The Share Capital in Switzerland

Starting a business in Switzerland involves navigating several legal and financial aspects, one of the most important being the determination of the share capital. This is the amount of capital required to demonstrate the financial commitment of the company's participants and may or may not be mandated by Swiss Company Law, depending on the entity type.

Switzerland offers a variety of business structures, with different companies in Switzerland adhering to specific capital requirements to ensure a sound financial foundation for operations.

Below are the primary legal forms of companies in Switzerland and their respective share capital requirements:

These capital requirements are established by the Swiss Code of Obligations and must be respected during incorporation. While these are the minimum amounts, companies can choose to start with higher capital if desired.

Our local Swiss company formation agents offer full support, including registration procedures and accounting services, to ensure a smooth incorporation experience.

Among the most common legal entities used in Switzerland are the public limited company (AG) and the private limited liability company (GmbH). Each of these structures is subject to specific rules regarding minimum share capital, which is a critical component of the incorporation process.

These amounts must be deposited into a blocked corporate bank account before the company is registered.

Before finalizing the incorporation of a company, the required share capital must be deposited into a blocked corporate bank account, where it remains until the company is officially registered. Companies with significant transactions or larger capital needs may also utilize escrow account and services, which provide secure handling of funds until both parties fulfill their contractual obligations, particularly in high-value mergers and acquisitions.

Under the Swiss Code of Obligations, companies may increase their capital by means of:

• Ordinary capital increase (approved during the general meeting);
• Authorised capital (approved in advance by shareholders and executed by the board);
• Conditional capital (used in the case of convertible bonds or employee shares).

All types of capital increases require formal shareholder approval and must be registered with the Swiss Commercial Register.

It is important to note that shareholders of AGs carry limited liability, and their primary risk is the potential loss of the invested capital in case of bankruptcy. Despite the higher cost of formation, the AG remains a preferred structure for businesses seeking credibility, liability protection, and flexibility.

The share capital of a Swiss company represents the initial financial contribution made by its shareholders or founding members. This capital serves multiple legal and economic purposes, both at the time of incorporation and throughout the company’s lifecycle.

However, in the event of business failure or dissolution, company liquidation in Switzerland comes into play. This process ensures that any remaining assets from the share capital are distributed to shareholders after settling outstanding liabilities, and the company is formally deregistered from the Swiss Commercial Register.

Additionally, the declared capital may influence the company’s tax obligations, especially in the case of capital taxes at the cantonal level.

Once deposited in a blocked corporate bank account, the share capital becomes available for operational use after the company is officially registered. Our experts assist clients in coordinating capital payments, banking procedures, and regulatory filings.

In Switzerland, companies can issue different types of shares depending on their legal form and corporate strategy. These shares define the rights and responsibilities of the shareholders and are regulated by the Swiss Code of Obligations.

One of the unique aspects of Swiss business practices is the country's longstanding tradition of bank secrecy in Switzerland. Swiss banks offer a high level of confidentiality for businesses, particularly for those holding bearer shares or other types of non-publicly disclosed shares, ensuring that sensitive financial information remains protected.

Companies may issue different classes of shares to separate control and profit rights. All share types must be properly documented and disclosed during company registration and any future capital changes.

Our legal and corporate experts advise clients on selecting the most appropriate share types for their organizational needs and ensuring compliance with current legislation.