Société à responsabilité limitée / Società a responsibilità limitata / Gesellschaft mit beschränkter Haftung (Limited Liability Company)
Switzerland is widely recognized as a leading global hub for commerce, finance, and investment. Its reputation is built on a combination of political neutrality, legal certainty, and long-standing financial stability. Despite its limited natural resources and relatively modest size, Switzerland has developed a highly sophisticated, export-driven economy. Liberal market policies, transparent governance, and a highly skilled labor force contribute to a strong business environment. Trade policy in Switzerland is outward-looking, characterized by low tariffs and limited non-tariff barriers, aside from targeted agricultural protections. The country’s extensive network of bilateral and multilateral trade agreements, including with the European Union, facilitates access to a broad international market.
Within this regulatory and economic context, the Swiss limited liability company—known as Société à responsabilité limitée (SARL) in French and Gesellschaft mit beschränkter Haftung (GmbH) in German—is one of the most prevalent corporate structures for both domestic and international business. The SARL/GmbH is often chosen for its balanced mix of flexibility and legal formality. It is a separate legal entity with liability limited to the value of its paid-in capital, protecting members’ personal assets from business debts. The statutory minimum share capital is CHF 20,000, which must be fully paid upon incorporation. This relatively modest capital requirement makes it accessible to small and medium-sized enterprises, as well as foreign investors seeking a formal presence in Switzerland.
A Swiss GmbH may be founded by a single shareholder or multiple shareholders, who may be natural or legal persons, and need not be Swiss residents. However, at least one individual authorized to represent the company must reside in Switzerland. The company’s shareholders and management structure are disclosed in the Commercial Register, offering a level of corporate transparency that distinguishes Swiss entities from those in jurisdictions with more opaque systems. Governance of the GmbH may be carried out either directly by shareholders or by appointed managers. The company is required to maintain proper books and financial records, in accordance with Swiss accounting standards.
Switzerland’s tax framework applies at three levels—federal, cantonal, and municipal. While nominal rates vary by canton, recent tax reforms have aligned effective corporate tax rates more closely across the country, generally ranging from 12% to 18%. Companies engaged in qualifying activities, such as innovation, R&D, or management of intellectual property, may benefit from tax relief under preferential regimes. Although the Swiss regulatory regime is comprehensive, it is designed to be efficient and predictable, and compliance procedures are relatively straightforward for most small and mid-sized companies.
The formation of a GmbH follows a formal legal process. The incorporation begins with the drafting of articles of association and a notarized deed of incorporation. The founding shareholders must deposit the required share capital into a dedicated escrow account with a Swiss bank. After notarization, the documents are submitted to the competent cantonal Commercial Register for approval and publication. Depending on the canton and the complexity of the company’s structure, the registration process typically takes between two to four weeks. Once registered, the company receives a unique business identification number and may proceed with registering for VAT, opening operational bank accounts, and fulfilling any sector-specific licensing requirements.
Beyond incorporation, ongoing compliance involves the filing of annual financial statements, corporate tax returns, and, if applicable, VAT filings. Companies exceeding certain thresholds must also undergo statutory audits. Shareholders’ meetings must be held annually, and corporate records must be maintained and accessible. The regulatory environment is tailored to balance accountability with operational flexibility, making the GmbH suitable for a variety of commercial and holding purposes, both domestically and internationally.
From a tax perspective, corporate taxation in Switzerland operates on three levels: federal, cantonal, and communal. While the federal corporate income tax rate is uniform at 8.5% on profit after tax (equivalent to about 7.83% on profit before tax), cantonal and municipal rates vary significantly. This variation results in differing overall effective tax burdens depending on where a company is domiciled. In recent years, cantonal tax reforms following the Federal Act on Tax Reform and AHV Financing (TRAF), effective from 2020, have led to a general downward alignment of cantonal corporate tax rates to maintain Switzerland’s competitiveness within Europe.
Cantons such as Zug and Lucerne are often noted for having among the lowest effective corporate tax rates, typically ranging from 11.8% to 12.3%, depending on the specific municipality. These cantons attract many holding and operational companies due to their low tax environment and established administrative infrastructure. In contrast, larger cantons such as Zurich and Geneva have moderately higher rates, averaging around 18% to 19%. However, these cantons also offer well-developed service sectors, access to major international labor markets, and administrative efficiency, which may be favorable for companies with significant operational needs.
