How to Set Up a Swiss Limited Liability Company (AG/SA)

Table of Contents

📝 Introduction

Wondering how to structure a business in Switzerland using a Company Limited by Shares?
This guide covers everything you need to know about the Swiss AG (Aktiengesellschaft / Société anonyme – SA) — also called a Company Limited by Shares (Ltd) — including legal structuring, setup requirements, and compliance rules for 2025.

The AG/Ltd. is one of Switzerland’s most popular legal forms for medium and large enterprises, thanks to its flexibility, limited liability protection, and strong reputation with investors and clients. However, Swiss law imposes clear rules regarding share capital, board composition, and governance — so getting the structure right from the start is crucial.

Whether you’re incorporating from abroad or restructuring your existing business within Switzerland, this guide will walk you through every key step — based on the Swiss Code of Obligations (CO) and other official sources.

If you’re just starting out and want to understand all your options, check out our broader overview: Starting a Business in Switzerland: A Guide to Legal Structures for Entrepreneurs and Foreign Companies. And if you’re considering a smaller-scale setup, don’t miss our detailed post on Sole Proprietorships in Switzerland.

This article focuses specifically on the Company Limited by Shares (Ltd.) — known as Aktiengesellschaft (AG) in German or Société anonyme (SA) in French — to help you understand its key features, setup process, and when it’s the right fit for your venture.

2. What Is an AG (Aktiengesellschaft)?

A Company Limited by Shares (Ltd) — known in Switzerland as an Aktiengesellschaft (AG) in German or Société anonyme (SA) in French — is a corporate legal entity governed by Articles 620–763 of the Swiss Code of Obligations (CO).

Key Features of an AG in Switzerland

Separate Legal Personality: An AG is a legal entity independent of its shareholders. It can own property, enter into contracts, and be sued or sue in its own name.
Share Capital: The minimum required share capital is CHF 100,000, of which at least CHF 50,000 must be paid in at incorporation.
Shareholder Liability: Shareholders are liable only up to the value of their shares. Their personal assets are protected.
Share Transferability: Shares are, by default, freely transferable, making AGs well-suited for external investors or public offerings.
Management Structure: A board of directors manages the company, and a general meeting of shareholders exercises overall control.

📘 Legal Basis: Articles 620–763 CO cover AG formation, capital, governance, shareholder rights, liquidation, and other regulatory requirements.

When to Choose an AG (vs. GmbH or Sole Proprietorship)

An AG is best suited for:

Larger businesses or those planning to scale
Startups seeking external investment
Companies requiring strong brand perception or corporate image
Founders who want limited liability and flexible share structures
Enterprises planning an IPO or employee stock options

Compared to a GmbH, an AG offers more flexibility for raising capital and anonymity of shareholders (shares can be bearer or registered). However, it involves higher formation costs and stricter governance requirements.

3. How to Form an AG (Company Limited by Shares) in Switzerland

Forming an AG in Switzerland is set out in the Swiss Code of Obligations (CO), mainly Articles 620 to 650. The process ensures the company meets important legal rules about capital, registration, and management.

Step 1: Prepare the Articles of Association (Company Rules)

The Articles of Association are a formal document that sets the company’s basic rules. They must be written down and include:

The company’s name and where it’s located
What the company does (its purpose)
The total amount of share capital (money invested by shareholders)
How many shares there are and their value
How shares can be transferred or sold
How the company is managed (board of directors, auditors)

Step 2: Deposit the Minimum Share Capital

Swiss law requires the AG to have at least CHF 100,000 in share capital, which is the money invested by shareholders. At least CHF 50,000 must be paid into the company’s bank account before the company can be officially registered.

The capital is divided into shares, which represent ownership parts of the company. Each share has a fixed value.

Step 3: Founders’ Meeting and Incorporation

The people starting the company (founders) meet to approve the Articles of Association and choose the first board of directors.

The incorporation must be notarized — this means a public official certifies the company was properly set up and the documents are official.

Step 4: Register the Company

The AG must be registered in the Commercial Register of the canton where it will operate. Registration requires:

The Articles of Association
Proof that the minimum share capital was paid
List of board members
The notarized incorporation document

Only after registration does the AG become a legal company able to act on its own (like signing contracts, owning property, or being sued).

Step 5: Set Up Company Management

The AG must have a board of directors responsible for managing the company. At least one board member must live in Switzerland.

An auditor (someone who reviews the company’s financial statements) usually needs to be appointed unless the company is small enough to be exempt.

The company also must hold annual shareholder meetings and follow rules about making decisions.

Summary: Setting up an AG involves specific steps to protect everyone involved—shareholders, creditors, and the public. It requires a minimum amount of capital, official registration, and a clear management structure, all defined in the Swiss Code of Obligations.

