Complete Guide

Solo GmbH Switzerland: Your Complete Guide to Single-Person Limited Companies

Running your business alone doesn't mean you can't have the protection and credibility of a proper company structure. Learn everything about forming a Solo GmbH—from CHF 20,000 capital requirements to liability protection and tax optimization.

Swiss Business Office

Running your business alone doesn't mean you can't have the protection and credibility of a proper company structure. A Solo GmbH (single-person limited liability company) combines the independence of solo entrepreneurship with the legal safeguards of incorporation—no partners required.

Since 2008, Swiss law has allowed a single person to establish a GmbH. This means you can be the sole shareholder, the managing director, and the only employee while still enjoying limited liability protection for your personal assets.

If you're earning over CHF 100,000 annually as a sole proprietor, considering bringing on partners eventually, or simply want to sleep better knowing your personal finances are protected from business risks, a Solo GmbH might be your next logical step.

Understanding Solo GmbH

What is a Solo GmbH?

A limited liability company founded and owned by a single person—giving you complete control with corporate protection.

Key Differences

Solo GmbH vs. Sole Proprietorship

Understanding these differences helps you decide when to make the transition.

FeatureSolo GmbHSole Proprietorship
Minimum CapitalCHF 20,000None
Personal Liability✓ Limited to company assets✗ Unlimited
Formation CostCHF 10,000+Under CHF 500
Commercial Register✓ MandatoryOptional under CHF 100k
Professional Image✓ Enhanced credibilitySmaller operation perception
Annual CostsCHF 5,000-10,000+CHF 1,000-3,000
Adding Partners✓ Simply issue new shares✗ Must restructure entirely
Transition Triggers

When Should You Form a Solo GmbH?

The decision comes down to three factors: revenue, risk, and ambition.

Revenue Threshold

The CHF 100,000 Question

Below CHF 100,000, sole proprietorship often makes sense. Above it, GmbH benefits start justifying the costs.

  • Under CHF 100k: Sole proprietorship usually sufficient
  • CHF 100k+: VAT registration required anyway
  • CHF 150k-200k: Most advisors recommend GmbH
  • Tax optimization alone can justify the structure
Revenue Analytics
Risk Assessment

What's at Stake?

Consider your personal exposure to business liabilities and potential claims.

  • Could you personally afford to repay your largest contract if something went wrong?
  • Do you carry inventory, equipment leases, or office commitments?
  • Are you in consulting, IT, construction, or fields with common liability claims?
  • Do you own a home or have significant savings you can't afford to lose?
Asset Protection
Growth Planning

Planning 2-3 Years Ahead

A Solo GmbH future-proofs your structure for opportunities that emerge.

  • Planning to hire employees in the near future
  • Might want a business partner eventually
  • Building something you could sell later
  • Want to attract investors or secure larger clients
Business Growth

Solo GmbH Legal Requirements
What Swiss Law Demands

Understanding the non-negotiable requirements before you start the formation process.

⚖️ Legal Compliance
🔒 Asset Protection
📝 Proper Documentation
✅ Official Registration
💰
CHF 20,000 Capital

Fully paid before registration—becomes your company's working capital

🇨🇭
Swiss Resident Director

At least one managing director must reside in Switzerland

📋
Commercial Register

Mandatory registration creating public record of your company

📊
Accounting Standards

Double-entry bookkeeping and annual financial statements required

The Formation Process: Your Step-by-Step Timeline

Forming a Solo GmbH typically takes 2-3 weeks. Here's exactly what happens:

Week 1: Preparation (3-5 days)

Choose your company name

  • Must include "GmbH" or regional variation ("Sàrl" in French, "Sagl" in Italian)
  • Must be unique and distinguishable from existing registered companies
  • Cannot mislead about your business activities or location
  • Check availability through your cantonal Commercial Register

Prepare founding documents

  • Articles of incorporation (Gesellschaftsvertrag/Statuts)
  • Shareholder resolution appointing directors
  • Declaration of acceptance by managing director(s)
  • Personal identification documents
  • Proof of registered office address in Switzerland

Week 2: Capital and Notarization (5-7 days)

Open capital deposit account

Visit a Swiss bank with your articles of incorporation draft. The bank opens a blocked account where you deposit the CHF 20,000. They issue a confirmation document needed for registration.

Notarization

Meet with a Swiss notary public to authenticate your founding documents. The notary verifies identities, witnesses signatures, and prepares the authenticated deed of incorporation.

Cost: CHF 1,500-3,000 depending on complexity and canton.

Week 3: Registration (5-10 days)

Submit to Commercial Register

The notary or your service provider submits all documents to your cantonal Commercial Register:

  • Authenticated articles of incorporation
  • Director declarations
  • Capital deposit confirmation
  • UBO (Ultimate Beneficial Owner) declaration
  • Extract of criminal record for directors (some cantons)

Registration fee: CHF 600 for Commercial Register entry.

Receive your registration confirmation

Once approved, you receive your UID (enterprise identification number) and official company registration. The capital deposit account is released and you can open a regular corporate bank account.

Formation Costs: What to Budget

Understanding the complete investment required to form your Solo GmbH.

