Do I actually need a GmbH or is a sole proprietorship enough?

The practical answer for most solo freelancers in Switzerland: a sole proprietorship is enough. A GmbH only pays off once a clear threshold is crossed, not because "GmbH" sounds more professional.

When a GmbH actually makes sense

There are three clear thresholds. If none of them applies to you, don't start a GmbH.

1. Liability risk toward third parties. You produce a physical product, you sign off on safety certificates, you advise on large amounts of money, or you work in a field where a single mistake could cause damages above CHF 50,000. Here the share capital acts as a liability ceiling.
2. Multiple shareholders are joining. You're founding with a partner, or an investor is buying in with shares. A sole proprietorship can only belong to one person. A GmbH allows multiple shareholders and cleanly documented ownership stakes.
3. Sustained revenue clearly above CHF 150,000. At that level, tax optimization between salary and dividend becomes relevant, and you may pay less tax and AHV (AHV/OASI — Swiss social security) than as a sole proprietorship. Below CHF 150,000, the extra effort is almost always higher than the tax saving.

If you're working solo under CHF 100,000 in revenue and have no liability concerns, stay with the sole proprietorship. Our detailed guide on starting a sole proprietorship in Switzerland shows why this is almost always the right call. It saves money, saves bookkeeping, saves time.

Example: Picture Lara, a fictional web developer in Bern who has been running as a sole proprietorship for two years and will make roughly CHF 95,000 in revenue in 2026. A GmbH would cost her around CHF 800 to 1,200 extra per year (financial statements, taxes at the company level, possibly an audit), and the tax benefit would barely move the needle. She stays with the sole proprietorship and puts the CHF 1,000 into training instead of admin overhead.

Requirements for starting a GmbH in Switzerland

Before you book a notary, check the five requirements in the overview below. A single missing one stops the whole process.

Can I start a GmbH without CHF 20,000?

No. The CHF 20,000 share capital is legally required (Art. 773 OR) and must be fully paid in before entry in the Commercial Register. Switzerland has no "GmbH light", no "1-franc GmbH" and no "UG" like Germany. If you can't raise the share capital, start a sole proprietorship, which requires no minimum capital at all.

Important: the share capital isn't "gone". After incorporation it belongs to the GmbH and you can use it. You can pay for materials, software, marketing or your own salary from it. The money is working capital, not a fee.

What does starting a Swiss GmbH cost in 2026?

Costs vary a lot depending on whether you use an online incorporation package (standardized process, pre-negotiated notary fee) or go to a notary yourself (custom articles of association, freely negotiated fees). Both routes are legal and lead to the same GmbH. The full breakdown for both routes is in the tables below.

A warning about the sticker-price trap: the "from CHF 0" or "from CHF 290" advertising from online services only refers to the service fee. The Commercial Register fee (CHF 500 to 700, depending on the canton), the notarized signature with the notary public (CHF 20 to 50 per signature), and the bank fee for the capital deposit account (CHF 0 to 300) are always added on top. You can't haggle these costs away because they're set by the government or by law.

Second point on price transparency: NewCo.ch explicitly lists prices excluding VAT (8.1% gets added, so CHF 490 becomes CHF 530). Other providers aren't always as clear about whether their displayed prices include or exclude VAT. If you want to compare two offers directly, check that line in the order summary or terms.

The "CHF 0 service fee" packages aren't really free: Fasoon's Sorglos package, for example, requires you to open a UBS business account, take an insurance consultation with Baloise, and talk to Alptel about telecom costs. No obligation to buy, but you do have to take the calls. If you don't want that, you pay the full service fee.

The classic route with your own notary only pays off if you need custom articles of association (multiple shareholder groups, contributions in kind, special voting structures) or already have a notary you prefer. For a standard solo GmbH, the online package is almost always faster and cheaper.

What does a GmbH cost every year after incorporation?

Incorporation is the one-time hurdle. The ongoing costs differ a lot from a sole proprietorship, and that's exactly where most founders underestimate the workload.