4. Key Features of an AG (Company Limited by Shares)

Understanding what makes an AG special will help you decide if it’s the right business structure for you.

Legal Personality

An AG is its own legal “person.” This means it can sign contracts, own property, and be responsible for its debts separately from its shareholders. The company itself can take legal action or be sued.

Share Capital and Shares

An AG must have at least CHF 100,000 in share capital, divided into shares. Shares represent ownership in the company. Shareholders buy these shares and become part-owners.

Each share has a fixed value, and shareholders’ liability is limited to the money they invested. This means if the company owes money, shareholders won’t lose more than what they paid for their shares.

Limited Liability

This is one of the biggest advantages of an AG. Shareholders aren’t personally responsible for the company’s debts. Their risk is limited to their investment in shares.

Tradability of Shares

Shares in an AG are generally easier to sell and transfer compared to other company types like a GmbH (limited liability company). This makes it attractive for businesses planning to raise money from many investors or eventually sell the company.

Management Structure

The company is managed by a board of directors elected by the shareholders. The board makes important decisions and runs the company day to day. The AG must also have an auditor, except for very small companies.

In Short:
An AG offers a clear legal structure with limited liability, flexibility to raise capital, and easier share transfers. These features make it ideal for medium to large businesses that want to grow and protect their owners.

5. When and Why to Choose an AG (Company Limited by Shares)

Deciding on the right business form depends on your goals, resources, and plans for growth. Here’s why many entrepreneurs and companies choose an AG:

Ideal for Raising Capital

If you want to bring in outside investors, the AG is a great choice. Since ownership is divided into shares, it’s easy to sell shares to investors or partners. This helps you raise funds for growth without giving up control immediately.

Limited Liability Protection

As a shareholder, your personal assets are protected. You’re only responsible for the amount you invested in the company’s shares. This reduces personal financial risk compared to structures like sole proprietorships, where personal assets can be at risk.

Credibility and Trust

AGs are often seen as more stable and credible, especially by banks, investors, and business partners. This can help you build stronger relationships and secure better financing or contracts.

Suitable for Larger or Growing Businesses

If you plan to grow, hire many employees, or expand internationally, an AG offers the flexibility and legal structure to support this. It also has a clear management hierarchy, which helps with decision-making as your company becomes more complex.

Not Ideal for Small or One-Person Businesses

Because setting up and running an AG requires more paperwork, higher minimum capital, and ongoing costs (like audits), it’s generally not the best fit for very small businesses or freelancers. In these cases, a sole proprietorship or GmbH may be simpler and more cost-effective.

In Summary:
Choose an AG if you want limited liability, plan to raise capital, seek credibility, or expect your business to grow substantially. It offers strong legal protections and flexibility but comes with higher setup and maintenance requirements.

Accounting and Auditing Requirements

An AG must maintain proper accounting records in line with Swiss law, but the specific requirements vary depending on the company’s size.

Accounting (Bookkeeping)

According to CO Art. 957, an AG must keep double-entry bookkeeping and prepare annual financial statements, including a balance sheet, income statement, and notes.
The financial statements must provide a true and fair view of the company’s financial position.

Auditing

The auditing obligation depends on the size of the AG:

Small companies (not exceeding two of the following thresholds for two consecutive years):
- Balance sheet total: CHF 20 million
- Sales revenue: CHF 40 million
- Employees: 250 full-time equivalents
These companies may undergo a limited audit (also called “review”) — less extensive and costly than a full audit (CO Art. 727a and 729b).

In practice, many smaller AGs routinely waive the audit entirely, which is legally permitted as long as all shareholders agree and no public interest is involved (CO Art. 727a para. 3). This option helps reduce costs and administrative burden.
Medium and large companies (exceeding two of the thresholds above):
They must undergo a full statutory audit by an independent auditor, providing a higher level of assurance (CO Art. 727).

4. How to Incorporate an AG (Company Limited by Shares)

Founding an AG in Switzerland is a formal legal process based on the Swiss Code of Obligations (CO Art. 620–763). A notary will guide you through the process and take care of all the necessary paperwork—including drafting your official documents and submitting them to the Commercial Register.

Step 1: Choose a Company Name and Define the Purpose

You’ll need to:

Choose a company name: It must be unique and include “AG” (or “SA” / “Ltd” depending on the language). Your notary can check with the register to ensure it’s allowed.
Define your company purpose (“but statutaire”): This describes what your company does and will be listed in the Articles of Association. Keep it broad if you want future flexibility.

