Foreign investors and entrepreneurs planning to establish a company in Switzerland should first be aware of the minimum capital requirements that vary depending on the type of company they choose. The capital amount is not just a figure seen in the commercial register; it directly affects both your legal liability and your credibility with investors and banks.
Why is Minimum Capital Important in Switzerland?
Switzerland is one of the most attractive locations in Europe due to its ease of doing business, political stability, and relatively low corporate tax rates. However, to benefit from these advantages, the company to be established must have a capital structure that complies with the Swiss Code of Obligations.
Through minimum capital requirements, Switzerland aims to achieve the following:
- Ensure that companies have sufficient initial financing,
- Provide a certain level of protection for creditors,
- Maintain financial stability and reliability in the market.
Therefore, especially in capital companies such as AG and GmbH, it is mandatory to deposit and document the capital in a blocked bank account before establishment.
Main Types of Companies in Switzerland and Minimum Capital Requirements
1. Public Limited Company (AG / SA – Aktiengesellschaft / Société Anonyme)
The public limited company is the most preferred form for large-scale investments, international operations, and structures suitable for attracting investors in Switzerland.
Minimum capital rules:
- Total minimum capital: 100,000 CHF
- Mandatory amount to be paid at establishment:
- At least 50,000 CHF or
- At least 20% of the total subscribed capital
- (The higher amount must be paid.)
- The unpaid portion must be completed no later than during the company’s liquidation or bankruptcy.
Important points regarding the share structure:
- The nominal value of shares can be at least 0.01 CHF.
- Capital can be provided in cash, in-kind contributions (e.g., machinery, equipment, intellectual property), or offset.
This structure is particularly preferred in areas such as holding companies, group company centers, fintech, and high-capital industrial investments. Companies aiming to attract international investors or planning to go public in the future mostly choose the AG form.
2. Limited Liability Company (GmbH – Gesellschaft mit beschränkter Haftung)
The GmbH is the most popular legal structure for SMEs, startups, and family businesses in Switzerland. It provides limited liability and has a lower minimum capital threshold compared to a public limited company.
Minimum capital rules:
- Total minimum capital: 20,000 CHF
- This amount must be fully paid at establishment.
- Partial payment is not accepted; capital must be provided either in cash or as an appropriate in-kind contribution from the start.
Practical results for those preferring GmbH:
- Establishment costs are lower compared to AG.
- Since capital is visible in the commercial register and company documents, it creates a trust factor with customers and banks.
- Founders can largely isolate their personal assets from company debts.
3. Sole Proprietorship
This is the simplest structure for freelancers, consultants, and very small-scale commercial activities.
There is no minimum capital requirement. That is:
- Theoretically, one can start operations without contributing capital.
- Establishment costs are very low; there is no obligation to go to a notary.
However, it has a significant disadvantage: Unlimited personal liability. The entrepreneur is personally liable for the debts of the business with their own assets. Therefore, it is generally not preferred in high-risk sectors.
4. Partnerships (Kollektivgesellschaft / Kommanditgesellschaft)
This is used when two or more people want to do business together and do not want to go for a separate capital company.
General framework:
- There is no legal minimum capital requirement.
- Partners freely determine how much capital to contribute and its form (cash, goods, labor, etc.) in their agreement.
- General partners have unlimited liability; therefore, it is not suitable for high-risk activities.
Capital Payment Process: Bank Account, Blockage Letter, and Registration
The capital payment process when establishing AG and GmbH in Switzerland is strictly tied to both banking regulations and corporate law.
Before Establishment: Blocked Corporate Bank Account
Before applying to the commercial register:
- Founders open a blocked corporate account at a bank in Switzerland where the establishment capital will be deposited.
- For AG, at least 50,000 CHF or 20% of the total capital (whichever is higher),
- For GmbH, the entire minimum of 20,000 CHF is deposited into this account.
The bank issues a blockage letter (Sperrbestätigung) for the deposited amount, and this letter is added to the commercial register application file. Until the company is registered, the money in this account cannot be used freely.
After Registration: Use of Capital
After the company is registered in the commercial register:
- The bank lifts the blockage.
- The capital amount can now be freely used for financing business activities.
The critical point here is: Capital is part of the company’s equity in accounting and cannot be freely distributed below the minimum. Swiss capital protection provisions tie payments to shareholders to strict rules.
Non-Cash Capital: In-Kind Contributions and Offsetting
You are not always required to contribute cash. Especially in technology ventures and asset-intensive investments, capital can be provided in the following ways:
- In-kind capital (contribution in kind): Contributing assets such as machinery, vehicles, software, patents, trademarks, real estate as capital to the company.
- Offset: Offsetting receivables transferred by the founder to the company against the capital debt.
