Complete Guide 2026

LLC vs Corporation in Switzerland: Which Structure Is Right for You?

Over 165,000 limited liability companies and 120,000 corporations are registered in Switzerland's commercial registry. These two legal forms dominate the Swiss business landscape — but which one fits your project?

Choosing between an SA (société anonyme / AG) — the Swiss corporation — and a Sàrl (société à responsabilité limitée / GmbH) — the Swiss LLC — is one of the most consequential decisions for any entrepreneur in Switzerland. Share capital requirements, ownership privacy, governance, taxation, and transferability of shares all come into play.

This guide provides an in-depth comparison of both structures to help you make the right call. Looking for a broader comparison that includes sole proprietorships? Check out our complete guide to Swiss business structures.

LLC vs Corporation: find your answer in 30 seconds

Four criteria will settle the question for most entrepreneurs:

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Available capital

Less than CHF 50,000 → the LLC (Sàrl/GmbH) wins by default (minimum capital CHF 20,000). Over CHF 100,000 available → the Corporation (SA/AG) becomes a realistic option.

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Number of owners

1 to 5 partners → the LLC is the simplest choice. A large or changing group of shareholders → the Corporation offers far more flexibility.

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Need for privacy

LLC: all shareholders are publicly listed in the commercial register. Corporation: only board members are visible — shareholders remain anonymous.

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Fundraising plans

Venture capital, angel investors, or an eventual IPO → the Corporation is the standard. Self-funded or bank-financed → the LLC is perfectly adequate.

The LLC in Detail

Limited Liability Company (Sàrl / GmbH)

The most popular legal form for SMEs and independent professionals in Switzerland. Affordable, protective, and well-suited to small businesses.

Key Characteristics

What Defines the Swiss LLC

Governed by articles 772 to 827 of the Swiss Code of Obligations (CO), the LLC combines liability protection with straightforward management.

Minimum capital: CHF 20,000, fully paid up at incorporation
Shares (parts sociales): registered, minimum nominal value CHF 100
Members: 1 or more, all listed in the commercial register
Management: one or more managers (at least one must be resident in Switzerland)
Accounting: double-entry bookkeeping required
Auditor: mandatory once the company exceeds 10 full-time employees (or upon request of a member holding 10% of capital)

Advantages

Why Choose an LLC

The LLC offers an excellent balance of simplicity and protection for small and medium-sized businesses.

Low entry cost: CHF 20,000 vs. CHF 100,000 for a Corporation
Limited liability: your personal assets are protected
Flexible management: members manage the company directly, without a formal board of directors
Quick incorporation: 4 to 6 weeks on average
Formation costs: CHF 2,000 to 5,000 (notary, commercial register, miscellaneous fees)
Control: share transfers require member approval — built-in protection against unwanted third-party entry

Disadvantages

Limitations of the LLC

Some characteristics of the LLC can become restrictive depending on your situation.

Mandatory transparency: all members and their shareholdings are publicly visible in the commercial register
Complex share transfers: requires a notarized deed, member consent, and an update to the commercial register
Less attractive to investors: venture capital firms prefer the Corporation due to easier share transfers
Double taxation: profits are taxed at the company level, then dividends are taxed again as personal income
Residency requirement: at least one manager must be domiciled in Switzerland

The Corporation in Detail

Swiss Corporation (SA / AG)

The preferred legal form for larger companies, fundraising, and structures that require shareholder anonymity or equity flexibility.

Key Characteristics

What Defines the Swiss Corporation

Governed by articles 620 to 763 of the Code of Obligations, the SA/AG is the most common legal form among large Swiss companies.

Minimum share capital: CHF 100,000, of which at least CHF 50,000 (or 20% of total) must be paid up at incorporation
Shares: registered or bearer, any nominal value (commonly CHF 0.01 to CHF 1,000)
Shareholders: 1 or more, not published in the commercial register
Governance: mandatory board of directors (at least one member domiciled in Switzerland)
Accounting: double-entry bookkeeping required, including balance sheet, income statement, and notes
Auditor: ordinary audit required once 2 of 3 thresholds are met (CHF 20M balance sheet, CHF 40M revenue, 250 employees)

Advantages

Why Choose a Corporation

The SA/AG provides the ideal framework for ambitious companies and complex ownership structures.

Anonymity: shareholders are not published in the commercial register
Easy share transfers: shares are transferred by simple endorsement (registered) or delivery (bearer), with no mandatory approval
Attractive to investors: the standard structure for venture capital, private equity, and IPOs
Partial capital liberation: only CHF 50,000 is required at incorporation; the remainder can be called up later
Credibility: the SA/AG form is perceived as more prestigious by international partners and clients
Equity flexibility: preferred shares, participation certificates, and stock options are easy to implement

Disadvantages

Limitations of the Corporation

The Corporation imposes heavier requirements in terms of capital and governance.