Step 2: Work with a Notary to Draft the Articles of Association

The Articles of Association (AoA) are the legal foundation of your company. The notary prepares them based on your inputs. They must include:

Company name
Registered office (“siège”): This means the municipality (Gemeinde) where the company is domiciled—not the full street address.
→ ⚠️ If you later move the registered office to a different Gemeinde, you’ll need to modify the AoA through a notary. But moving within the same Gemeinde is fine.
Company purpose
Share capital and types of shares
Governance rules (e.g. shareholder meetings, board of directors)

💡 Notaries usually avoid adding too many rigid details into the AoA so that small future changes don’t always require formal notarization. But it’s still helpful to understand what flexibility you do or don’t have.

Step 3: Deposit the Share Capital

You’ll need to:

Open a blocked capital account with a Swiss bank
Deposit at least CHF 50,000 (50% of the required CHF 100,000 minimum share capital)

The bank issues a capital deposit confirmation, which goes to the notary.

Step 4: Sign and Notarize the Founding Documents

In a brief signing meeting, the notary will finalize and certify:

The founding deed
The Articles of Association
The list of initial shareholders and board members
A declaration on the “Lex Koller”: All cantons require a formal statement that your company does not violate the Federal Act on the Acquisition of Real Estate by Foreigners (“Lex Koller”).
→ This law restricts foreign individuals and entities from acquiring certain types of residential property in Switzerland without a permit. It doesn’t usually affect commercial companies, but the declaration is still mandatory at incorporation.

Step 5: Registration in the Commercial Register

Once notarized, the notary submits all the documents to the cantonal Commercial Register.
Your company legally exists as soon as it appears in the register.

Step 6: Post-Incorporation Registrations

Once your AG is entered in the commercial register, several administrative steps follow. Here’s what to expect — and what you may need to act on:

✅ Tax Registration

You don’t need to proactively register your company with the cantonal tax office — they are automatically notified.
However, you’ll receive a tax questionnaire from the cantonal tax administration asking for details about your business activities, financial year, and accounting setup. Fill it out carefully and return it promptly.

💡 Tip: If the form doesn’t arrive within a few weeks of incorporation, follow up directly with the tax office to avoid delays.

✅ Social Insurance Registration (AHV/AVS)

You’ll need to register your AG as an employer with the cantonal compensation office (Ausgleichskasse / caisse de compensation), even if you’re the only employee (e.g., as a director drawing a salary). This ensures proper contributions to:

Old-age and survivors’ insurance (AHV/AVS)
Unemployment insurance (ALV/AC)
Family allowances and other social insurances

✅ VAT Registration (if applicable)

If your AG expects to generate more than CHF 100,000 in annual Swiss turnover, you must register for Swiss VAT (MWST/TVA/IVA) with the Federal Tax Administration (FTA).
This is not automatic — you need to apply directly, usually within 30 days of starting taxable activity.

5. How to Manage an AG (Aktiengesellschaft)

Managing an AG involves a clear separation of roles and legal responsibilities to ensure smooth operation and compliance with Swiss law.

Board of Directors (Verwaltungsrat / Conseil d’administration)
The AG is managed by a Board of Directors, which acts as the top decision-making body. According to the Swiss Code of Obligations (CO Art. 707–716), the board is responsible for setting the company’s strategic direction, overseeing the executive management, and ensuring compliance with laws and statutes. The board appoints the executive management and has the power to represent the company externally.

Executive Management (Geschäftsführung / Direction)
The executive management handles the day-to-day running of the company. This team is appointed by the Board of Directors and operates under its supervision. While the board focuses on long-term strategy and supervision, the executive management ensures operational goals are met efficiently.

General Meeting of Shareholders (GV / Assemblée générale)
The General Meeting is the supreme governing body of the AG and includes all shareholders. It usually meets once a year, as required by law (CO Art. 699). The meeting’s key roles include approving the annual financial statements, deciding on profit distribution (dividends), electing board members, and making major corporate decisions such as amendments to the Articles of Association or capital changes.

Legal Requirements for Meetings and Resolutions
Swiss law requires certain formalities for meetings. Quorum rules vary depending on the nature of the decisions but typically require a majority of votes present. Decisions are generally made by a majority vote unless stricter rules apply by law or the Articles of Association (CO Art. 703). Minutes of meetings must be kept to document resolutions and decisions, providing legal evidence of compliance.

Liability of Directors and Officers
Board members and executives have a duty of care and loyalty towards the company and its shareholders. If they breach their duties, for example by acting negligently or in conflict of interest, they can be held personally liable for damages (CO Art. 754). This liability ensures accountability and encourages responsible management.