The choice of canton may also influence eligibility for tax incentives. Some cantons offer preferential regimes for companies engaged in research and development, high-value manufacturing, or intellectual property activities, often through patent box regimes or deductions for qualifying expenditures. Additionally, newly incorporated companies may benefit from transitional tax relief or negotiated tax rulings, particularly in cantons actively encouraging business relocation or expansion. Accordingly, while headline tax rates are an important factor, considerations such as operational needs, industry focus, infrastructure, and regulatory environment also weigh heavily in selecting a suitable canton for incorporation.
In summary, the Swiss GmbH structure offers legal certainty, limited liability, and access to a highly developed business infrastructure. It remains a reliable vehicle for entrepreneurs and established businesses alike, particularly those seeking to engage in cross-border trade or regional headquarters operations from within Switzerland’s stable and rules-based jurisdiction.
Legal *
Country code – CH
Legal Basis – Civil law (Swiss)
Legal framework – Swiss Code of Obligations
Company form – Limited Liability Company (Société à responsabilité limitée, Società a responsibilità limitata, Sarl / Gesellschaft mit beschränkter Haftung, GmbH)
Liability - The liability of quota holders is limited to the extent of their quotas.
Share capital – The minimum capital of a Sarl/GmbH is CHF 20,000. Upon incorporation (or a subsequent capital increase), 20% of the capital or CH 20,000, whichever is higher, must be fully paid up. Capital contributions may be made in cash or in kind.
The capital of a Sarl/GmbH is divided into quotas with a nominal value of at least CHF 100. The quotas are not negotiable and cannot be listed on a stock exchange.
Quotaholders – A Sarl/GmbH may be incorporated by one or several natural persons or legal entities, residents or non-residents, acting as incorporators and initial quota holders. The quota holders are registered in the Commercial Register, which is open to the public.
Managing Officers – All quota holders are entitled and obligated to collectively manage and represent the Sarl/GmbH. Such functions may, however, be delegated to one or more quota holders or to third parties in accordance with the Sarl/GmbH’s articles of incorporation. At least one managing officer authorized to act for and validly bind the Sarl/GmbH’s must reside in Switzerland.
Secretary – The company may appoint a secretary, but it is not mandatory.
Registered Address – A company must have a registered office in Switzerland.
General Meeting – Sarl/GmbH’s quota holders should have an annual meeting within 6 months from its financial year-end.
Electronic Signature – Permitted.
Re-domiciliation – Inward/outward re-domiciliation is not allowed.
Compliance – A Swiss company must maintain accounting records in Switzerland. Companies are required to submit a tax return together with financial statements to the relevant Cantonal Tax Authority together with the financial statements of the company for the financial year. The financial year is generally the calendar year.
The tax filing deadline varies depending on the Canton but is from 6 to 9 months for FYE. For instance, in Zurich, the tax filing deadline is 9 months from FYE (30 September). Tax is paid upon receipt of the tax assessment by the relevant Cantonal Tax Authority.
Appointment of an auditor and file audited financial statements is compulsory for all companies. An audit exemption may be available if 2 of the following 3 criteria are met: Balance sheet assets less than CHF 10million; Annual turnover less than CHF 20million; Average number of employees less than 50.
- Members not disclosed *
- Members not disclosed *
- Corporate members permitted * *
- Corporate manager permitted * *
- Local manager required * *
- Registered office or agent required * *
- Annual meeting required * *
- Redomiciliation permitted * *
- Electronic signature * *
- Annual return * *
- Audited accounts * *
- Audited accounts exemption * *
- Exchange controls * *
- Civil law (Swiss) Legal basis *
- 1 Minimum members *
- CHF 20,000 Minimum registered capital *
- CHF 20,000 Minimum paid up capital *
- CHF Capital currency *
- 100% Foreign-ownership allowed *
- 2018 AEOI *
Taxes *
Tax residency – Companies with their registered office in Switzerland or its place of effective management in Switzerland are deemed to be residents for tax purposes.
Basis – Corporate income tax is levied on worldwide profits. However, profits derived from foreign branches or permanent establishments, foreign real properties and profits undistributed by foreign subsidiaries may not be subject to taxation.
Corporate Tax rate – Corporate income tax is imposed at both federal, communal and cantonal levels.
The Federal effective tax rate is 7.83% (8.3% but tax paid is deductible for tax purposes, leaving an effective tax rate of around 7.83%).
