Founding of limited liability or Ltd. company in Zug, Switzerland
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Are you thinking about starting and establishing a business in Switzerland? We congratulate you on this step! It is essential to think about some basic questions before starting a business.
For many people, starting a business is a matter associated with emotion and enthusiasm. But especially when founding a new company, "Ready, set, go" is the wrong approach. Especially in the beginning, there are some bureaucratic hurdles to overcome before things can start. For this reason, proper and, in particular, early planning is very important.
Below is an overview of the legal forms and administrative tasks that a new entrepreneur will encounter.
Generally, a distinction is made between two types of legal forms:
We will focus on legal person in this article. These include the stock corporation (AG) and the limited liability company (GmbH)
In the case of a joint-stock company, the share capital must be at least CHF 100,000. In the case of a joint-stock business which is not listed on the stock exchange, the share capital is divided into registered shares. As of 1 January 2023, the nominal value of the shares needs only be higher than zero. At the time of incorporation, at least 20 % of the nominal value must be paid on each share, but at least 50,000 francs.
An Ltd. can be founded by one or more natural persons or legal entities. In the case of natural persons, whether they are foreigners or Swiss, it does not matter from the point of view of company law. However, the formation can become more complicated if one or more of the founding shareholders are foreign companies. The company must be capable of acting in Switzerland. This means that at least one member of the board of directors must be represented who is a resident of Switzerland and has an individual signature.
Like a corporation, a GmbH has its own legal personality. Also, only one person is required for the formation of the GmbH. The company must be represented by a person who is a resident of Switzerland. This can be a shareholder or a director. The share capital of CHF 20,000 must be fully paid up. There is no legal upper limit for the share capital. As of 1 January 2023, the nominal value of the ordinary shares needs only be higher than zero.
The differences to the AG, lie above all in the fact that the shareholders (GmbH), in contrast to the shareholders (AG), do not merely participate financially but usually also wish to participate in the management and are more closely associated with the company. The shareholders are subject to the duty of loyalty and, depending on the articles of association, also to the prohibition of competition.
In principle, one can freely choose the name of the company. However, the name must be markedly different from already registered companies, must not cause deception and must not be contrary to public interests. It can be a fantasy name or a name with a factual designation. The additional word "AG" or "GmbH" must be added to every company name.
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In order to establish an AG or a GmbH, an act of foundation must be publicly notarized by a notary public. The following documents must be submitted to the notary public for the act of establishment:
After the act of formation, the company must be filed for registration with the Commercial Register Office Zug. The original of the foundation articles and the above-mentioned supporting documents must be enclosed with the registration. As soon as the bank receives the extract from the Commercial Register Office, the company's paid-up share capital or nominal capital is at its disposal.
One to five days should be allowed for the preparation of the establishment documents. The entry in the commercial register should be made within three to seven days.
Corporations (AG) and limited liability companies (GmbH) are required to keep books and accounts. They are used to record business transactions and facts that are necessary for the presentation of the company's net assets, financial position, and results of operations.
By law, a certain minimum structure is required for the balance sheet and the income statement. When preparing the balance sheet and income statement, statutory valuation requirements and proper accounting principles must be observed (completeness, clarity, materiality, prudence, consistency, etc.). It should be possible to assess the asset and income situation as reliably. The statutory valuation rules permit the formation of hidden reserves, even under the new accounting law.
The biggest advantage of setting up a company in the canton Zug in Switzerland is the tax aspect. Zug offers one of the lowest profit and capital tax rates in Switzerland. The tax burden in the city of Zug for profit tax is 11.9% and for capital tax 0.07%. The above tax rates include federal, cantonal, and municipal taxes.
However, this is by far not the only tax advantage in the canton of Zug. It is well known throughout Switzerland that the Zug Cantonal Tax Administration treats its taxpayers well. According to an article in Bilanz a few years ago, the tax administration of the Canton of Zug is described as follows: "In Zug, the taxpayer is unreservedly the king. He not only, as is well known, delivers noticeably less money to the revenue; he is also carried on his hands. The Swiss tax paradise par excellence comes on top in no less than six of eight indicators. The Zug tax authorities work most efficiently, are best motivated, and are the most customer-friendly."
Therefore, the canton of Zug scores not only on the hard facts (tax rates) but can also convince with its soft facts (business-friendly and service-oriented tax authority)
Ensuring the choice of the appropriate form of enterprise
Simplification of your foundation process
Assistance even for complex foundation
Strengthen the digitalization of your company
Legally correct representation of your foundation
Support for the start of your new company
Company foundation is the start of your entrepreneurial adventure. It must be made factually and professionally correct so that your company can take off immediately afterward. We enjoy founding new companies because they are the economic future of Switzerland and the world. Get in touch with our experts. We are there for you from the very first moment!
