You've made up your mind: it's going to be a limited liability company. But which one? The GmbH (Gesellschaft mit beschränkter Haftung – limited liability company) and the AG (Aktiengesellschaft – public limited company) are the two most important corporate structures in Switzerland – and the differences are more significant than many people realise. The wrong choice means higher costs, less flexibility, or legal headaches.
This article clarifies which legal structure is right for which situation. With concrete figures, up-to-date legal foundations from the Code of Obligations (OR), and a clear decision matrix for your venture.
Key Differences: GmbH vs AG at a Glance
Both legal structures are legal entities with limited liability – meaning the shareholders are generally only liable with the company's assets, not their personal assets. But that's where the similarities end:
| Criterion | GmbH | AG |
|---|---|---|
| Legal basis | OR Art. 772–827 | OR Art. 620–763 |
| Minimum capital | CHF 20,000 (fully paid up) | CHF 100,000 (min. CHF 50,000 paid up) |
| Shareholder liability | Limited to capital contribution | Limited to share capital |
| Shareholder name disclosure | Yes – in the Commercial Register | No (optional for registered shares) |
| Transferability of shares | Restricted (consent required) | Freely transferable (stock exchange listing possible) |
| Audit requirement | Opting-out possible (up to 10 employees) | Opting-out possible (up to 10 employees) |
| Formation costs | CHF 3,000–5,000 | CHF 8,000–15,000+ |
| Stock exchange eligibility | No | Yes |
| Investor suitability | Limited | Very well suited |
| Best suited for | SMEs, teams of 1–10 people | Growth companies, investor-backed businesses |
Capital and Liability in Detail
GmbH: CHF 20,000 – fully paid up
For a GmbH, the share capital of at least CHF 20,000 must be paid in full in cash at the time of formation (or covered by contributions in kind). It is deposited into a blocked account at a Swiss bank before the deed of incorporation is notarised.
GmbH – Share Capital
After formation, the share capital belongs to the company and can be used as working capital. It is not money lost – you are investing it in your own business. Maximum share capital: CHF 2 million (above this threshold, an AG must be chosen).
AG: CHF 100,000 – half possible
The AG requires a share capital of at least CHF 100,000. However, only CHF 50,000 needs to be paid up (liberiert) at the time of formation – the remaining CHF 50,000 can remain outstanding as "uncalled capital", but must be callable at any time.
AG – Share Capital
The share capital is divided into shares (minimum par value per share: CHF 0.01). Bearer shares were abolished in 2021; only registered shares are permitted today. AG shareholders must be entered in the share register, but are not visible in the Commercial Register.
Liability in Practice
Both structures protect your personal assets – but with limitations. Banks often still require a personal guarantee from the managing director or principal shareholder for small companies. The legal limitation of liability protects you from creditors, but not automatically from your own lenders.
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Tax Differences 2026
From a tax perspective, the GmbH and AG are treated almost identically – both are subject to profit tax at the company level and dividend taxation at the shareholder level. There are, however, subtle differences that become relevant in certain situations.
Profit Tax: The Same for Both
Both the GmbH and the AG pay profit tax on net income. The effective combined rate (federal + cantonal + municipal) depends on the canton and ranges in 2026 from approximately 11.9% (Nidwalden/Zug) to 21.5% (Bern).
Dividend Taxation: Partial Relief
Dividends from a GmbH or AG are taxable as income for the recipient, but with a deduction of 50% (federal level) or cantonal variants (30–50% deduction). This substantially reduces economic double taxation. Condition: the shareholder holds at least 10% of the capital.
Company profit CHF 200,000. After profit tax (15% effective rate), CHF 170,000 remains. Dividend distribution: CHF 170,000. Of this, 50% is tax-deductible → income tax is levied on CHF 85,000 (instead of the full CHF 170,000). This principle applies equally to both the GmbH and the AG.
Where GmbH and AG Differ on Tax
- Share capital repayment: For the GmbH, repayment of share capital is complex; for the AG, a capital reduction is also possible, but slightly more flexibly structured under corporate law.
- Capital contribution principle: Both can return capital contributions tax-free (provided they are correctly disclosed in the annual accounts).
- Loss carry-forward: Losses can be carried forward for 7 years and offset against future profits – the same applies to both legal structures.
Costs: Formation and Ongoing Operations
GmbH: Lower Formation Costs
GmbH – Formation Costs
Notary (deed of incorporation, articles of association): CHF 1,500–3,000. Commercial Register entry: approx. CHF 600. SHAB publication: approx. CHF 200. Bank blocked account fee: CHF 200–500. Optional legal/formation advice: CHF 500–1,500.
AG: Higher Initial Costs
AG – Formation Costs
Notary (more complex deed of incorporation): CHF 3,000–6,000. Commercial Register entry: approx. CHF 1,000. SHAB: approx. CHF 300. Bank payment confirmation: CHF 300–700. Legal due diligence recommended: CHF 2,000–5,000.
Ongoing Costs Compared
| Cost type | GmbH | AG |
|---|---|---|
| Accounting (fiduciary/trustee) | CHF 3,000–8,000/year | CHF 4,000–12,000/year |
| Audit opting-out | Possible (under 10 full-time employees) | Possible (under 10 full-time employees) |
| Audit costs (if required) | CHF 3,000–8,000/year | CHF 5,000–15,000/year |
| Annual Commercial Register fee | No annual fee | No annual fee |
| Maintaining shareholder records | Shareholder list (internal) | Share register (internal, formal) |
| Administrative burden | Medium | High |
Flexibility and Governance
GmbH: More Control, Less Anonymity
In a GmbH, all shareholders are entered in the Commercial Register – a publicly accessible document. This limits anonymity, but for most SMEs this is not an issue. At the same time, the GmbH offers considerable flexibility in governance: you can freely structure voting rights and profit rights in the articles of association (voting rights do not have to correspond to the capital share – to a certain extent).
