Foreign parent
Branch office
A Swiss branch of the foreign company: no separate capital, but part of the parent, which stays liable. The lighter route to test the market.
Branch officeSwiss subsidiary
under a foreign parent
A Swiss subsidiary is a separate, ring-fenced AG or GmbH owned by a foreign parent: its own capital, its own board, its own liability. It is the form a group uses when it commits to Switzerland and wants the Swiss risk contained, with clean treaty access and local standing. We weigh it against a branch, size the capital and substance, provide the resident board, and form it in full.
At a glance
A committed Swiss entity, ring-fenced from the group.
Separate company, separate liability — the form for a permanent Swiss presence.
- Legal status
- Separate Swiss AG or GmbH
- Liability
- Ring-fenced to its capital
- Capital
- CHF 100,000 (AG) / 20,000 (GmbH)
- Resident director
- Required (Art. 718 / 814 CO)
- Typical timeline
- 2–4 weeks (structuring first)
The essentials
What a Swiss subsidiary is, and when it fits
A Swiss subsidiary is a separate Swiss company (usually an AG or GmbH under the Code of Obligations) owned by a foreign parent. It has its own legal personality, capital, board and accounts, and the parent’s exposure is limited to its investment. That separation is the reason to choose it: a group commits to Switzerland through a subsidiary when it wants the Swiss risk ring-fenced, local credibility, and clean treaty access, rather than the lighter footprint of a branch.
When a subsidiary is the right call
- a permanent Swiss operation, not a market test;
- activity that can generate liability the parent must keep contained;
- a structure that needs local standing with banks and counterparties;
- a group relying on Switzerland’s treaty network for the entity.
When a branch is lighter
If the presence is provisional or the parent is comfortable carrying the liability, a branch avoids capitalising a company. The decision below sets out exactly where the line falls between the two.
The decision
Subsidiary or branch
Both give a foreign group a Swiss footing. The subsidiary buys a liability ring-fence and local standing with capital and governance; the branch trades those away for a lighter footprint. That trade is the decision.
| Subsidiary (AG/GmbH) | Branch (Zweigniederlassung) | |
|---|---|---|
| Separate legal entity | Yes, own Swiss company | No, part of the parent |
| Liability | Ring-fenced to its capital | Parent fully liable |
| Swiss capital | CHF 100,000 / 20,000 | None required |
| Treaty access | Direct, as a Swiss resident | Through the parent |
| Reads as | Committed Swiss entity | Arm of a foreign company |
| Set-up weight | Fuller (capital, governance) | Lighter |
The table is the starting point. Which fits turns on how permanent the presence is, how much liability the parent will carry, and whether treaty access and local credibility are doing real work, which we settle before any drafting.
How it runs
Structuring, then incorporation
For a subsidiary the design (capital, substance, transfer pricing, treaty position) comes first, and the incorporation is built to fit it. Timings overlap; the entity sits in the two-to-four-week range.
- Stage 1
Structure & substance design
AG or GmbH, the capital sized to the activity, the resident board, the office, and the substance the ring-fence and treaty position need.
- Stage 2
Tax & transfer pricing
The Swiss tax posture, the arm’s-length basis for dealings with the parent, and the withholding position on dividends up to the group.
- Week 1–2
Parent documents & capital
The parent’s corporate documents legalised, the articles drafted, and the capital paid into the blocked account for the bank confirmation.
- Week 2–4
Notary & register
Notarisation and the commercial-register entry that brings the subsidiary into existence, with the share and beneficial-owner registers opened.
- In parallel
Bank & go-live
The operating account onboarding for the foreign-owned entity, VAT registration where required, and the ongoing substance and reporting.
Budget
What it costs
The share capital (CHF 100,000 for an AG or CHF 20,000 for a GmbH) is the subsidiary’s own equity, owned by the parent, not a fee. The cost of building the subsidiary is separate: the structuring and transfer-pricing work, notary and register fees, the resident board and office, and the bank onboarding.
We quote a fixed budget in writing against the structure before any work begins. The value is a subsidiary whose ring-fence and treaty position actually hold, not one that is merely registered.
Ask for a fixed budget
What you need
What a subsidiary requires
A subsidiary that delivers the ring-fence and the treaty access rests on more than a registration:
- an AG or GmbH capitalised adequately for what it will do;
- a Swiss-resident director or officer (Art. 718 / 814 CO);
- a registered office and genuine management activity in Switzerland;
- an arm’s-length, documented basis for dealings with the parent;
- real substance: a board that decides here, not a remote-controlled shell.
The ring-fence is earned, not assumed
Founders form a subsidiary for the liability shield, then undercapitalise it or run it as a pure extension of the parent, and that is how the shield is pierced and the Swiss tax residence is challenged. The separation that protects the parent only holds where the subsidiary is properly capitalised, genuinely governed in Switzerland and dealt with at arm’s length. A substance-light subsidiary is the riskiest of both worlds: the cost of a company without the protection. We build the substance so the ring-fence is real.
Why Goldblum
Subsidiary formation: how we run it
Registering the entity is routine. Capitalising it correctly, governing it in Switzerland, and setting the transfer-pricing and treaty posture: that is the work, and it is what we do for cross-border groups.
Ring-fence
Capital that holds the shield
The subsidiary capitalised and governed so the liability ring-fence is real, not a shell that pierces at the first serious claim.
Substance
Resident board and management
The resident director, office and genuine Swiss decision-making that hold the tax residence and the treaty access where they are tested.
