The type of company you set up is one of the first and most important decisions you will make when setting up a company in Switzerland. The limited liability company (GmbH) and the stock corporation (AG) are the two most popular legal forms. But which one is right for your company? In this article, we present the advantages and disadvantages.

The essentials in brief:

• Liability & capital: GmbH requires a minimum capital of CHF 20,000, AG at least CHF 100,000. GmbH is suitable for low-risk companies with limited start-up capital, AG for higher capital requirements and investors
• Flexibility & administration: GmbH is easier and cheaper to manage, ideal for small businesses. AG offers more flexibility for capital raising and share sales, but is more complex.
• Investors: AG is more attractive to investors due to the clear investment structure and higher liquidity.
• Taxes: Tax differences are small, but the AG offers more opportunities for long-term tax optimization.

1. Liability and capital

The biggest difference between GmbH and AG in Switzerland lies in liability and capital contributions. In the case of a GmbH, the shareholders are liable up to the amount of their capital contribution, which must be at least CHF 20,000. In comparison, an AG requires a minimum capital contribution of CHF 100,000, of which you must pay in at least CHF 50,000 at the time of founding. The shareholders are only liable for their share capital.
Who is this important for? If you are starting a company in Switzerland that operates in a low-risk area or if the start-up capital is limited, the GmbH could be the better choice. If you have a higher capital requirement or if you want to attract investors, the AG is often more sensible.

2. Flexibility and management

The GmbH in Switzerland offers a simpler and more cost-effective structure. This makes sense especially for smaller companies, as fewer legal requirements have to be met. AGs in Switzerland, on the other hand, require a more complex management structure, including a board of directors and regular general meetings. However, this structure offers more flexibility (when it comes to the sale of shares or the inclusion of investors).
Consider: A GmbH is ideal for smaller companies and family businesses in which the shareholders are actively involved in the business activities. On the other hand, an AG is better suited for larger companies or those with international ambitions, as it can more easily raise capital from external investors.

3. Tax matters

The tax burden hardly differs between GmbH and AG in Switzerland. Both are subject to profit tax, whereby the use of profits at the AG can be made somewhat more flexible (for example, by issuing dividends to shareholders).
From a tax point of view: The differences are marginal, but the AG offers more scope for long-term tax optimization through the opportunity to hold and sell shares.

4. Attractiveness for investors

Investors often prefer the AG, as they have a clear investment structure through the purchase of shares and the liquidity is provided by the possible sale of the shares. In the case of a GmbH, getting started is more complicated for investors, as there are special regulations for the transfer of shares.
Key point: If you are planning to get external investors on board or are considering the possibility of an IPO, an AG is the more advantageous choice.

Conclusion: GmbH or AG in Switzerland?

The choice between GmbH and AG in Switzerland depends strongly on the individual requirements and goals of your company. The GmbH offers a simpler and more cost-effective structure that is ideal for smaller companies and start-ups. On the other hand, the AG is the better choice for companies with higher capital requirements, growth-oriented plans and the goal of attracting investors. Let us advise you free of charge and we will help you to make the right choice.