Transfer of shares in a GmbH generally requires the approval of the shareholders' meeting. This protects against unwanted third parties becoming shareholders, but can be cumbersome in the event of an exit or when bringing in investors.
AG: Stock Exchange Ready and Investor-Friendly
The AG is the only Swiss legal structure that can be listed on a stock exchange. Shares are in principle freely transferable, which makes the AG attractive for growth companies with investor plans. Venture capital and private equity funds prefer AG structures due to their well-established legal framework.
If you plan to bring in external investors within the next 3 years, choose the AG from the outset. Converting a GmbH into an AG retrospectively is complex and costly (approx. CHF 5,000–15,000 in additional costs plus time). Thinking ahead saves money.
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Founding Guide Switzerland 2026 – GmbH & AG
All the steps to forming your GmbH or AG – from articles of association templates to VAT registration. Includes a cost overview, notary list, and formation checklist.
Decision Guide: When GmbH, When AG?
Choose the GmbH if…
- You are founding alone or with a small team (1–5 people)
- You are not planning external investor funding
- You want to control the transfer of shares (family business)
- You can manage with CHF 20,000 start-up capital
- You want maximum cost control during the formation and operating phase
- Anonymity of shareholders is not a concern
Choose the AG if…
- You want to attract venture capital, business angels, or PE investors
- You are planning a long-term stock exchange listing (SIX, Euronext, etc.)
- You want to motivate employees with share options (ESOP)
- You are building a larger company with multiple shareholders
- Anonymity of shareholders is important (no entry in the Commercial Register)
- You want to sell the company or transfer shares more easily later on
Special Case: GmbH with AG-Style Articles?
In practice, many SME GmbHs have articles of association very similar to those of an AG. The key differences remain: capital requirements, anonymity, and stock exchange eligibility. A GmbH cannot be converted into an AG without a complete new formation.
Step by Step: Formation Process GmbH vs AG
Forming a GmbH – 8 Steps
- Check the company name – Zefix.ch (free of charge)
- Draft the articles of association – OR Art. 776 ff. (template articles from the canton or a fiduciary)
- Pay in share capital – CHF 20,000 into a blocked account; obtain bank confirmation
- Visit a notary – have the deed of incorporation publicly notarised
- Commercial Register entry – notary submits the application to the Commercial Register (approx. 5–10 working days)
- AHV registration – register the company and managing director as employer/employee
- Check VAT obligation – mandatory from CHF 100,000 turnover; optional below this threshold
- Set up accounting system – double-entry bookkeeping is mandatory (OR Art. 957)
Forming an AG – 10 Steps (additional complexity)
- Check the company name (Zefix)
- Draft the articles of association (more complex than GmbH – share classes, transfer restrictions, etc.)
- Draw up the formation plan (OR Art. 629)
- Pay in share capital (min. CHF 50,000 into a blocked account)
- Notary – public notarisation of the deed of incorporation + articles of association
- Constituting the Board of Directors (board minutes)
- Commercial Register entry
- Set up and maintain the share register
- Set up AHV/social insurance contributions
- Clarify VAT, accounting, and audit requirements
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Ready to Form Your Company?
Our Founding Guide takes you step by step through the formation process – for both GmbH and AG. Includes an articles of association checklist, notary cost overview, and all the relevant forms.
Frequently Asked Questions
Can I convert a GmbH into an AG?
Not directly – a direct conversion from GmbH to AG is not provided for under Swiss law. You must form a new AG and then transfer the business (transfer of assets and liabilities, or a merger under the Merger Act/FusG). This costs CHF 5,000–20,000 and takes several months. Better: choose the right legal structure from the outset.
Do I need an accountant for a GmbH or AG?
Double-entry bookkeeping is mandatory for both legal structures (OR Art. 957). You can manage it yourself (software such as Bexio or Abacus), but for the tax return and annual financial statements we recommend a fiduciary. Costs: CHF 3,000–10,000/year depending on complexity.
What is the biggest practical difference between a GmbH and an AG?
The most important difference is flexibility in capital structure and bringing in investors. An AG is more investor-friendly (shares freely transferable, no Commercial Register transparency for shareholders), while the GmbH is cheaper and simpler to administer.
Does the managing director of a GmbH need to be Swiss?
No – but at least one authorised signatory (managing director) must be resident in Switzerland. This can be a Swiss national or a foreign national with a valid residence permit. The same applies to the Board of Directors of an AG.
Further Reading
- Starting a Business in Switzerland 2026: Sole Trader or GmbH?
- Canton Tax Comparison 2026: Where Do You Pay the Least?
Sources
- OR Art. 620–827 (AG and GmbH): Fedlex – Code of Obligations
- SME Portal – Choice of Legal Structure: kmu.admin.ch – Legal Structure
- Commercial Register Office: Zefix – Central Business Name Index
- ESTV – Profit Tax Switzerland: estv.admin.ch – Direct Federal Tax
- Merger Act (FusG): Fedlex – FusG