Such transactions are considered “qualified contributions” under Swiss law, thus:
- Assets must be transferred to the company at market value and documented,
- Generally, an independent expert report is required for valuation,
- These matters must be clearly stated in the incorporation documents and commercial register.
This process must be managed carefully from both tax and compliance perspectives.
Minimum Capital is Just a Lower Limit: Strategic Capital Planning
The capital amounts stipulated by law are absolute minimums. In practice, companies prefer to be established with higher capital according to their areas of activity and growth plans.
Some strategic advantages of contributing higher capital include:
- A stronger balance sheet appearance in bank credit and leasing processes,
- Higher credibility with business partners and suppliers,
- Tax planning that can be optimized based on capital and equity structure in some cantons.
On the other hand, contributing excessive capital can also unnecessarily lock up liquidity. Especially in group companies and cross-border structures, whether to use capital or debt (intra-group loan) requires detailed tax and financial planning.
Legal Framework: Swiss Code of Obligations (CO)
The fundamental provisions regarding company establishment and capital structure in Switzerland are found in the Swiss Code of Obligations. The law specifically regulates:
- Minimum capital amounts,
- Methods of capital payment,
- Provisions related to the protection of capital,
- Procedures for capital increase and decrease.
With new corporate law reforms, some modernizations continue to be implemented, especially regarding the determination of share capital in foreign currency, capital flexibility, and corporate governance issues. You can follow the current and official texts through the official legislation portal of the Swiss Federal Administration.
Minimum Capital from a Tax and Compliance Perspective
While corporate tax rates in Switzerland vary from canton to canton, the general band is around approximately 12–21%. The minimum capital amount itself does not directly determine the tax rate; however:
- The equity/debt balance affects the deductibility of interest expenses and weak capitalization assessments.
- Sufficient capital strengthens the economic justification (substance) argument with tax authorities.
- In regulated sectors such as finance, insurance, and crypto assets, licensing authorities (e.g., FINMA) may impose additional capital and equity requirements.
In summary, minimum capital is not just a legal threshold; it also affects international tax planning, transfer pricing, and intra-group funding strategies.
Special Considerations for Foreign Entrepreneurs and Group Companies
For foreign investors establishing a company in Switzerland:
- Capital must come from a legitimate source and must pass through AML (anti-money laundering) controls at the bank.
- In group company structures, a strategic choice must be made between capital contributions from the parent company or funding through debt.
- The company may sometimes be structured as a holding, sometimes as an operating company, or as a branch; each has different capital and tax implications.
For groups employing personnel in Europe and establishing branches or subsidiaries in different countries, the correct capital structure has a cascading effect on payroll (EOR), posted worker, social security, and withholding taxes.
Corpenza Perspective: Turning Swiss Company Capital into a Strategic Advantage
When establishing a company in Switzerland, most entrepreneurs focus solely on the “minimum figure in the law.” However, the right question is:
“What is the most appropriate capital level and legal structure for my business model, international growth plans, and tax strategy?”
At Corpenza, we take a holistic approach to this question:
- We provide the capital planning you need for establishing AG or GmbH in Switzerland,
- Coordinate the blocked bank account and capital blockage process before establishment,
- Align international tax and accounting structures with your group structure,
- Provide personnel leasing solutions that require payroll/EOR, posted worker, and tax optimization,
- Assist with residence permits, golden visas, and investment citizenship plans.
We address all these under a single roof in an integrated manner.
Thus, you not only “establish” a company in Switzerland but also make this company an effective part of your global growth strategy.
Conclusion: Properly Structuring Minimum Capital for Companies in Switzerland
In summary:
- AG (Public Limited Company): Minimum capital 100,000 CHF; at least 50,000 CHF or 20% must be paid at establishment (whichever is higher).
- GmbH (Limited Liability Company): Minimum capital 20,000 CHF and must be fully paid at establishment; no partial payment.
- Sole Proprietorship: No minimum capital requirement; personal liability is unlimited.
- Partnerships: No legal minimum capital; partners determine among themselves.
These figures are merely lower limits. To make a truly healthy start and secure long-term growth, capital should be evaluated together with business area, risk profile, group structure, tax, and mobility plans.
If you are planning to establish a company in Switzerland or another European country, employ personnel, or obtain residency/citizenship through investment, leveraging Corpenza’s international corporate, accounting, payroll, and mobility expertise offers a safer path both legally and financially.
Disclaimer
This text is prepared for general informational purposes and does not constitute legal, tax, or financial advice. Company establishment, capital planning, tax, and residency/citizenship processes in Switzerland and other countries require specific evaluation for each individual and company. Always check current official legislation before making decisions and consult a qualified professional. It is recommended to review resources such as the relevant country administrations and, for example, the legislation portal of the Swiss Federal Administration for official legislation.