Minimum Formation

CHF10,000/month
Basic formation costs
  • CHF 20,000 share capital (your company's funds)
  • CHF 600 registration fee
  • CHF 1,500 minimum notary fees
  • CHF 2,000 basic legal services
  • CHF 500 accounting setup
  • 2-3 week timeline
Learn More
Most Common

Typical Formation

CHF12,500/month
Standard professional formation
  • CHF 20,000 share capital (your funds)
  • CHF 600 registration fee
  • CHF 2,500 notary fees
  • CHF 3,500 legal and administrative
  • CHF 1,000 accounting and setup
  • Full support and guidance
Get Started

Full-Service Formation

CHF15,000/month
Comprehensive turnkey solution
  • CHF 20,000 share capital (your funds)
  • All registration and notary fees
  • Complete legal documentation
  • Banking relationship support
  • Tax advisory included
  • Fast-track 2-week formation
Contact Us
🛡️The CHF 20,000 capital becomes your company's money after registration—not a cost, but your starting working capital.
Ongoing Expenses

Annual Operating Costs: Budget Planning

Formation is one thing. Here's what you'll spend annually to maintain your Solo GmbH.

Total Annual Operating Cost Estimates

Minimal scenario (Swiss resident, small operation, audit opt-out): CHF 4,000-6,000

Typical scenario (moderate complexity, professional services): CHF 6,000-10,000

Foreign entrepreneur scenario (nominee director, full services): CHF 10,000-15,000

Compare this to sole proprietorship annual costs of CHF 1,000-3,000. The difference represents your investment in liability protection and professional structure.

Tax Structure

Understanding Tax Implications

A Solo GmbH faces different taxation than a sole proprietorship—here's what you need to know.

Corporate Profit Tax

12-25% Depending on Canton

Your GmbH pays corporate tax on profits before you take any personal income.

  • Lowest rates: Zug, Nidwalden, Lucerne (12-15% total)
  • Mid-range: Zurich, Bern, Aargau (16-19% total)
  • Highest: Geneva, Basel-City (22-24% total)
  • Every business expense reduces taxable profit
Swiss Tax Structure
Personal Income

Salary + Dividends Strategy

As managing director, you pay yourself a salary (taxed as income) and can take dividends (privileged taxation).

  • Salary counts as business expense (reduces corporate tax)
  • Must be reasonable market rate for your role
  • Requires social insurance contributions (AHV/IV/EO, pension fund)
  • Dividends taxed at reduced personal rates after corporate tax
Salary and Dividends Planning
VAT Registration

Mandatory Over CHF 100,000

Once annual revenue exceeds CHF 100,000, VAT registration becomes mandatory at 8.1% standard rate.

  • Already in Commercial Register makes VAT registration straightforward
  • Can reclaim VAT on business expenses
  • Quarterly or annual filing depending on volume
  • Professional bookkeeping essential for compliance
VAT Invoicing

Advantages of a Solo GmbH

A Solo GmbH offers significant advantages over sole proprietorship—but only when it makes sense for your situation.

🛡️

Limited Liability Protection

Personal house, car, savings protected if company faces debts or legal claims
⭐

Enhanced Professional Credibility

GmbH status signals you're serious, established, and planning long-term
💰

Tax Optimization Opportunities

Split corporate and personal tax, retain profits efficiently, time distributions strategically
🔄

Easy to Scale Later

Simply issue new shares to add partners or investors without restructuring
🏦

Pension & Social Insurance

Access to second pillar BVG benefits not available to sole proprietors
🌍

International Recognition

GmbH structure understood globally, easier for cross-border business
Important Considerations

Disadvantages and Honest Realities

Being transparent about the drawbacks and when Solo GmbH might not be right for you.

Need Help Deciding?

Every entrepreneur's situation is different. Get personalized advice for your specific circumstances.

Talk to Formation SpecialistCalculate Your Costs

Converting from Sole Proprietorship to Solo GmbH

Already operating as a sole proprietor? Here's how the transition works:

When to Make the Switch

Consider converting when:

  • Annual revenue exceeds CHF 100,000 consistently and VAT registration is required
  • You're signing larger contracts with liability exposure exceeding your personal assets
  • Clients request incorporation for vendor approval or professional requirements
  • You're planning to hire employees or bring in partners in the near future
  • Tax optimization would save more than the additional CHF 5-10k annual costs
  • You want stronger retirement planning through second pillar BVG enrollment

The Conversion Process

You don't technically "convert"—you form a new GmbH and transfer operations:

  1. Form the Solo GmbH following the standard 2-3 week formation process
  2. Transfer assets and contracts from sole proprietorship to the new GmbH entity
  3. Close the sole proprietorship by de-registering from Commercial Register (if registered)
  4. Update clients and suppliers with new company details and banking information
  5. Transfer banking and accounts to the new corporate entity

Tax Implications of Conversion

Transferring assets can trigger tax events:

  • Inventory and equipment: May need to be valued and transferred at fair market value
  • Goodwill and intangibles: Could create taxable gains if business value exceeds book value
  • Timing: Strategic timing can minimize tax impact by spreading across fiscal years

Work with a tax advisor to structure the transition tax-efficiently. Sometimes phasing the transition helps.

