How to Open a Subsidiary in Switzerland in 2025: Full Guide for Foreign Companies

Foreign businesses entering the Swiss market often choose between opening a branch or establishing a subsidiary. While both legal forms serve different strategic purposes, the subsidiary structure provides greater operational independence and legal separation from the parent company.

Key characteristics of a Swiss subsidiary:

• May be established as a GmbH (limited liability company) or an AG (stock corporation);
• Enjoys the same rights and obligations as local companies in Switzerland;
• Operates as an independent legal entity, meaning the parent company has limited liability for its obligations;
• May conduct both the same and different business activities as the parent company;
• May acquire and own assets, including real estate in Switzerland;
• Must hold a Swiss corporate bank account.

Due to the attractive cantonal tax regimes, many foreign investors prefer the subsidiary model over branches. Most subsidiaries are set up as GmbHs, thanks to the relatively low minimum capital requirement of CHF 20,000, compared to CHF 100,000 for AGs.

Furthermore, the parent company may act as the sole shareholder, which is a significant advantage. A local registered office address is mandatory for establishing a subsidiary.

If you’re planning to expand your business operations in 2025, our Swiss company formation experts can guide you in selecting the most efficient legal structure based on your goals and sector.

If you plan to open a subsidiary in Switzerland in 2025, it's important to understand the legal and procedural framework involved. The Swiss Commercial Register is the competent authority for business incorporation, and registration here is mandatory.

Unlike a branch, a subsidiary is formed as a separate legal entity, most often under the form of a GmbH (SARL) or AG (SA), depending on the corporate structure of the foreign parent company.

No special business license is required to register a subsidiary for general commercial activities. However, authorization may be needed for certain regulated industries such as:

• Banking and insurance;
• Telecommunications and broadcasting;
• Pharmaceutical production and distribution;
• Investment services.

The choice between a private or public legal form (GmbH or AG) depends on the parent company’s internal organization, liability concerns, and financing needs. Our Swiss company registration consultants can advise which form best aligns with your goals. Certain individuals, such as those receiving social assistance, may qualify for an exemption from the Serafe Fees.

The registration process requires the drafting and notarization of incorporation documents and submission to the registry, followed by VAT and social insurance registration (if applicable).

Opening a subsidiary in Switzerland involves several key steps. With proper planning and assistance, the process can be completed efficiently. Here is a typical outline:

Our Swiss company formation agents can assist at every stage — either directly or via power of attorney, making the process easier for foreign investors.

• GmbH: Requires minimum CHF 20,000 capital, at least two shareholders, and one Swiss-resident director.

• AG: Requires minimum CHF 100,000 capital (50% paid at incorporation), and at least one Swiss-resident director.

We support both legal forms and provide representation services, if needed, for a smooth registration experience.

When incorporating a Swiss subsidiary in 2025, the parent company must prepare and submit a set of required documents to the Commercial Register. These documents must comply with Swiss legal and notarial standards.

• The notary certifies personal and corporate signatures on the incorporation forms;
• Documents must be submitted to the cantonal Commercial Registry;
• After successful registration, a company registration certificate is issued.

Additional steps post-registration:

• Stamp tax payment: processed via a local post office or bank;
• VAT registration, if applicable;
• Social insurance registration for employees.

Thanks to Switzerland’s extensive double tax treaty network, subsidiaries benefit from minimized or fully exempted withholding taxes on cross-border payments.

Our consultants assist in the preparation, translation (if needed), and submission of all incorporation documents, ensuring swift and compliant registration.

One of the defining advantages of a Swiss subsidiary is its legal and operational independence from the foreign parent company. Unlike branches, subsidiaries are separate legal entities, meaning that:

• The parent company has limited liability, only to the extent of the capital invested;
• The subsidiary can act on its own behalf in contracts, employment, and operations;
• It must maintain independent accounting and financial reporting;
• It may operate under a different trade name than the parent company.

Although the parent company retains ownership and can influence the strategic direction, daily operations are managed locally through the appointed Swiss-based directors. This structure ensures better adaptability to local market conditions and legal frameworks.

Swiss law permits 100% foreign ownership, and it is common for the subsidiary to have no local shareholders apart from the requirement to appoint at least one Swiss-resident director.