• Double-entry bookkeeping: mandatory from day one (Art. 957 OR). If you do the books yourself, you save the fees, but you need real accounting software for Swiss self-employed people. If you hire a fiduciary, expect CHF 1,500 to 3,500 per year for a simple GmbH.
• Annual financial statements and balance sheet: must be prepared yearly and filed with the Commercial Register.
• Audit body: can be waived ("opting out") as long as the GmbH doesn't have more than 10 full-time positions on average per year. So for a solo GmbH, opting out almost always applies, which saves these costs.
• Profit tax: 8.5% at the federal level plus cantonal/municipal tax. In Zug roughly 11.8% total, in Bern roughly 21%, in Geneva roughly 14%. Plus capital tax on equity.
• VAT: same threshold as the sole proprietorship (CHF 100,000 in revenue). Above that you have to register. Our guide on VAT for freelancers explains the details.

Ready for a quick reality check? Before you go to the notary, run the first two years through concretely: share capital + incorporation costs + yearly bookkeeping + tax burden vs what you'd pay as a sole proprietorship. In most cases under CHF 150,000 in revenue, the sole proprietorship comes out clearly cheaper.

The cheapest online incorporation services compared

A fair overview of the best-known online services is in the comparison table below (prices as of May 13, 2026 pulled directly from each website). Note: service fee isn't total cost. Always add the Commercial Register fee (CHF 500 to 700), signature certification, and bank fees on top.

Step-by-step guide to starting a GmbH

Here's the concrete process for 2026. With an online package, the GmbH is often registered within two to three weeks. The classic route with your own notary takes four to six weeks. The five steps in detail are in the overview below.

How long does it take to start a Swiss GmbH?

Starting a GmbH in Switzerland usually takes four to six weeks, from drafting the articles of association to entry in the Commercial Register. With an online service and a fast cantonal processing time, two to three weeks is possible. The longest wait is the Commercial Register entry itself, which takes one to four weeks depending on the canton.

Taxes, liability, and what changes vs the sole proprietorship

This is where the real differences live, the ones you feel day to day. If you're starting a GmbH, you should have these three points straight before the money is wired in.

Who actually pays in a GmbH lawsuit?

In a GmbH, the company is liable with its own assets, so primarily the CHF 20,000 share capital and whatever the GmbH earns afterwards. Shareholders and managing directors don't usually have personal liability. This limited liability is the main advantage of the GmbH over a sole proprietorship.

But: in cases of breach of duty, personally signed bank guarantees, or unpaid tax and social security contributions, managing directors can still be held personally liable. "Limited liability" doesn't mean "no liability".

Taxes: the salary-dividend lever

This is the only real tax advantage of a GmbH. You can pay yourself a market salary (subject to AHV and income tax) and take the rest as a dividend (taxed at a reduced rate, because the money was already taxed at the company level). With enough profit, the total tax burden can be lower than for a sole proprietorship.

The catch: the tax office will check whether your salary is "in line with the market". If you pay yourself a CHF 30,000 salary and CHF 150,000 in dividends, the authorities will reclassify it after the fact. Realistically, the lever pays off from about CHF 150,000 in annual profit.

AHV and pension fund: a different status

As the owner of a sole proprietorship, you're self-employed. AHV contributions are based on your actual income, and the pension fund is voluntary.

As a managing shareholder of a GmbH, you're an employee of your own company for tax purposes. AHV runs through payroll, and pension fund contributions are mandatory once the BVG salary threshold is crossed. That's more administrative work, but it can bring advantages around sick pay, disability, and pension fund benefits.

Special case: starting a GmbH as a foreigner or without Swiss residency

Foreigners can start a Swiss GmbH, but there's one core rule: at least one managing director (or director) must have a place of residence in Switzerland. This residency requirement is in Art. 814 para. 3 OR. The four typical scenarios are in the overview below.

If you're a German, Austrian, or other EU national and want to use Switzerland purely as a mailbox, run it past a tax advisor first. The setup is legal, but rarely as advantageous as it looks at first glance.

After incorporation: what actually changes day to day

The deed of incorporation is signed, the Commercial Register entry is published, your GmbH exists. Now comes the part most guides skip: daily life.

