinely decides, and a registered office;
- real substance: management activity in Switzerland, not a letterbox;
- a treaty position mapped for the dividend flow to the ultimate owners.
“Swiss holdings are tax-free” is a 2019 claim
The single most common error we correct is a structure built on the old holding privilege, abolished in 2020. Today the relief is conditional (on meeting the participation thresholds, on real substance, and on the treaty position) and a letterbox holding is increasingly challenged by foreign tax authorities. A holding designed for the pre-2020 regime can fail exactly where the owner expected the saving. We structure for the rules as they are now, so the relief survives a foreign tax audit, not just a Swiss registration.
Why Goldblum
Holding formation, in practice
Registering the entity is routine. Structuring it for the post-2020 relief, the treaty network and real substance — that is the work, and it is what we have done for cross-border groups since 2014.
Current
Built for the rules as they are
The structure designed for the participation deduction and post-TRAF taxation, not a privilege that no longer exists, so the relief is real.
Treaties
The dividend flow mapped
The withholding-tax and treaty position worked out for the route up to the ultimate owner before the holding is formed, not discovered at the first distribution.
Substance
Resident board and management
A resident board, office and genuine management activity, so the holding is respected as Swiss-resident where it counts, abroad.
Related
The entities a holding is built from
Foreign parent
Swiss subsidiary
A ring-fenced Swiss entity under a foreign parent, often the operating company a holding sits above.
Swiss subsidiaryThe missing piece
Resident director & office
The resident board and registered office a holding needs for substance and to satisfy Art. 718 CO.
Resident director & office FAQ
Swiss holding company: FAQ
01What is a Swiss holding company?
A Swiss holding company is an ordinary AG or GmbH whose main purpose is to hold and manage participations in other companies, rather than to trade itself. There is no separate 'holding' legal form. It is a normal Swiss company whose articles and balance sheet are built around participations. What makes Switzerland attractive for one is the participation deduction on qualifying dividends and capital gains, and the country's wide double-tax-treaty network, not a special holding entity.
02Does Switzerland still have the holding tax privilege?
No. The cantonal holding privilege (the status that exempted qualifying holdings from cantonal income tax) was abolished on 1 January 2020 by the Federal Act on Tax Reform and AHV Financing (TRAF). Any source still describing a Swiss 'holding privilege' or 'holding status' is out of date. Holding companies are now taxed under ordinary rules, and the relief comes through the participation deduction. Getting this right at formation matters: the structure that worked under the old regime is not the structure that works now.
03What is the participation deduction?
The participation deduction (Beteiligungsabzug) reduces the tax on income from qualifying participations. It applies to dividend income where the holding is at least 10 percent of the other company's capital or worth at least CHF 1 million, and to capital gains where at least 10 percent has been held for at least one year. The deduction is proportional to the share of net participation income in total profit, which in practice brings qualifying dividend and capital-gains income close to tax-free at the holding level. We structure the participations so the threshold is met.
04AG or GmbH for a holding company?
Usually an AG. A holding typically wants the CHF 100,000 of substance, a shareholder register that is not public, and shares that can move without a register entry, all of which the AG provides and the GmbH does not. A GmbH can hold participations perfectly well and costs less to capitalise, so for a small single-owner holding it can be the right call. We confirm the entity against the group structure and the exit plan before forming it.
05How much capital does a Swiss holding need?
There is no special minimum for a holding. It takes the ordinary minimum of whichever form you use: CHF 100,000 for an AG (at least CHF 50,000 paid in) or CHF 20,000 fully paid for a GmbH. The capital is the company's own equity, not a fee. What matters more than the minimum is that the holding is adequately capitalised for the participations it will carry and the financing it will do, which we size at formation.
06Is there withholding tax on dividends from a Swiss holding?
Switzerland levies a 35 percent withholding tax (Verrechnungssteuer) on dividends a Swiss company pays out, but it is reduced or eliminated under the double-tax treaty with the recipient's country and, for qualifying EU parents, under the Switzerland–EU agreement. The headline 35 percent is rarely the real cost for a properly structured cross-border holding. We map the treaty position before the structure is set, so the dividend flow up to the ultimate owner is not taxed more than it needs to be.
07Does a Swiss holding company need substance?
Yes, and more than it used to. To be treated as Swiss-resident, to access treaty benefits and to withstand anti-abuse scrutiny abroad, a holding needs real substance in Switzerland: a resident board that actually decides, an office, and genuine management activity, not just a registered address. A letterbox holding is increasingly challenged by foreign tax authorities. We build the substance into the structure rather than leaving it as an afterthought.
08Can a foreign parent set up a Swiss holding company?
Yes. A foreign company or individual can own a Swiss holding outright. The holding still needs a Swiss-resident director or officer (Article 718 or 814 of the Code of Obligations) and a registered office, which we provide, and it needs enough substance to be respected as Swiss-resident for treaty purposes. A Swiss holding under a foreign group is a common structure; the work is making it stand up, not merely registering it.
09What taxes does a Swiss holding pay now?
Since the 2020 reform a holding is taxed under ordinary corporate rules (federal corporate income tax plus cantonal and communal tax), but the participation deduction brings qualifying dividend and capital-gains income close to exempt, so the effective tax on participation income is low. The holding also pays an annual cantonal capital tax, for which some cantons give relief on participations. We model the effective rate for the chosen canton before incorporating.
10Which canton is best for a Swiss holding?
It depends on the participations, the financing and where substance can realistically sit. Low-tax cantons such as Zug are an obvious starting point, but the right canton is the one where the rate, the capital-tax relief and the practical ability to maintain substance line up for your structure, not the lowest headline rate. We compare cantons against the actual group before recommending a seat, rather than defaulting to a name.
11How long does it take to set up a Swiss holding?
The incorporation itself runs in the usual two-to-four-week range for an AG or GmbH: articles, notary, capital deposit and the commercial-register entry. The structuring around it (participation thresholds, treaty positioning, substance and the contribution of existing shareholdings) is what takes the thought, and is best done before the entity is formed rather than retrofitted. We do that structuring first, then incorporate against it.
The client's stories
What clients say
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Building a Swiss holding?
Tell us what it will hold and where the owners sit. A partner maps the participation, tax and treaty position, then forms the holding against it — structuring before incorporation, not after.