High capital threshold: CHF 100,000 minimum (CHF 50,000 paid up) — a barrier for smaller ventures
Formal governance: mandatory board of directors with meeting minutes and annual general meetings
Formation costs: CHF 5,000 to 10,000 (notary, articles of association, commercial register, capital)
Double taxation: like the LLC, profits are taxed at the corporate level and dividends are taxed again personally
Administrative complexity: stricter reporting obligations and a risk of over-administration for small businesses
Incorporation timeline: 6 to 12 weeks on average

Comparison

SA vs Sàrl: side-by-side comparison

All the key criteria at a glance to help you decide.

Criterion	LLC (Sàrl)	Corporation (SA)
Minimum capital	CHF 20,000	CHF 100,000
Capital to pay up	100% (CHF 20,000)	Min. CHF 50,000 (or 20%)
Liability	✓ Limited to capital	✓ Limited to capital
Anonymity	✗ Members public in CR	✓ Shareholders anonymous
Management body	Manager(s)	Board of directors
Ownership transfer	Notarized deed + member approval	Simple endorsement or delivery
Min. number of founders	1	1
Commercial register	✓ Mandatory	✓ Mandatory
Auditor	Opt-out possible (< 10 employees)	Opt-out possible (< 10 employees)
Accounting	Double-entry bookkeeping	Double-entry bookkeeping
Formation costs	CHF 2,000 – 5,000	CHF 5,000 – 10,000
Incorporation timeline	4 to 6 weeks	6 to 12 weeks
Taxation	Corporate tax + dividend tax	Corporate tax + dividend tax

Taxation: Are SA and Sàrl Taxed Differently?

From a tax perspective, the SA and Sàrl are treated almost identically in Switzerland. Both are subject to:

Federal corporate income tax: effective rate of 8.5% on net profit
Cantonal and municipal profit tax: ranges from 3.5% to 14% depending on the canton
Capital tax: a tax on equity (cantonal rates vary)
Economic double taxation: profits are taxed at the corporate level, then dividends distributed to shareholders/members are taxed again as personal income

A Concrete Example

	LLC in Zurich	Corporation in Zurich
Net profit	CHF 100,000	CHF 100,000
Corporate tax (~19.7%)	– CHF 19,700	– CHF 19,700
Profit after tax	CHF 80,300	CHF 80,300
Dividend distributed	CHF 80,300	CHF 80,300
Dividend tax (~24% on 70%)	– CHF 13,490	– CHF 13,490
Net to the owner	CHF 66,810	CHF 66,810

Important: The total tax burden depends heavily on the canton. Zug, Nidwalden, and Appenzell Innerrhoden offer the lowest rates, while Vaud and Geneva are among the highest. The legal structure (SA or Sàrl) has no impact on the tax rate.

When the Corporation Has a Tax Advantage

The Corporation can be more tax-efficient in specific scenarios:

Retained earnings: if you reinvest heavily rather than distributing dividends, the Corporation's partial capital liberation reduces the capital tax burden
Succession planning: transferring shares is simpler and can be optimized for tax purposes
Holding structures: the Corporation is the standard vehicle for the participation deduction (Beteiligungsabzug)

For more on managing your VAT obligations in Switzerland, see our dedicated guide.

Practical Scenarios

Which Structure Fits Your Situation?

Every project is unique. Here are recommendations based on the most common profiles.

Solo Freelancer

Working on your own with annual revenue between CHF 100,000 and 500,000? The LLC (Sàrl) is ideal: affordable capital, simple management, and liability protection. It's the choice of most Swiss freelancers.

Startup with Investors

Planning a fundraising round, need to issue shares or stock options? The Corporation (SA) is the clear winner: streamlined share transfers, a structure investors recognize, and the option to go public down the road.

Partnership of 2–3 Professionals

Running a consultancy, agency, medical practice, or fiduciary firm? The LLC (Sàrl) is the best fit: simple shared management, mutual protection through ownership stakes, and low costs.

Family Business

Planning for generational succession? The Corporation (SA) simplifies inheritance thanks to the divisibility of shares and shareholder anonymity. For smaller family operations, the LLC remains the simpler option.

Holding / Real Estate

Setting up a holding structure or asset management vehicle? The Corporation (SA) is the standard: participation deduction, holding tax optimization, and simplified transfers.

Converting an LLC into a Corporation

Has your LLC outgrown its structure, and you're considering converting it into a Corporation? This is a common and well-regulated process under Swiss law (art. 54 of the Merger Act / LFus).

When to Consider the Conversion

You're preparing a fundraising round or bringing in outside investors
You want greater privacy around ownership
Your company has clearly outgrown the SME thresholds
You're planning to sell or transfer the business

Key Steps

Resolution: the members vote on the conversion at a general meeting (qualified majority of ⅔ of votes + absolute majority of capital)
Conversion report: a report explains the reasons, legal consequences, and how membership shares will be converted into stock
Audit: an auditor verifies that the conversion complies with the law
Notarized deed: a notary formalizes the conversion and the new articles of association
Commercial register: the change is published in the SOGC (Swiss Official Gazette of Commerce)

Estimated Costs

Item	Amount
Notary fees	CHF 2,000 – 5,000
Auditor fees	CHF 1,500 – 3,000
Commercial register filing	CHF 500 – 1,000
Capital increase (if required)	Variable
Estimated total	CHF 5,000 – 12,000

The conversion does not dissolve the company. The LLC continues to exist in the form of a Corporation, retaining all its rights and obligations. No tax is levied on the conversion itself, provided book values are maintained.

