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.
The registration process for a subsidiary in Switzerland
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.
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).
Steps in opening a subsidiary
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:
Step-by-step process:
Secure a Swiss legal address:
Can be a physical office or a virtual office;
Required for registration with the Commercial Register.
Draft the Articles of Association:
Defines the company's name, legal form, capital, shareholders, and objectives.
Open a Swiss corporate bank account:
Used to deposit the minimum share capital;
A confirmation of deposit is required for registration.
Register with the Commercial Register:
Submit notarized documents, bank confirmation, and application forms.
Register with the Federal Tax Authority:
Obtain tax identification numbers;
Apply for VAT registration if applicable.
Register employees with Swiss social security authorities:
Mandatory before hiring staff locally.
Apply for special licenses:
Only needed for regulated sectors.
Our Swiss company formation agents can assist at every stage — either directly or via power of attorney, making the process easier for foreign investors.
Company types for subsidiaries:
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.
Documents needed to register a Swiss subsidiary in 2025
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.
Key documents include:
Articles of Association: prepared and signed before a Swiss notary;
Decision of incorporation: formal resolution by the parent company to open a Swiss subsidiary;
Bank confirmation: proof of capital deposit into a Swiss corporate account;
Identification documents: valid IDs or passports of shareholders and directors;
Proof of legal address: lease contract or virtual office service agreement in Switzerland;
UBO declaration: disclosure of the Ultimate Beneficial Owner, required for AML compliance.
Notarization and filing:
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.
Get in touch
Please contact us directly or via email if you require assistance. We are here to help you move forward.
A higher degree of independence from the parent company
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.
Accounting requirements for Swiss subsidiaries
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.
Core accounting obligations:
Must maintain Swiss-compliant financial records;
Annual financial statements must be prepared, including a balance sheet, profit and loss account, and notes;
Subsidiaries must hold an Annual General Meeting (AGM) where financial results are approved;
An annual tax declaration must be filed with Swiss authorities within one month after the AGM.
Audit requirements:
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.
Need to set up a company in Switzerland, take over an existing business, or optimize your taxes? Contact our specialists in company registration and Swiss tax law.
Contact Us
What are the main advantages of the Swiss subsidiary?
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.
Key advantages include:
Legal autonomy:
As a separate legal entity, the subsidiary shields the parent company from legal and financial liability beyond the invested capital;
Credibility:
A registered Swiss subsidiary enhances trust among banks, clients, and business partners due to the country’s global reputation;
Market access:
Operating as a local company simplifies access to Swiss and EU markets through bilateral agreements;
Ownership structure:
100% foreign ownership is permitted, offering full control to the parent company;
Brand protection:
The subsidiary can register trademarks and own IP in its own name under Swiss law;
Staff hiring and payroll:
The entity can hire staff under Swiss labor legislation, gaining access to a highly skilled multilingual workforce;
Banking benefits:
Easier access to Swiss corporate banking services and financial instruments;
Eligible for tax treaties:
The subsidiary benefits from Switzerland’s vast network of double tax treaties, reducing withholding tax burdens.
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.
Taxation of subsidiaries in Switzerland
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.
Tax rates in 2025:
Federal corporate income tax: 8.5% on net profit (approx. 7.83% effective);
Cantonal and municipal taxes: vary by canton, ranging from 11% to 21%;
Total effective tax rate: typically between 12% and 25%, depending on the location.
Other applicable taxes:
Withholding tax: 35% on dividends paid to the foreign parent, often reduced through double taxation treaties;
Capital tax: levied annually by cantons on the net equity of the subsidiary (typically 0.001% to 0.2%);
VAT: Standard rate of 8.1% as of 2025, with reduced rates for some goods and services.
Participation exemption:
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.
Tax optimization:
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.
Establishing a Subsidiary in Switzerland in 2025
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.
What makes 2025 favorable?
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.
Sectors with increased interest in 2025:
Technology and fintech
Green energy and cleantech
Medtech and pharmaceutical services
Trade and logistics
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.
Economy of Switzerland
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.
Economic indicators:
GDP (2024 projection): approx. CHF 850 billion
GDP per capita: among the highest globally (approx. CHF 96,000)
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.
FAQ
CHF 20,000 is required for a GmbH; CHF 100,000 for an AG.
Yes, 100% foreign ownership is allowed.
Typically 7–10 business days, depending on the canton.
Federal, cantonal, and municipal taxes total approx. 12%–25%.
Yes, at least one director must reside in Switzerland.
A registered legal address is mandatory; virtual offices are accepted.
Yes, and a Swiss account is required before registration.
Yes, based on thresholds like CHF 20M assets or 250 employees.
Yes, at the 2025 standard rate of 8.1%, if applicable.
Greater legal independence, limited liability, and better banking access.
Legal disclaimer. This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.