Setting up a GmbH in Switzerland: Costs, Capital and Process Explained

The GmbH (limited liability company) is one of the most popular legal forms for Swiss SMEs. It provides a clear separation between the individual and the company, generally limits the personal liability of its shareholders and can be established by just one person.

But what do you actually need to set up a GmbH? What does the required CHF 20,000 share capital mean? What additional costs should you expect? And what needs to be done after registration in the Commercial Register?

In brief

To establish a GmbH in Switzerland, you need minimum share capital of CHF 20,000. The capital must be fully paid in or covered by permissible contributions in kind. The incorporation must be publicly notarised, and the GmbH legally comes into existence upon registration in the Commercial Register.

However, registration is only part of the process. Depending on the situation, the next steps may include:

• Registration with the AHV/OASI compensation office
• Taking out the required social insurance
• Setting up the accounting system
• Checking VAT liability
• Organising payroll and occupational pension arrangements

A well-planned incorporation therefore considers not only the Commercial Register entry, but also the company’s ongoing administration from the outset.

1. How much capital does a GmbH require?

The statutory minimum share capital is CHF 20,000 and must be fully paid in when the company is established. A GmbH may be founded by one or more individuals or legal entities.

For a cash incorporation, the share capital is usually first deposited into a capital contribution account with a bank. The bank then issues confirmation of the deposited capital for the incorporation process.

Once the GmbH has been registered, the capital can be transferred to the company’s business account.

Is the CHF 20,000 blocked afterwards?

No.

This is a common misunderstanding. The CHF 20,000 is share capital of the company, not simply an incorporation fee.

Once the company has been established, the GmbH can generally use this money for its business activities – for example, operating expenses, rent, inventory, marketing or other business costs.

However, the money then belongs to the GmbH and is no longer the shareholder’s private money.

2. What additional incorporation costs are there?

The share capital should not be confused with the actual costs of establishing the company.

Additional costs may arise in particular for:

• Advice and preparation of the incorporation
• Preparation or review of incorporation documents
• Public notarisation
• Commercial Register registration
• Bank and capital contribution account
• Additional legal or administrative services where required

The Swiss SME Portal provides indicative figures including CHF 600 to CHF 2,000 for advice, CHF 700 to CHF 2,000 for notarial services and generally CHF 600 for the Commercial Register entry for share capital of up to CHF 200,000.

Actual costs vary depending on the canton and complexity of the incorporation.

The CHF 20,000 share capital is separate from these costs, although it remains an asset of the newly established GmbH.

3. The GmbH incorporation process

Step 1: Define the fundamentals

First, the main elements of the company should be determined:

• Company name
• Registered office
• Corporate purpose
• Shareholders
• Amount and allocation of share capital
• Management
• Signing authorities

The company name can generally be chosen freely but must include the designation “GmbH” and be sufficiently distinguishable from existing registered company names.

Step 2: Pay in the share capital

For a cash incorporation, a capital contribution account is opened with a bank and the agreed share capital is deposited.

For the statutory minimum capitalisation, this means:

CHF 20,000

The bank subsequently issues the required confirmation of the capital contribution.

Step 3: Prepare the articles of association and incorporation documents

The articles of association form the legal basis of the GmbH. Among other things, they contain information about the company name, registered office, corporate purpose, share capital and ownership interests.

The articles of association of a GmbH must be publicly notarised.

Particularly where several shareholders are involved, responsibilities, ownership interests and other important matters should be clarified carefully before incorporation.

Step 4: Public notarisation

The incorporation itself requires public notarisation.

This formally records the establishment of the company and its articles of association.

Step 5: Registration in the Commercial Register

The incorporation documents are then submitted to the competent Commercial Register office.

An important point:

The GmbH only becomes a legal entity upon its entry in the Commercial Register.

Once registration has been completed, the share capital held in the capital contribution account can be transferred to the company’s business account.

4. Do not forget AHV/OASI and social insurance

Establishing a GmbH also changes the social insurance situation of its owners.

If you work for your own GmbH and receive a salary, you are generally regarded as an employee of your company for social insurance purposes.

The founders working for the company therefore need to consider registration with the relevant AHV/OASI compensation office and the required insurance arrangements.

Depending on the circumstances, these may include:

AHV/OASI, IV/DI, EO/APG and ALV/UI
Accident insurance (UVG/LAA)
Occupational pension provision (BVG/LPP), if the applicable requirements are met

Owners working for their GmbH should therefore determine early on how much salary they intend to receive.

5. Accounting from the first financial year

A GmbH is a separate legal entity and is subject to statutory bookkeeping and financial reporting requirements.

The following should therefore be organised properly from the beginning:

• Business account and payments
• Accounts receivable and payable
• Document and receipt management
• Payroll accounting
• Annual financial statements
• Corporate tax return
• VAT accounting, where applicable

Waiting several months after incorporation to organise the accounting often creates unnecessary additional work.

6. When does a GmbH become liable for VAT?

A GmbH does not automatically become liable for VAT simply because of its legal form.

For ordinary businesses, the relevant turnover threshold is generally CHF 100,000 from supplies that are relevant for determining VAT liability.

If it is already foreseeable when business activities commence that the statutory threshold will be reached, VAT liability should be assessed accordingly. Voluntary VAT registration may also be possible under certain circumstances.

It therefore makes sense to realistically estimate expected turnover when planning the new company.

7. What does limited liability actually mean?

One of the main reasons for choosing a GmbH is the separation between the company and the individual.

The GmbH is a separate legal entity and is generally liable for its obligations with its own company assets. Since the share capital must be fully paid in, shareholders are generally not personally liable for the company’s debts.

However, additional obligations under the articles of association or personal liability in specific circumstances may still apply.

This is an important distinction compared with a sole proprietorship.

Nevertheless, the term “limited liability” should not be understood as a free pass. Managing directors and other governing bodies must continue to fulfil their legal duties with due care.

8. What should be clarified before incorporation?

Good preparation for a GmbH starts before the notarial appointment.

Several questions should already have been answered:

How will the business be financed?
CHF 20,000 meets the statutory minimum capital requirement, but it does not necessarily represent the amount of liquidity the business actually needs.

How much salary should the owners receive?
Salary affects social insurance, pension provision, company profit and personal taxation.

Does the company need to register for VAT?
This should be assessed based on the expected business model and turnover.

How will the accounting be organised?
A clear solution from day one avoids unnecessary administrative work later.

Who may sign on behalf of the GmbH?
Management responsibilities and signing authorities should be defined appropriately during the incorporation process.

Common mistakes when setting up a GmbH

Many problems do not arise during the notarisation itself, but afterwards.

Common examples include:

• Confusing the CHF 20,000 share capital with the company’s actual liquidity requirements
• Registering for social insurance too late
• Failing to properly plan the owners’ salaries
• Not checking VAT liability in time
• Mixing private and business expenses
• Setting up accounting only months after incorporation
• Failing to clearly define responsibilities between several shareholders

A GmbH can be established relatively quickly. The more important question is whether the company is properly organised from the beginning.

Conclusion

Establishing a GmbH in Switzerland requires at least CHF 20,000 in share capital, public notarisation and registration in the Commercial Register. At that point, the company legally exists – but the administrative work has only just begun.

AHV/OASI, insurance, payroll, accounting, taxes and, where applicable, VAT should therefore be considered during the incorporation phase rather than afterwards.

Those who structure these matters early create a solid foundation for their company and can focus more effectively on the actual business once the GmbH has been established.