Main Advantages Of The Swiss Corporation

The Swiss corporation is a joint-stock company known as AG (Aktiengesellchaft) in German or as SA (SocieteAnonyme) in French and is the most widely type of business structure used in Switzerland. Most often, foreign companies choose this type of business structure to establish Swiss subsidiaries.

The Swiss corporation is a distinct legal entity. The liability of the corporation is limited only to its assets. Regarding the capital of the corporation, the sum is established in advance and is divided into shares. Corporations must be subjected to independent audits conducted annually and maintain financial records in accordance with the Swiss legislation.

The minimum required share capital for a Swiss corporation is 100,000 CHF, from which 20% or at least 50,000 CHF must be paid upon the company’s registration. The shareholders have the option to remain anonymous. Foreign investors may hold shares in a Swiss corporation, but according to the Swiss legislation, the company must have at least one director that is a Swiss resident.

Advantages of the Swiss corporation

  • Liability is limited to the company’s assets;
  • Capital providers (shareholders) may remain anonymous;
  • Simple arrangements in case of inheritance;
  • Annual financial statements must be published only if the Swiss corporation is listed on the stock exchange or has outstanding bonds;
  • Suitable business structure for holding companies.

The main disadvantage of the Swiss corporation is the fact that the required minimum share capital is rather large.

Requirements for the establishment of a Swiss corporation

To form a Swiss corporation, it is necessary to have at least three shareholders, from which at least one must be a Swiss citizen and reside in Switzerland. However, it is possible for the company to have shares that are held in trusts by third parties. The legal requirements for registering a Swiss corporation require having at last three shareholders upon incorporation, but founders are allowed to withdraw after the founding act is issued.  This allows corporations to have just one founding partner that effectively manages the company.

For the registration of the newly-formed company it is necessary to draft the articles of corporations and to establish the governing bodies. The incorporation procedure is concluded after the company is registered with the Swiss Commercial Registry and the registration entry is published in the Swiss Commercial Gazette.

Governing bodies of the Swiss corporation

According to the Swiss legislation, a corporation must have three governing bodies: the general meeting of shareholders, the board of directors and auditors. The general meeting of shareholders is the highest governing body, having the power to define and modify the articles of incorporation, elect the board of directors, select the statutory auditors, approve the annual reports, income statements and balance sheet, decide the profit distribution and ratify the actions of the board of directors.

The board of directors acts as a managing body for the Swiss corporation. It can consist of at least one or more members that are also shareholders. However, the majority of the company’s directors must be Swiss residents and be citizens of Switzerland or of EU or EFTA member states. Exceptions apply in the case of holding companies. At least one of the company’s representatives must be a Swiss resident.

Statutory auditors are appointed to monitor and examine the accuracy of the annual reports and financial statements. They are required to report to the shareholders at the annual general meeting or to the board of directors. Auditors must be independent and certified.

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