Accounting Obligations

SA and Sàrl: the Same
Accounting Requirements

Regardless of your structure, Swiss accounting requirements are identical. Here's what you need to know.

Double-Entry Bookkeeping

Mandatory for every SA and Sàrl. Each entry must be recorded as a debit and credit, with an annual balance sheet and income statement.

Annual balance sheet (assets and liabilities)
Income statement (revenue and expenses)
Notes to the annual financial statements
Record retention for 10 years

VAT and Invoicing

VAT registration is mandatory once annual revenue reaches CHF 100,000. QR invoices are the Swiss standard for all issued invoices.

Standard rate: 8.1%
Reduced rate: 2.6% (essential goods)
Quarterly or semi-annual filing
QR invoices required

Auditor

Both structures can opt out of an audit if they employ fewer than 10 full-time staff.

Limited audit: from 10 employees
Ordinary audit: once 2 of 3 thresholds are met
Opt-out: requires unanimous consent of all members/shareholders
Auditor must be licensed by the FAOA (Federal Audit Oversight Authority)

Magic Heidi

The Ideal Tool for Freelancers and Small LLCs

Magic Heidi is built for freelancers and small LLCs (Sàrl/GmbH) with a single director. Invoicing, VAT, and expenses — everything you need, day to day.

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Compliant QR Invoices
Create invoices with a Swiss QR code in 30 seconds. Fully compliant with Swiss legal requirements.
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Simplified Accounting
Track your income and expenses easily, with a clear journal and real-time financial overview.
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Automated VAT Management
Automatic 8.1% calculation and a VAT return ready to submit. Handles reduced rates and exemptions.
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AI Expense Tracking
Scan your receipts — AI extracts the amount, VAT, category, and supplier. Learn more.

Invoices

Invoice #3
Magic Heidi
CHF 500
Jan 29
Invoice #2
Webbiger LTD
CHF 2000
Jan 24
Invoice #1
John Doe
CHF 600
Jan 20

FAQ

Frequently Asked Questions: SA vs Sàrl

Can you form an LLC on your own?

Yes. Since the revision of the Code of Obligations, an LLC (Sàrl) can be founded by a single person (individual or legal entity). There is no minimum number of members. The same applies to the Corporation (SA): a single shareholder is sufficient.

What is the total cost of forming a Corporation?

Expect CHF 5,000 to 10,000 in formation costs (notary, commercial register, articles of association), plus at least CHF 50,000 in share capital to pay up. The total startup budget is therefore at least CHF 55,000 to 60,000.

Can you convert an LLC into a Corporation?

Yes, the conversion is governed by the Merger Act (LFus). It requires a qualified majority vote of the members, a conversion report, an auditor review, and a notarized deed. Total cost ranges from CHF 5,000 to 12,000.

Which structure for a non-Swiss resident?

Both forms require at least one representative (manager for the LLC, board member for the Corporation) to be domiciled in Switzerland. If you live abroad, you'll need to appoint a Swiss resident to that role. The Corporation offers more flexibility since its board can include multiple members.

Is an auditor required?

Not necessarily. Small LLCs and Corporations (fewer than 10 full-time employees) can opt out of an audit if all members or shareholders consent. Beyond 10 employees, a limited audit becomes mandatory.

What's the difference between LLC shares and corporate stock?

LLC shares (parts sociales) are registered, listed in the commercial register, and transferring them requires a notarized deed plus member approval. Corporate shares (actions) are freely transferable securities (unless restricted by the articles of association), are not published in the commercial register, and can be transferred by simple endorsement or delivery.

Which structure for raising capital?

The Corporation is clearly preferable. Professional investors (business angels, venture capital funds) almost always require an SA/AG because it allows standardized, easily transferable issuance of shares, participation certificates, and stock options.

SA or Sàrl for real estate?

For holding real estate, the Corporation is generally preferred thanks to shareholder anonymity and ease of transfer (selling shares rather than the property itself). Note: some cantons impose restrictions on foreign-owned real estate companies.

What accounting software for an SA or Sàrl?

Magic Heidi is built for freelancers and small LLCs in Switzerland. QR invoices, VAT management, and AI-powered expense tracking — all in one simple, affordable tool. For Corporations or businesses needing full double-entry bookkeeping, a dedicated solution like Bexio may be a better fit.

Manage Your LLC with Magic Heidi

Invoicing, VAT, and expenses — everything your small business needs, in one Swiss tool.

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