Practical Tips for Managing Your AG:

Keep communication clear and regular: Hold board meetings at least quarterly, even if not legally required, to stay on top of business issues and avoid surprises.
Document everything: Properly record minutes of all General Meetings and board meetings. This protects the company and its directors in case of disputes.
Define clear roles: Make sure the division of responsibilities between the Board of Directors and executive management is well-defined to prevent overlaps or confusion.
Use Swiss corporate governance guidelines: Even if your AG is small, following recognized governance best practices improves transparency and trust with investors.
Consider liability insurance: Directors & Officers (D&O) insurance can protect board members and executives from personal financial risk in case of legal claims.

6. Taxation & Financial Obligations

Understanding your AG’s tax responsibilities is crucial for smooth operations.

Corporate Tax Rates

Your AG pays corporate income tax at three levels:

Federal tax: 8.5% on profit after tax.
Cantonal and communal tax: Varies depending on the canton, typically ranging between 11% and 21%.

The combined effective tax rate usually falls between 12% and 24%, depending on the canton where your company is registered.

Withholding Tax on Dividends

Dividends paid to shareholders are subject to a 35% withholding tax. Swiss resident shareholders or foreign investors may reclaim this fully or partially under tax treaties by submitting the necessary documents.

🔺For an in-depth look at tax liability in Switzerland—who is taxed, under what conditions, and how residence or business presence plays a role—see our complete guide to subjective tax liability in Switzerland.

7. Pros and Cons of the Swiss AG

Pros

Builds Trust with Partners and Clients: Because the AG is widely recognized and regulated, it signals stability and professionalism — great if you want to attract investors or do business internationally.
Protects Your Personal Assets: Your risk is limited to the money you invest in the company, so your personal belongings stay safe if the business runs into trouble.
Easy to Transfer Ownership: You can sell or transfer shares without disrupting the company’s operations, making it easier to bring in new partners or investors.
Good for Raising Capital: You can issue new shares to raise money, which is ideal if you plan to grow or expand.
Company Lives On: The AG continues even if shareholders or directors leave or change — no need to restart the business.

Cons

More Expensive and Paperwork-Heavy: Setting up an AG requires notaries, official filings, and ongoing public disclosures — this means higher upfront and ongoing costs compared to simpler business types like GmbH.
Annual Financial Statements Are Public: You must file detailed accounts, which become accessible to anyone interested, so you lose some financial privacy.
Changes to the Articles of Association (AoA) Require a Notary: While everyday decisions are flexible, any high-level changes to the company’s rules in the AoA need notarization, which can slow down processes and add costs.

8. Frequently Asked Questions (FAQ)

Can a foreigner start an AG in Switzerland?
Yes. Foreigners can fully own and start an AG in Switzerland without needing to live in the country. However, at least one member of the board of directors must have Swiss residency to meet legal requirements.

Can an AG be converted into a GmbH?
Yes, an AG can be converted into a GmbH (Gesellschaft mit beschränkter Haftung). This requires a formal process including shareholder approval, drafting new articles of association, notarization, and registration with the commercial register.

Do I need a Swiss board member?
Yes. Swiss law requires that at least one board member of an AG must be resident in Switzerland. This ensures proper local representation and compliance with Swiss corporate regulations.

Can I set up an AG remotely?
Yes, the incorporation process can be completed remotely with the help of Swiss notaries and legal advisors, making it possible to set up your AG without being physically present in Switzerland.

9. Legal Basis and Further Resources

For detailed legal information on the Swiss AG, consult the Swiss Code of Obligations (CO), which governs company law and includes Articles 620–763 specifically covering the AG structure:

Swiss Code of Obligations (CO) – English translation (Federal Council)

Additionally, the Ordonnance du Registre du Commerce (ORC) provides practical regulations related to the commercial register and company registration procedures, complementing the CO.

Ordonnance du Registre du Commerce (ORC) (French)

To understand practical steps and official guidelines on company formation in Switzerland, visit the State Secretariat for Economic Affairs (SECO):

SECO – Limited Liability Companies

For verifying company details, official registrations, and commercial register entries, use the Swiss Central Business Name Index (Zefix):

Zefix – Central Business Name Index

10. Summary: What to Keep in Mind Before Setting Up an AG

Choose the AG when you need strong credibility and easy transferability of shares. It’s ideal for medium to large businesses or those planning outside investors.
Minimum share capital is CHF 100,000, with CHF 50,000 fully paid up at incorporation.
The Articles of Association must be notarized and include key info like company purpose and registered municipality (Gemeinde). Changing certain details later requires a notary.
Bookkeeping and accounting must comply with Swiss law and vary by company size, but smaller AGs often keep it simple in practice.
Tax registration is mostly automatic, but social insurance registration and VAT registration (if applicable) are your responsibilities.
Understand the costs: AG setup and administration can be more expensive than other business forms, but you gain limited liability and investor appeal.
Seek professional advice early—especially from a notary and tax specialist—to avoid surprises and ensure compliance.