GmbH vs AG in Switzerland — which company structure should I choose?

Switzerland offers two primary corporate forms for operating businesses: the GmbH and the AG. Both provide limited liability and are separate taxable entities subject to Gewinnsteuer and Kapitalsteuer. The choice between them is primarily driven by governance flexibility, capital requirements, and whether external investment or equity plans are in the picture.

Key differences at a glance

Minimum capital: GmbH = CHF 20,000 (fully paid up on formation). AG = CHF 100,000 (minimum 50% = CHF 50,000 paid up on formation, balance within 2 years).

Formation cost: GmbH = CHF 1,500–3,000 (notary + register). AG = CHF 2,500–6,000 (notary + register + additional complexity).

Govenance: GmbH has a simpler structure — shareholders manage or appoint Geschäftsführer. AG has a mandatory three-body structure (Generalversammlung, Verwaltungsrat, Revisionsstelle).

Share transferability: GmbH shares (Stammanteile) require shareholder approval for transfer by default (can be made free in articles). AG shares can be freely transferable (registered shares are default; bearer shares now restricted to listed companies).

Employee stock options: AGs are significantly better suited to ESOP structures, conditional capital, convertible instruments, and venture capital investment. GmbHs have limited ESOP tooling.

Privacy: GmbH shareholders (Gesellschafter) are listed publicly in the Handelsregister — anyone can see who owns the GmbH and what their stake is. AG shareholders are NOT publicly listed (the share register is private). For entrepreneurs valuing privacy of ownership, the AG has an advantage.

Audit: Both AG and GmbH with 10+ full-time employees meeting two of three size thresholds require a full ordinary audit. Below thresholds, both can have limited review (eingeschränkte Revision) or opt out entirely (Opting-out) with unanimous shareholder approval.

When to choose a GmbH - Founder-owned business with no plans for external equity investment - Two to three co-founders who want tightly controlled ownership with transfer restrictions - Cost-conscious formation (CHF 20,000 minimum capital versus CHF 100,000) - Service businesses, consultancies, and agencies where large amounts of capital are not needed - Any business where keeping it simple is more important than maximum flexibility

When to choose an AG - Planning to raise venture capital or private equity (investors universally expect an AG) - Issuing employee stock options (ESOPs) — the AG's conditional capital mechanism is the standard vehicle - Many shareholders who want freely tradeable shares - Planning a future stock exchange listing (only AGs can list on the SIX Swiss Exchange) - Owner wants shareholding kept private (Handelsregister does not disclose AG shareholders) - Larger capital requirements where CHF 100,000 share capital is not a meaningful barrier

The 2023 OR reform changes Since 1 January 2023, several changes affect the choice: - AG can now hold virtual Generalversammlungen (no physical meeting required) - AG can pay interim dividends during the year (previously only at year-end AGM) - Both forms relaxed the requirement for at least one Swiss-resident director (now any resident qualifies) - Bearer shares in unlisted AGs are now illegal — if you had an unlisted AG with bearer shares, they must be converted

Tax treatment Both GmbH and AG are subject to identical Gewinnsteuer (corporate income tax) and Kapitalsteuer (capital tax) treatment. There is no tax advantage to one form over the other at the company level. The only tax difference is in Quellensteuer treatment of owner-directors if they are foreign nationals, where the permit type rather than company form drives the obligation.