Group-ready
Transfer pricing set early
An arm’s-length, documented basis for dealings with the parent, set at formation rather than reconstructed under a tax audit.
Related
The lighter alternative, and the form it takes
Institutional
AG formation
The CHF 100,000 stock corporation a subsidiary is usually built as: substance, a non-public ownership register, clean governance.
AG formationThe missing piece
Resident director & office
The Swiss-resident director and registered office every subsidiary must have, provided with the substance the role genuinely requires.
Resident director & office
FAQ
Swiss subsidiary: FAQ
01What is a Swiss subsidiary?
A Swiss subsidiary is a separate Swiss company, usually an AG or GmbH, wholly or majority owned by a foreign parent. Unlike a branch, it has its own legal personality, its own capital, its own board and its own accounts. The parent owns the shares but is not, in principle, liable for the subsidiary's debts beyond its investment. It is the form a group uses when it commits to Switzerland and wants the Swiss risk ring-fenced from the rest of the group.
02Subsidiary or branch — which should a foreign company choose?
A subsidiary is a separate Swiss entity: its own capital, ring-fenced liability, stronger local credibility and cleaner access to Switzerland's tax treaties, at the cost of capitalising and governing a full company. A branch is lighter and needs no separate capital, but it is part of the parent, which carries the liability. Choose a subsidiary when the Swiss presence is permanent and the liability must be contained; choose a branch to test the market first. We weigh the two against the group's plans.
03Is the parent liable for the subsidiary's debts?
In principle, no. That is the point of a subsidiary. As a separate legal entity, the subsidiary is liable for its own obligations, and the parent's exposure is limited to the capital it has put in. This ring-fence is the main reason to choose a subsidiary over a branch. It holds where the subsidiary is properly capitalised, genuinely governed and run at arm's length; it can be undermined where the subsidiary is undercapitalised or treated as a mere extension of the parent, which is why substance matters.
04What capital does a Swiss subsidiary need?
The ordinary minimum for the chosen form: 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 subsidiary's own equity, owned by the parent, not a fee. Beyond the legal minimum, the subsidiary should be capitalised adequately for what it will do, because an undercapitalised subsidiary weakens the very liability ring-fence it was formed to create. We size the capital to the activity, not just to the minimum.
05Does a Swiss subsidiary need a resident director?
Yes. Like any Swiss AG or GmbH, a subsidiary must have at least one director or officer resident in Switzerland with signing authority (Article 718 or 814 of the Code of Obligations). For a foreign-owned subsidiary whose board sits abroad, this is usually provided as part of the formation. The resident director is not a formality; they carry real duties, so the appointment has to be a genuine one, which we arrange with the substance the role requires.
06How is a Swiss subsidiary taxed compared with the parent?
A subsidiary is a separate Swiss taxpayer, taxed in Switzerland on its own profit at federal, cantonal and communal rates, independently of the parent. Dealings between the subsidiary and the parent must be at arm's length, and transfer pricing has to be documented and defensible. Dividends paid up to the parent face Swiss withholding tax, reduced or removed under the relevant treaty or the Switzerland–EU agreement. We set the tax and transfer-pricing posture at formation, not after the first audit.
07Can a Swiss subsidiary access Switzerland's tax treaties?
Yes. Being a separate Swiss-resident company is what gives it treaty access, where a branch's position runs through the parent. To rely on a treaty the subsidiary must be genuinely Swiss-resident and have real substance: a resident board that decides, an office and actual activity here, because treaty benefits are increasingly conditional on substance and anti-abuse tests abroad. We build the substance so the treaty position holds up, not just the registration.
08AG or GmbH for a Swiss subsidiary?
Usually an AG. A subsidiary typically wants the CHF 100,000 of substance, a shareholder register that is not public, and the standing the AG carries with banks and counterparties. A GmbH works and costs less to capitalise, which can suit a small, low-risk subsidiary, but it lists its member, the parent, on the public register and signals a smaller operation. We pick the form against the subsidiary's role and how it needs to be read locally.
09Does a Swiss subsidiary need real substance?
Yes, and it is no longer optional. To hold its tax residence, defend the liability ring-fence and access treaties, a subsidiary needs genuine substance in Switzerland: a resident board that actually governs, an office, and real decision-making and activity here, not a registered address with the parent pulling every string from abroad. A substance-light subsidiary is exposed on tax residence and on the corporate veil. We design the substance into the structure from the start.
10Can the foreign parent own 100 percent of the subsidiary?
Yes. A Swiss subsidiary can be wholly owned by a single foreign parent: there is no Swiss-ownership requirement for the shares. The only residence requirement is at board level: at least one representative resident in Switzerland. So the parent keeps full ownership and control of the shares while the subsidiary meets the resident-director rule through the director we provide. This is the standard structure for a group expanding into Switzerland.
11How long does it take to form a Swiss subsidiary?
The incorporation runs in the usual two-to-four-week range for an AG or GmbH: articles, notary, the capital into a blocked account, and the commercial-register entry. For a foreign parent, the variables are the parent's corporate documents and the bank onboarding, both of which should start in parallel. The structuring (capital, substance, transfer pricing) is best settled before incorporation, so the subsidiary is built right rather than corrected later.
Setting up a Swiss subsidiary?
Tell us about the parent and what the subsidiary will do. A partner weighs subsidiary against branch, sizes the capital and substance, provides the resident board, and forms it in full.