Each canton and commune has its own tax legislation and levies cantonal and communal income and capital taxes at different rates.
In the Canton and commune of Zurich the combined corporate tax rate is 19.7%. When it comes to canton capitals, the lowest tax rates can be found in the city of Zug (11.8% corporate tax, 0.07% capital tax), and in the city of Luzern (12.1% corporate tax, 0.18% capital tax).
Capital Tax - Capital taxes are levied by the cantons and communes only on the equity of companies - nominal capital, paid in surplus, retained earnings, and other equity reserves.
Capital gains – At the federal level, capital gains are treated as ordinary income and taxed at the standard rate.
A participation relief is available, whether from the disposal of shares of resident or nonresident when shares have been held for at least 1 year and constitutes 10% of the share capital or the participation has a value of CHF 1,000,000.
Such participation relief is available for federal, cantonal and communal taxes.
Dividends – Dividends received are usually taxable but a participation relief may apply (tax abatement)
Participation relief may be granted if the recipient holds at least 10% of the share capital or 10% of profits and reserves of the underlying subsidiary or the residual participation’s market value at the beginning of the year amounted to at least CHF 1,000,000.
Such participation relief is available for federal, cantonal and communal taxes.
Interests – Interests are subject to corporate income tax.
Royalties – Royalties are generally taxable at both federal, communal and cantonal levels. However, some cantons have introduced a patent box regime, where royalties may be tax-exempt or taxed at reduced rates.
Foreign-source income – Foreign-source income is taxable at at federal, cantonal and communal levels. However, profits derived from foreign branches or permanent establishments, foreign real properties as well as undistributed profits held in local and foreign subsidiaries may not be subject to taxation.
Withholding tax paid to treaty countries may be creditable, taxes paid on non-treaty countries may not be creditable but may be deductible.
Withholding taxes – Dividends paid to non-residents are subject to withholding tax at a 35% tax rate.
Under the EU-Switzerland savings agreement, dividends paid to EU residents may be exempt from withholding tax if the capital participation is at least 25% and other criteria are met.
Withholding tax rates may be reduced due to a tax treaty.
Interests and royalties are not subject to withholding tax. However, interests derived from deposits with Swiss banks, bonds, and bond-like loans may be subject to a 35% withholding tax, which can be reduced to payments to treaty-countries.
Losses – Losses arising from taxable income may be carried forward for 7 years. Carryback of losses is not allowed.
Inventory - Inventory may be valued at the lower of acquisition/production costs or market value. To determine costs are allowed First in first out (FIFO), Last in first out (LIFO), Highest in first out (HIFO) methods.
Anti-avoidance rules – Switzerland has not formally introduced transfer pricing regulations or documentation requirements, but transactions must be carried out on arm’s length terms.
Thin capitalization rules apply, requiring a minimum equity ratio for each asset class
Switzerland has not enacted controlled foreign company regulations, hence undistributed income from foreign subsidiaries may not be taxable.
Labor taxes – Employers and employees are required to make a contribution to several social security insurance funds. If an employee is subject to the Swiss Security, both the employer and employee have to contribute a total of 8.02%-23.35% and 12.23%-15.23%, respectively. Each contribution may be capped to certain amounts.
Tax credits and incentives – Withholding tax paid to treaty countries may be creditable, taxes paid on non-treaty countries may not be creditable but may be deductible.
A patent box on income from qualifying patents is available for cantonal and communal taxes. A maximum of 90% tax exemption may apply to the proportion of income from patents and similar rights to the extent it is based on qualifying R&D expenses in Switzerland.
Compliance – On average, a company in Switzerland may require 19 payments and 63 hours per year to prepare, file and pay corporate income tax, value-added tax, and labor taxes, including payroll taxes and social contributions.
Personal income tax – An individual is deemed to be tax resident in Switzerland, if he or she is domiciled in Switzerland, or is physically present in Switzerland for at least 30 days to carry out a professional activity or is physically present in Switzerland for 90 days.
Resident individuals are taxed on a worldwide basis, while non-residents pay taxes on income accrued within the borders of Switzerland.
The federal tax rate is progressive at rates ranging from 0% to 11.5%. Cantonal and communal taxes also apply. Top marginal effective tax rates are between 25% to 51% depending on the canton and commune.
Capital gains on movable assets are tax-exempt, provided that taxpayer is not a professional securities dealer. Capital gains on immovable assets are subject to cantonal capital gains tax, with rates that vary depending on the canton and holding period.