Such independence enhances credibility with Swiss banks, clients, and regulatory authorities. It also allows the subsidiary to:

• Open contracts independently;
• Hire staff under Swiss labor law;
• Benefit from domestic legal protections and commercial advantages.

For companies seeking both control and flexibility, the Swiss subsidiary offers the best of both worlds.

A Swiss subsidiary, being a legally independent entity, is subject to the same accounting obligations as any domestic Swiss company. These rules are defined in the Swiss Code of Obligations and overseen by local tax and regulatory authorities.

Audit obligations depend on the size and structure of the company:

1. A limited audit is required if the company employs 10 or more full-time staff;

2. An ordinary audit applies if two of the following thresholds are met in two consecutive years:

• Total assets exceed CHF 20 million;
• Turnover exceeds CHF 40 million;
• More than 250 employees.

Companies below the threshold may request an audit exemption if all shareholders agree.

Our licensed accountants in Switzerland offer full bookkeeping, payroll, and year-end compliance services tailored to subsidiaries, ensuring accurate and timely submissions.

Establishing a subsidiary in Switzerland offers multiple strategic and operational benefits for foreign companies. Due to its independent legal status, a subsidiary can operate with full flexibility while also benefiting from Switzerland’s business-friendly environment.

Additionally, subsidiaries may qualify for cantonal tax incentives, especially when operating in priority sectors like innovation, green energy, or life sciences.

Our team offers strategic planning and full operational support, ensuring your Swiss subsidiary is positioned to take advantage of every benefit.

In Switzerland, subsidiaries are taxed as independent resident companies. They are subject to the same corporate tax structure as any locally owned firm, regardless of foreign ownership. The Swiss tax system is divided into three levels: federal, cantonal, and municipal.

Swiss subsidiaries can benefit from participation exemptions if they hold substantial shares (at least 10%) in other companies. This allows for reduced taxation on dividends and capital gains.

• Switzerland offers tax rulings and advance agreements with cantonal authorities;
• Some cantons provide incentives for innovation-based subsidiaries and holding structures;
• Losses may be carried forward for up to 7 years.

Our Swiss tax advisors provide in-depth planning and compliance services, ensuring optimal tax positioning and treaty utilization for your subsidiary.

As Switzerland remains one of Europe’s most robust and attractive business jurisdictions, more companies are expected to open subsidiaries in Switzerland in 2025. Regulatory updates have simplified certain procedures, making this year particularly advantageous for foreign investors.

• Switzerland has improved digital submission platforms for Commercial Register applications;

• Processing times for incorporation have been reduced in most cantons (average 7–10 business days);

• Updates to international tax treaties have strengthened treaty benefits for holding and service companies;

• Increased clarity on economic substance rules allows for better structuring of subsidiaries for international compliance.

As part of these improvements, more cantons now offer remote incorporation options, allowing foreign owners to register subsidiaries via power of attorney without being physically present.

Our team keeps track of the regulatory landscape across cantons and can recommend the most tax-efficient and operationally favorable location for your Swiss entity in 2025.

Switzerland boasts one of the world’s most stable and prosperous economies, supported by a skilled workforce, innovation, and a well-functioning legal and political system. This environment creates ideal conditions for both local startups and multinational subsidiaries.

• Finance and banking: Global financial hub with robust regulation
• Pharmaceuticals and life sciences: Home to Roche, Novartis, and dozens of medtech startups
• Precision manufacturing: Watches, instruments, industrial components
• Information technology and R&D: Innovation-driven policies and university-industry collaboration
• Green technologies: Rapidly growing cleantech sector supported by public investment

Switzerland’s strong network of free trade agreements, low public debt, and focus on fiscal discipline make it one of the safest and most attractive destinations for foreign direct investment.

For foreign companies looking to enter or expand in Europe, Switzerland offers:

• Exceptional business continuity and legal predictability;
• Access to a highly qualified and multilingual labor force;
• High quality of life that supports long-term relocation and hiring;
• Proximity to EU markets without being an EU member.

Our consultants help investors align their operations with Switzerland’s dynamic economy, maximizing both commercial success and strategic growth.