The principal corporate legislation includes the following documents:
- Schweizerisches Obligationenrecht (Swiss Code of Obligations).
- Bundesgesetz uber Schuldbetreibung und Konkurs (Swiss Federal law on Debt Collection and Bankruptcy).
- Bundesgesetz uber die direkte Bundessteuer (Federal Law on Direct Taxation).
- Bundesgesetz uber die Banken und Sparkassen (Swiss Federal Act on Banks and Savings Associations).
- Bundesgesetz uber die Anlagefonds (Federal Act on open ended Investment Companies).
- Bundesgesetz uber die Internationale Privatrecht (Federal Act on Private International Law).
The language of legislation and corporate documentation is any Swiss official language (German, French, Italian or Romansch), but foreign language translations can be obtained. A company incorporated in Switzerland has the same powers as a natural person.
In Switzerland there are the two types of company used for international trade and investment:
- Aktiengesellschaft (AG) – Stock Company;
- Gesellschaft mit beschrankter Haftung (GmbH) – Limited Liability Company.
A company incorporated in Switzerland is subject to restrictions on the following trading and business activities, which cannot be undertaken without a special licence or consent: banking, insurance, assurance, reinsurance, fund management, collective investment schemes, or any other activity that suggests an association with the banking or finance industries.
Company incorporation procedure involves the submission to the Commercial Register of the following documentation:
- The Public Deed of Incorporation executed before a Notary Public;
- The Articles of Incorporation;
- Confirmation by a Bank that the share capital is held in an account;
- Consent to Act forms signed by the proposed directors;
- A declaration of the applicants;
- An application to the Commercial Register covering the above documentation and including the notarised signature of the person appointed to represent the company.
A registered office must be maintained in the canton of incorporation. Owing to the costs associated with incorporation and paid up share capital requirements, off-the-shelf companies are not available.
The names of companies being incorporated are subject to the following requirements and restrictions:
- The name of a body corporate or trust entity may be in any language that uses the Latin alphabet, but the Public Registry may require a translation into any official Swiss language.
- A name that is identical or similar to an existing name is unacceptable.
- A name that may imply government patronage is not permitted.
- Any name that in the opinion of the Registrar may be considered undesirable is restricted.
- If the Company name includes such words as Bank, Building Society, Savings, Insurance, Assurance, Reinsurance, Fund Management, Investment Fund, Switzerland, State, Country, Municipality, Principality, Red Cross or their foreign language equivalents, then consent or a licence are required.
- The following suffixes are used to denote limited liability: Aktiengesellschaft or AG; Gesellschaft mit beschrankter Haftung or GmbH.
A minimum of one director/manager who must be a Swiss citizen and resident in Switzerland must be appointed. If more than one is appointed the majority must be Swiss citizens and resident in Switzerland. Corporate directors are not permitted. There is no requirement under Swiss Law for a company secretary to be appointed. The minimum number of shareholders depends on the type of Company: for an AG the minimum number of shareholders is three, while for a GmbH it is two.
The minimum authorised and issued share capital depend on the type of Company:
AG: This type of limited liability company has a minimum authorised share capital of SFr 100,000, all of which has in practice to be issued and fully paid up. When the share capital exceeds SFr 250,000 a capital duty of 1% is payable on the amount over SFr 250,000.
GmbH: The minimum authorised capital is SFr 20,000 but the company does not have shares; instead, the owners’ share stake is registered in the Commercial Register. SFr 10,000 must be paid up on incorporation.
The following classes of shares are permitted, depending on the type of Company:
- AG: Registered shares, bearer shares and preference shares.
- GmbH: Share stakes only. Bearer shares are not permitted.
Annual Taxation and Fees
Switzerland’s 26 cantons each have their own taxation system. The cantons have preserved many of the rights they held as sovereign political entities. Nevertheless, the constitution delegates considerable authority to the Federal Government, including the power to conclude treaties and alliances, to levy taxes and to regulate foreign trade. There are many cantons with favourable taxation levels and some cantons with higher unemployment rates or small populations (in mountain regions) have particularly low levels of taxation.
There are double tax agreements with Australia, Austria, Belgium, Brazil, Canada, Denmark, Egypt, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Indonesia, Ireland, Italy, Japan, Malaysia, the Netherlands, New Zealand, Norway, Pakistan, Portugal, Singapore, South Africa, South Korea, Spain, Sri Lanka, Sweden, Trinidad and Tobago and the USA.
There are no licence fees in Switzerland.
Companies are required to keep financial records. Although there is no requirement to file financial statements with the Registry, they must be presented to the shareholders and filed with the tax authorities.
Economy and Infrastructure
Switzerland has a prosperous and stable modern economy with a per capita income approximately 10% higher than in other Western European countries.
The Swiss have a highly developed telecommunications system that offers state-of-the-art telephone, fax, telex and Internet connections as well as courier services. Swissair, the national air carrier, offers direct flights to many cities world-wide, and domestic air travel is excellent, offering frequent services to most cities.
Switzerland is the world’s largest offshore private banking centre, with the Big Two banks, Credit Suisse and UBS, and a plethora of private banks, handling one-third of the world’s offshore private wealth.
For private investors, Switzerland’s banks, based in the cities of Zurich, Basle and Geneva, offer a safe and mainly conservative approach to investing, backed by political stability and strong banking secrecy practices.
Most Swiss banks have a well-diversified range of Swiss and Luxembourg-based mutual funds that are available world-wide to private investors, along with a range of discretionary portfolio management services and banking facilities.
The currency is the Swiss Franc (SF). There are no exchange controls.