Double-entry bookkeeping from day one

A GmbH has to keep double-entry books from the first business day (Art. 957 OR). That's not the "simplified bookkeeping" (the Swiss colloquial term for simplified single-entry bookkeeping) you might keep as a small sole proprietorship. You need accounts, journal entries, debits and credits, a chart of accounts, and annual financial statements with a balance sheet and income statement.

The good news: for a solo GmbH, modern software is more than enough. You don't need an accounting degree. Magic Heidi makes bookkeeping for Swiss self-employed people and small GmbH simple enough that you can run it yourself, without CHF 2,000 to 4,000 in yearly fiduciary fees.

Example: Picture Marc, a fictional IT consultant in Zurich who converted his sole proprietorship into a GmbH in 2025. He'd planned for "a bit more admin". In reality, he spent over twelve hours in the first two months on chart of accounts, opening balance sheet, and VAT registration. Only after switching to modern accounting software did the monthly workload drop to about an hour. His tip: don't try to start with Excel.

Invoices with VAT and QR code

As soon as your GmbH is running, you need invoices that meet Swiss requirements: registered office, UID number, invoice number, VAT breakdown (if VAT-registered), and a QR code for Swiss customers. A Swiss invoicing tool for self-employed people handles this automatically, with VAT calculations in the background.

Keep expenses cleanly separated from personal spending

In a sole proprietorship, the separation was loose. In a GmbH, it's strict. Business expenses can't run on your personal card without being properly reimbursed. Business meals, train tickets, software subscriptions, and supplies all need to be documented.

This is where AI-powered receipt scanning really helps. You take a photo of the receipt, the date, amount, VAT, and vendor are extracted automatically, and the receipt lands neatly categorized in your books.

What you have to do monthly, quarterly, and yearly

• Monthly: record receipts, reconcile your bank, pay yourself a salary (if you agreed on one), generate payroll if needed.
• Quarterly (if VAT-registered under the effective method): file VAT returns with the ESTV, settle input and output VAT.
• Semi-annually (if using the flat-rate VAT method): semi-annual VAT return.
• Yearly: prepare annual financial statements, hold and record the shareholders' meeting, file the balance sheet and income statement with the Commercial Register, file tax returns for both the company and yourself.

Reverse scenario: back to a sole proprietorship?

Here's a topic most guides skip because it doesn't fit the marketing message: you can convert a GmbH back into a sole proprietorship. It's called "conversion" and it's regulated by the Swiss Merger Act.

When does that make sense? You incorporated two years ago, but you're consistently below CHF 80,000 in revenue, the bookkeeping obligation is crushing you, and the tax benefit never materialized. In that case, winding down the GmbH and continuing as a sole proprietorship is more practical than burning CHF 2,000 per year on fiduciary and admin.

The process isn't trivial (liquidation, blocking period, tax consequences on the liquidation dividend), but it's legal and not uncommon. If you're considering it, get a tax ruling through a fiduciary first.

Bottom line: who should start a GmbH, and who shouldn't?

Starting a Swiss GmbH pays off mainly if you have a clear liability risk, multiple shareholders, or revenue well above CHF 150,000. For pure solo freelancers with low damage risk and moderate revenue, the sole proprietorship stays the faster, cheaper, and simpler solution. The most important points are in the overview below.

If you're still on the fence between sole proprietorship and GmbH, read our detailed guide on the sole proprietorship in Switzerland. If you decide on the GmbH and you're looking for accounting software built for Swiss self-employed people (not fiduciary software designed for 50-person firms), check out Magic Heidi with a free plan. We built Magic Heidi because we run our own Swiss company and couldn't find anything simple enough.

Whichever route you pick: make the decision with clear numbers, not the gut feeling that "GmbH sounds more professional". In Switzerland, both the sole proprietorship and the GmbH are solid legal forms. The right one is the one that fits your business, not the one that looks better on letterhead.

Sources and further reading: Swiss Code of Obligations (Fedlex) for the legal framework, KMU.admin.ch for the official federal view, EasyGov.swiss for the online incorporation process, ESTV for tax questions, and Zefix for the Commercial Register check.

Note: This article provides general orientation and doesn't replace individual legal or tax advice. For specific questions about your situation, talk to a fiduciary or lawyer.