Starting a Limited Liability Company (GmbH/Sàrl) in Switzerland? Get the full breakdown on costs, timeline, requirements, and whether it's the right choice for your business.
Starting a Limited Liability Company (LLC) in Switzerland offers liability protection and professional credibility—but it's not right for everyone. This guide walks you through exactly when an LLC makes sense, what it costs, and how to form one in 2026.
Quick facts: You'll need CHF 20,000 in capital, about 3 weeks for formation, and a realistic budget of CHF 1,100-5,000 in formation costs. If those numbers make you hesitate, read on—we'll help you decide if an LLC is worth it for your business.
A Swiss Limited Liability Company—called GmbH in German, Sàrl in French, and LLC in English—is a business structure that protects your personal assets from business debts.
Key characteristics:
Unlike a sole proprietorship where you and your business are one legal entity, an LLC separates your personal finances from business obligations. Your car, house, and savings account are protected if the business fails.
The tradeoff? Double taxation and higher administrative costs. We'll break down whether that's worth it for your situation.
Here's the decision framework most Swiss entrepreneurs use to pick the right business structure.
| Factor | Sole Proprietorship | LLC (GmbH/Sàrl) | AG (Corporation) |
|---|---|---|---|
| Minimum capital | None | CHF 20,000 | CHF 100,000 |
| Formation cost | CHF 0-500 | CHF 1,100-5,000 | CHF 5,000-15,000 |
| Formation time | 1-2 days | 3 weeks | 4-6 weeks |
| Personal liability | Unlimited | Limited to capital | Limited to capital |
| Taxation | Once (personal income) | Twice (company + personal) | Twice (company + personal) |
| Professional image | Moderate | High | Very high |
| Annual costs | CHF 2,000-8,000 | CHF 15,000-70,000 | CHF 25,000-100,000+ |
| Best for | Freelancers, consultants | Growing businesses, partnerships | Investors, scaling companies |
Choose a sole proprietorship if: You're a freelancer earning under CHF 100,000 annually, don't have business partners, and want minimal administrative burden.
Choose an LLC if: You're earning CHF 100,000-500,000 annually, want liability protection, have partners, or plan to reinvest profits in the business.
Choose an AG if: You need investor funding, plan rapid expansion, or expect annual revenue above CHF 500,000.
An LLC isn't just about legal structure—it's a business decision. Here are scenarios where it typically pays off.
The formation process takes approximately 3 weeks and involves six key steps.
Your LLC name must include 'GmbH,' 'Sàrl,' or equivalent, be unique, and not mislead about your business activity.
The statutes are your company's constitution and must include specific legal requirements.
Deposit your CHF 20,000 share capital in a Swiss bank escrow account.
A Swiss notary must authenticate your incorporation deed with all members present.
Submit all documents to your canton's commercial register for official approval.
Complete essential registrations and open your business bank account.
The CHF 20,000 capital requirement gets all the attention, but here's what you'll actually spend.
CHF 24,000-26,000 total. Digital formation service, self-service tax setup, minimal consulting.
CHF 28,000-33,000 total. Traditional notary, fiduciary setup support, tax advisor guidance.
CHF 35,000-40,000 total. Full-service formation, legal review, business plan development, advanced tax structuring.
This is the biggest drawback of an LLC: you're taxed twice on the same money. But smart structuring can minimize the impact.
1. Company level: Your LLC pays 11.85%-21.6% on net profit (varies by canton)
2. Personal level: You pay income tax on:
Savings: CHF 4,000 (5.8% improvement)
Important: Work with a Swiss tax advisor to structure this correctly. Overly aggressive salary reductions can trigger tax authority scrutiny.
Understanding what you gain by choosing the LLC structure over sole proprietorship.
Your personal assets are completely separate. If your LLC has CHF 50,000 in debts and CHF 10,000 in assets, creditors cannot touch your personal savings, home, or car.
'GmbH' or 'Sàrl' on your business card signals stability and commitment. Many corporate clients and government contracts require vendors to be registered companies.
Transfer shares, add partners, or plan succession without liquidating the business. Clear valuation and minority shareholder protections built into Swiss law.
When you eventually sell your LLC shares, the capital gain is tax-free for individuals. Build a business worth CHF 500,000 and sell it—you keep the entire profit.
Swiss law allows one-person LLCs since 2008. Perfect for solo entrepreneurs who want liability protection without partners.
Be realistic about these drawbacks before committing to the LLC structure.
All LLCs must maintain proper books, regardless of revenue. Here's what that means at different business stages.
Double-entry bookkeeping, annual financial statements, 10-year document retention, monthly bank reconciliation required.
Simplified cash-basis accounting allowed. Record income when received, expenses when paid. Still requires proper categorization.
Accrual accounting mandatory. Record income when earned, expenses when incurred. Track receivables and payables.
Professional fiduciary service (CHF 8,000-15,000/year), limited audit (CHF 3,000-8,000/year), specialized tax advisory needed.
VAT adds another layer of compliance, but it's not always mandatory.
Required:
Optional:
Quarterly filing (most LLCs):
Magic Heidi tip: Our VAT management tool automatically calculates your quarterly obligation based on categorized transactions. No spreadsheets needed.
Sale to customer: CHF 10,000 + CHF 810 VAT = CHF 10,810 total
Debit: Accounts Receivable CHF 10,810
Credit: Revenue CHF 10,000
Credit: VAT Payable CHF 810
Purchase from supplier: CHF 2,000 + CHF 162 VAT = CHF 2,162 total
Debit: Expenses CHF 2,000
Debit: VAT Recoverable CHF 162
Credit: Accounts Payable CHF 2,162
Net VAT owed to government: CHF 810 - CHF 162 = CHF 648
Learn from these frequent errors that trip up new LLC founders.
Average 3 weeks from starting the process to commercial register approval. Express services can reduce this to 5-7 days for an additional fee.
Yes, but you must have at least one managing director who is a resident of Switzerland (Swiss citizen or valid work permit holder).
It's deposited in an escrow account during formation, then released to your business bank account after commercial register entry. You can immediately use it for business expenses.
Yes, if your home address is suitable for commercial registration. Some landlords prohibit this in rental contracts, and some activities (retail, customer visits) may violate residential zoning.
Not legally required, but practically necessary for most LLCs. Accrual accounting, VAT filing, and annual financial statements are complex. Budget CHF 5,000-12,000/year minimum.
Yes, by updating your commercial register entry. You can preserve business history and client relationships while gaining limited liability protection.
You lose your CHF 20,000 investment, but personal assets are protected. The LLC goes through liquidation, creditors are paid from available assets, and remaining debts are written off.
Yes, but check your employment contract for non-compete clauses. You'll need time to manage the LLC properly—most fail when treated as side projects.
An LLC makes sense when liability protection and professional credibility justify the higher costs and administrative burden. For most entrepreneurs, that threshold is around CHF 100,000 in annual revenue or when taking on significant business risk.
Once your LLC is registered, Magic Heidi's accounting platform integrates with your Swiss bank account to:
You focus on growing your business—we handle the compliance complexity.
Legal disclaimer: This guide provides general information about Swiss LLC formation. Consult a licensed Swiss attorney and tax advisor for advice specific to your situation. Laws and regulations change—verify current requirements before making decisions.