Timeline and Costs

Expect 4-6 weeks total:

  • 2-3 weeks for GmbH formation
  • 1-2 weeks for asset transfer and account updates
  • 1 week for final sole proprietorship closure

Costs include standard GmbH formation (CHF 10-15k) plus potential tax advisory fees (CHF 2-5k) for proper transition structure.

International Entrepreneurs

Foreign Entrepreneurs: Special Considerations

Non-Swiss residents can form a Solo GmbH, but face additional requirements.

Resident Director Requirement

Three Options for Foreign Founders

Swiss law requires at least one managing director with individual signatory rights who resides in Switzerland.

  • Option 1: Establish Swiss residency yourself (most straightforward)
  • Option 2: Hire nominee director service (CHF 3,000-10,000 annually)
  • Option 3: Partner with Swiss-resident co-director (requires trust and clear agreements)
  • The resident director ensures Swiss authorities can reach someone locally
Swiss Entrepreneur
Remote Formation

Can Be Done from Abroad

You don't need to travel to Switzerland for every step, though some visits help.

  • Documents can be notarized at Swiss embassies/consulates in your country
  • Some service providers handle entire process remotely with power of attorney
  • Banking may require personal visit (some banks allow remote account opening)
  • Budget 4-6 weeks for international formation vs. 2-3 weeks for residents
Remote Business Formation
Banking Challenges

Expect Stricter Requirements

Swiss banks have become more cautious about foreign-controlled companies.

  • More documentation required (proof of business activity, source of funds)
  • Potential in-person meetings in Switzerland for account opening
  • Higher fees for international business and cross-border transactions
  • Possible rejection from some banks—work with specialists who have relationships
Swiss Banking Requirements
Common Questions

Frequently Asked Questions

Can a foreigner own 100% of a Swiss Solo GmbH?

Yes, absolutely. Swiss law places no nationality or residency restrictions on shareholders. You can own 100% of the shares from anywhere in the world. The only requirement is having at least one Swiss-resident managing director with signatory rights.

How long does it take to form a Solo GmbH?

Typically 2-3 weeks for Swiss residents with straightforward situations. Foreign entrepreneurs should budget 4-6 weeks, especially if banking relationships or document authentication across borders adds complexity.

Can I work from home with a Solo GmbH?

Yes, but you need a registered business address in Switzerland for the Commercial Register. Many entrepreneurs use domiciliation services (CHF 1,000-5,000 annually) as their official address while working from home. This keeps your home address private and provides a professional business location.

What happens to my CHF 20,000 capital after formation?

It becomes your company's money. Once the Commercial Register approves your registration, the blocked account releases and you can transfer funds to your regular corporate account. Use it for any legitimate business expenses: equipment, marketing, working capital, or even your own salary as managing director.

Is Solo GmbH worth it for freelancers and consultants?

It depends on your revenue and risk profile. Below CHF 100,000 revenue, the costs often outweigh benefits unless you face high liability risk. Above CHF 150,000, most advisors recommend seriously considering it. Between CHF 100,000-150,000, evaluate your specific situation with an advisor who understands your industry.

Do I need to pay myself a salary?

If you're actively managing the company (which you are as managing director), you must pay yourself a reasonable market-rate salary. This salary counts as a business expense and requires social insurance contributions (AHV/IV/EO, pension fund). You can also take dividends from remaining profits, but active work requires salary compensation.

Can I change from Solo GmbH to regular GmbH later?

Absolutely. Simply issue new shares to additional shareholders when you want to bring in partners or investors. The legal entity remains the same—only the ownership structure changes. This flexibility is one key advantage of starting with GmbH structure even when operating solo.

What if my business fails? Am I personally liable?

Your maximum personal exposure is the CHF 20,000 share capital you invested during formation. Creditors cannot pursue your personal assets beyond this investment, assuming you operated the company properly, maintained proper books, and didn't engage in fraudulent activities or grossly negligent management.

Ready to Form Your Solo GmbH?

A Solo GmbH offers the protection of incorporation without requiring business partners. If you're generating CHF 100,000+ in revenue, facing meaningful liability risk, or planning for growth, it's worth serious consideration.

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Next Steps to Get Started

  1. Assess your situation: Review your revenue, risk exposure, and 2-3 year growth plans
  2. Calculate the costs: Compare total Solo GmbH expenses to your current sole proprietorship costs
  3. Consult a specialist: Speak with a formation advisor or tax professional about your specific circumstances
  4. Choose your canton: Research corporate tax rates and regulations where you plan to register
  5. Begin the process: Once decided, gather documents and start the 2-3 week formation timeline

Magic Heidi can help you navigate the entire Solo GmbH formation process, from initial assessment through Commercial Register entry and beyond. Our specialists understand the challenges solo entrepreneurs face and can simplify what seems complex.

Get personalized guidance for your Solo GmbH formation. Contact our specialists today to discuss your situation and receive a detailed cost estimate tailored to your canton and business needs.