Dividend, rental and interest income are usually taxed at applicable personal income tax rates.
Other taxes – The sale and import of goods and services are subject to V.A.T. at a standard rate of 8.1%. Reduced rates and exemptions may apply.
A stamp tax is levied on the transfer of securities, tax rate is 0.15% if security is issued by a Swiss tax resident and 0.3% if is issued by nonresident.
A capital duty of 1% is levied on the issuance and increase of the equity of Swiss corporations. However, the first CHF 1,000,000 of capital is exempt from capital duty.
Several cantons and communes levy real estate property and transfer taxes. They also levy net wealth taxes at progressive rates up from 0% to 1.3% (4.5% in the case of Geneva).
- Tax transparent entity * *
- Offshore Income Tax Exemption * *
- Offshore capital gains tax exemption * *
- Offshore dividends tax exemption * *
- CFC Rules * *
- Thin Capitalisation Rules * *
- Patent Box * *
- Tax Incentives & Credits * *
- Property Tax * *
- Wealth tax * *
- Estate inheritance tax * *
- Transfer tax * *
- Capital duties * *
- 11.8% Offshore Income Tax Rate *
- 11.8% Corporate Tax Rate *
- 7.83% Capital Gains Tax Rate *
- 0% Dividends Received *
- 35% Dividends Withholding Tax Rate *
- 35% Interests Withholding Tax Rate *
- 0% Royalties Withholding Tax Rate *
- 0 Losses carryback (years) *
- 7 Losses carryforward (years) *
- FIFOAverage costLIFO Inventory methods permitted *
- 63 Tax time (hours) *
- 19 Tax payments per year *
- 5.13% Social Security Employee *
- 5.13% Social Security Employer *
- 39% Personal Income Tax Rate *
- 8.1% VAT Rate *
- 109 Tax Treaties *
Country details *
The Swiss Confederation is a landlocked country located in Central Europe and member of the EFTA. It borders to the north with Germany, to the west with France, to the south with Italy and to the east with Austria and Liechtenstein. Switzerland is a confederate republic of 26 states, called cantons.
Bern is the seat of the federal authorities, while the country’s financial centers are located in the cities of Zurich, Basel, Geneva, and Lugano. It is inhabited by more than 8 million people. Switzerland is one of the most culturally diverse European countries, home to a larger number of immigrants. It is also multilingual confederation with four official languages: German, French, Italian and Romansh. Its official currency is the Swiss Franc (CHF).
Swiss citizens are subject to three legal jurisdictions: the commune, the canton, and the confederation. The Swiss Confederation consists of 26 cantons
There are three main governing bodies at the federal level: the bicameral parliament, the Federal Council and the Swiss Federal Supreme Court. The function of the Federal Supreme Court is to hear appeals against the cantonal or federal courts. Judges or magistrates are elected by the Federal Assembly for a period of six years.
The Swiss Parliament consists of two chambers: the Council of States, which has 46 representatives (two from each canton and one from each half-canton), who are elected by each canton under its own system; And the National Council, which consists of 200 members elected through a system of proportional representation, depending on the population of each canton. The members of the two chambers are elected every four years.
The Federal Council constitutes the federal government, directs the Federal Administration and acts as head of state.
Despite its lack of natural resources, Switzerland is one of the most stable, developed and prosperous countries worldwide, with a highly skilled labor force, and home to some of the most important multinational corporations. Its GDP per capita is the second highest in Europe, only surpassed by Luxembourg, and the ninth worldwide.
Its most important economic activities in Switzerland are the chemical industry, medical technology, the pharmaceutical industry, the manufacture of musical and measuring instruments, real estate, financial services, and tourism. The country’s main exports are medicaments, glycosides and vaccines, watches, orthopedic appliances, precious jewelry, chemicals, and electronic machinery, which are renowned for their quality and innovation, ranking the first country in the Global Innovation Index (2016). Switzerland is also a large exporter of arms, ammunition and small calibers. And also known for its cheese, wine and chocolate and a mountain tourist destination.
Switzerland is also one of the largest financial centers worldwide. Swiss banks offer a wide range of offshore banking services to corporations and individuals. Historically, its policy of neutrality, without participating in any international conflict, its political and economic stability and its banking secrecy guaranteed by law, attracted foreign capital into Swiss banks. Currently, Switzerland still is one of the global leaders in Asset Management worldwide.