One of the first topics that entrepreneurs considering establishing a company in Switzerland encounter is “minimum capital.” It’s true: Switzerland progresses through clear capital thresholds during the incorporation phase, alongside world-class banking and institutional trust. However, “capital” is not just a number; it must be considered in conjunction with how it is deposited into a bank account, the registration process, the partnership structure, and even tax planning.
In this article, I will explain the minimum capital requirements according to company types, primarily AG and GmbH, within the framework of the Swiss Code of Obligations (CO), how the capital is blocked, typical costs, and critical points for foreign entrepreneurs step by step.
Why is minimum capital so important in Switzerland?
The minimum capital requirement serves two fundamental purposes in Switzerland: (1) to create a minimum guarantee for creditors and the market, (2) to make the seriousness and financial adequacy of the company visible during the registration phase. Therefore, especially in structures that provide limited liability (AG and GmbH), the capital threshold is clearer and higher compared to sole proprietorships.
In practice, minimum capital acts as a “starting condition” for opening a blocked account, notary documents, and Commercial Register registration. A poorly planned capital structure can extend the incorporation timeline and create a need for additional explanations during banking controls (AML/KYC).
Minimum capital requirements by company type (AG, GmbH, and others)
Summary table: Minimum capital requirements in Switzerland
- AG (Aktiengesellschaft – joint-stock company): Total capital CHF 100,000. At least CHF 50,000 or 20% of the pledged capital (whichever is higher) must be paid at incorporation.
- GmbH (limited company): Total capital CHF 20,000 and must be fully paid at incorporation (no partial payment).
- Sole proprietorship: No minimum capital requirement; unlimited personal liability arises.
- Ordinary/collective/limited partnership structures: No legal minimum capital requirement; liability largely reflects on partners in most models.
- Branch office: No minimum capital requirement; not a separate legal entity, operates through the foreign parent company.
The two structures that foreign investors most frequently compare in Switzerland are AG and GmbH; because both provide limited liability and are considered strong in terms of commercial reputation.
Minimum capital for AG (Joint-Stock Company): CHF 100,000 – how does the payment logic work?
When you want to establish an AG, the total share capital must be at least CHF 100,000. However, you do not need to deposit the entire amount on the first day. The amount to be paid at the incorporation stage is determined as follows:
- At least CHF 50,000 or
- 20% of the pledged capital
In practice, in most incorporation scenarios, this threshold appears as CHF 50,000. The remaining portion may come into play in certain legal situations (e.g., liquidation/bankruptcy scenarios); therefore, instead of adopting the approach of “I’m comfortable, that part doesn’t matter,” it is healthier to include the entire capital in the company’s financial plan.
The AG structure is often preferred for holding structures, scalable business models like fintech, large investment plans, or ventures aiming for future share transfer/corporatization. Additionally, the nominal share values can be reduced to very low levels (e.g., CHF 0.01 nominal value), making it easier to design flexible share structures.
Minimum capital for GmbH (Limited Company): CHF 20,000 – why must it be fully paid?
The minimum capital required to establish a GmbH is CHF 20,000, and this amount must be fully paid at the time of incorporation. The “partial payment” approach is not applied in the GmbH structure in Switzerland. This rule strengthens financial discipline against the market.
The GmbH is often suitable for SMEs, consulting firms, service companies, and structures that initially want more “compact” governance. However, share transfers/partnership changes generally proceed more controlled in most scenarios; that is, shares do not operate as freely transferable as in AG.
Must capital be cash? Are contributions in kind and other contributions possible?
In Switzerland, do not always think of share capital as just cash. For both AG and GmbH, capital can be structured as follows:
- Cash,
- Contributions in kind (equipment, certain assets, some IP rights, etc.),
- Under certain conditions, set-off structures
However, in contributions in kind, valuation/reporting and notary-registration document burdens may increase. Therefore, ventures with speed targets generally proceed with cash capital; they plan asset transfers separately later.
How is capital deposited in the bank? The “Blocked Company Account” process
In Switzerland, you do not deposit the incorporation capital directly into the “company’s regular current account.” First, you open a blocked company account and deposit the capital into this account. The bank issues a deposit/capital confirmation document showing that the capital has been deposited. The notary and Commercial Register application cannot proceed without this document.
At this stage, banks conduct more detailed AML/KYC controls, especially for foreign-sourced funds. Documents proving the source of the funds, group transfer explanations, or investment contracts may be required. It is important to manage the capital transfer and document preparation in parallel to correctly manage the incorporation timeline.
With regulatory changes, it has also become possible to determine capital through CHF or a foreign currency compatible with the currency in which the business is conducted in some structures. Nevertheless, due to bank practices and registration practices, feasibility must be conducted first in every scenario.
Incorporation steps: At what stage does capital come into play?
In the incorporation of AG/GmbH in Switzerland, capital acts as the “key that opens the door” at the beginning of the process, not in the middle. The typical flow is as follows:
- 1) Preparation and notary work: The main contract, partnership structure, and management structure are clarified.
- 2) Opening a blocked account at the bank: The minimum amount to be paid at incorporation for AG (mostly CHF 50,000) and CHF 20,000 for GmbH is deposited.
- 3) Bank confirmation document: Capital investment is confirmed.
- 4) Notary and Commercial Register registration: The application file is completed and registered.
- 5) Post-incorporation operation: The blocked account is released, the company transitions to normal banking order; tax, accounting, payroll, and contracts are organized.
There is also a critical point on the management side: For foreign entrepreneurs, there is generally a requirement for at least one Swiss resident manager/signatory in Switzerland. This is another “must-have” topic in incorporation planning, just like capital.
Incorporation costs: What other expenses arise besides capital?
While minimum capital can be thought of as the company’s operational “fuel,” the incorporation itself also incurs costs. According to typical ranges in research data, you will see the incorporation costs in Switzerland in most scenarios as follows:
- Notary fees: approximately CHF 700–2,000
- Commercial Register and official fees: if the capital is below CHF 200,000, approximately CHF 600
- Total additional incorporation cost: in most setups CHF 2,000–5,000 (excluding capital)
There is another important threshold: As the capital amount grows, additional burdens such as stamp duty may arise in some cases. Therefore, instead of reflex decisions like “I can always increase it later” or “the higher the capital, the better,” it is more rational to scale the capital according to the target market, your risk profile, and the expectations of banks/business partners.
Tax and financial planning: Capital amount is not just a registration requirement
The corporate tax burden in Switzerland varies by canton and can roughly be seen in the 12%–21% range. However, your capital decision at the incorporation stage affects taxes not directly as a “rate”; but often through the financing structure.
- Thin capitalization approach: How much debt and how much equity you fund the company with; the deductibility of intra-group financing and interest expenses becomes important.
- Holding/Group structures: Whether you will make the capital a contribution from the parent company, debt, or a mixed model; this can affect both bank scrutiny and tax efficiency.
The most common mistake at this point is to see the minimum capital as “only a legal threshold.” However, in Switzerland, banks, potential investors, and large customers can also read capital as a “signal of corporateness.”
Practical notes for foreign entrepreneurs: Details that expedite the application
- Investment screening is generally absent: Switzerland is open to foreign investors in many sectors; however, if there is sector-regulation (e.g., finance), higher capital/permit requirements may arise.
- Document the source of funds: The AML processes of banks are the main cause of delays. File the legal and economic justification for the capital transfer.
- Choose the right company type: In terms of SME scale and cost sensitivity, GmbH may provide advantages, while AG may be advantageous in more corporate/flexible partnership structures.
- Plan for the resident manager requirement: The management/signatory structure in Switzerland must be resolved at an early stage.
How does Corpenza make this process more predictable?
The topic of “minimum capital” in company formation in Switzerland becomes complicated when managed alone due to bank compliance, notary-registration documents, management/residency requirements, and the need for international tax-accounting structuring. Getting professional support in this process reduces both time loss and the risk of incorrect structuring.
Corpenza, with a focus on international business development and mobility, helps you shape the end-to-end structure in areas such as choosing the right company type in Switzerland, planning capital investment and bank blocked account process, and post-incorporation accounting and payroll/EOR according to your business goals. Especially for companies operating in multiple countries, addressing capital and financing decisions from a tax and compliance perspective provides a critical advantage.
Conclusion: Minimum capital is a “starting threshold,” but proper planning is a competitive advantage
The minimum capital required for company types offering limited liability in Switzerland is clear: CHF 100,000 for AG (usually at least CHF 50,000 payment at incorporation), CHF 20,000 for GmbH (fully paid at incorporation). However, the right question is not just “how many CHF will I invest?” The right question is: “How can I structure this capital in the fastest and safest way in line with bank compliance and my commercial goals?”
Disclaimer: This content is for general informational purposes; it does not constitute legal, tax, or financial advice. Regulations and practices may vary by canton, sector, and current regulations. We recommend checking current official sources and seeking support from competent professionals before making final decisions.
