When international entrepreneurs and established businesses consider entering the Swiss market, they face a fundamental choice between two dominant corporate structures: the Aktiengesellschaft (AG) and the Gesellschaft mit beschränkter Haftung (GmbH). Both offer limited liability and access to one of Europe's most stable legal and economic environments, yet they differ significantly in capital requirements, governance flexibility, and suitability for various business models. This guide examines the key distinctions between AG and GmbH in 2025, drawing on current Swiss Code of Obligations provisions and practical registration experience to help you make an informed decision. > "After two decades advising international clients on Swiss company formation, I've observed that the AG versus GmbH decision hinges on three factors: your capital availability, your growth trajectory, and whether you plan to raise external equity within the first three years. A GmbH suits closely held ventures and family businesses, while an AG opens doors to institutional investors and public markets." — Markus Pritzker, SwissFirma ## AG or GmbH? Key differences at a glance Before diving into detailed analysis, this table provides a quick reference for the fundamental distinctions between Switzerland's two primary corporate forms. Understanding these core differences will help you assess which structure aligns with your business objectives and capital constraints.

Comparison of AG and GmbH in Switzerland
Criterion	Aktiengesellschaft (AG)	Gesellschaft mit beschränkter Haftung (GmbH)
Minimum share capital	CHF 100,000 (min. CHF 50,000 paid-in at incorporation)	CHF 20,000 (fully paid-in at incorporation)
Liability	Limited to company assets; shareholders liable only to subscribed capital	Limited to company assets; members liable only to subscribed capital
Owner anonymity	Shareholders may remain anonymous in public register (registered shares); bearer shares abolished 2021	Members' names recorded in commercial register and publicly accessible
Governance organs	Mandatory board of directors (min. 1 member); shareholders' meeting	Managing director(s) (min. 1); members' meeting
Resident representation	At least one person domiciled in Switzerland with power of representation (single or joint) at board or authorized signatory level	At least one person domiciled in Switzerland with power of representation (single or joint) at management or authorized signatory level
Transfer of ownership	Shares freely transferable unless articles restrict; no notary required for registered shares	Quotas transferable via notarized deed and member consent (unless articles waive consent)
Audit regime	Ordinary audit if 2 of 3: balance sheet > CHF 20m, revenue > CHF 40m, > 250 FTE; limited audit otherwise; opt-out if < 10 FTE and unanimous consent	Ordinary audit if 2 of 3: balance sheet > CHF 20m, revenue > CHF 40m, > 250 FTE; limited audit otherwise; opt-out if < 10 FTE and unanimous consent
Reputation/prestige	Perceived as more established; standard for large enterprises and listed companies	Associated with SMEs, family businesses, and closely held ventures
Suitable for	Capital-intensive ventures, investor-backed startups, holding structures, companies planning IPO or international expansion	Small to medium enterprises, family businesses, service firms, startups with limited initial capital

## What does "AG" mean in Switzerland? Clarifying two meanings The abbreviation "AG" appears frequently in Swiss business contexts, yet it carries two distinct meanings that can confuse newcomers. Recognizing this duality is essential for accurate interpretation of company names, addresses, and legal documents.

Что означает AG в Швейцарии

"AG"

Abbreviation

Aktiengesellschaft

The legal entity (Stock Corporation).
Primary meaning.

Canton Aargau

Administrative canton code (e.g., on license plates).

### Aktiengesellschaft (AG) — stock corporation [Aktiengesellschaft (AG)](https://swissfirma.com/opening-swiss-corporation-aktiengesellschaft/) is Switzerland's stock corporation form, regulated by Articles 620–763 of the [Swiss Code of Obligations](https://www.admin.ch/opc/en/classified-compilation/19110009/index.html). An AG divides its capital into shares, which may be registered shares, and operates through a mandatory board of directors. The minimum share capital stands at CHF 100,000, with at least CHF 50,000 required to be paid in at incorporation. Shareholders' liability is limited to their subscribed capital, and the company enjoys separate legal personality. The AG structure suits businesses seeking to raise equity capital, issue different share classes, or prepare for public listing. At least one person domiciled in Switzerland with power of representation (single or joint) at the level of the board or as an authorized signatory must be appointed to ensure local representation and compliance with regulatory authorities. ### Gesellschaft mit beschränkter Haftung (GmbH) — limited liability company The Gesellschaft mit beschränkter Haftung (GmbH) is Switzerland's private limited liability company, governed by Articles 772–827 of the [Swiss Code of Obligations](https://www.admin.ch/opc/en/classified-compilation/19110009/index.html). A GmbH requires minimum share capital of CHF 20,000, which must be fully paid in at formation. Ownership is divided into quotas (Stammanteile) with nominal value, and members' liability is limited to the company's assets. Management is executed by one or more managing directors, at least one of whom must be a person domiciled in Switzerland with power of representation (single or joint) at the management level or as an authorized signatory. The GmbH offers greater governance flexibility than the AG, making it popular among small and medium enterprises, family businesses, and closely held ventures where members prefer direct involvement in management and tighter control over ownership transfers. {{cta:cta-1}} ## Detailed comparison of AG and GmbH: 8 key aspects for your decision Choosing between AG and GmbH requires evaluating multiple dimensions beyond capital requirements. The following sections examine governance, ownership transfer, anonymity, liability, reputation, taxation, and formation costs to provide a comprehensive decision framework. Information is based on the [Swiss Code of Obligations](https://www.admin.ch/opc/en/classified-compilation/19110009/index.html) and Federal Commercial Registry guidance as of 2025. ### Share capital and financial requirements: AG versus GmbH The AG mandates a minimum share capital of CHF 100,000, of which at least CHF 50,000 (or 20% of subscribed capital, whichever is higher) must be paid in at incorporation. The GmbH requires CHF 20,000 in share capital, fully paid in at formation. This fivefold difference in minimum capital directly impacts accessibility for startups and small businesses. For capital-intensive ventures or those planning to attract institutional investors, the AG's higher threshold signals financial substance and credibility. Conversely, the GmbH's lower barrier enables entrepreneurs to launch with limited initial funds while retaining full ownership and control.

Capital requirements: AG vs GmbH
Parameter	AG	GmbH
Minimum share capital	CHF 100,000	CHF 20,000
Minimum paid-in at registration	CHF 50,000 (or 20%, whichever higher)	CHF 20,000 (fully paid)

### Governance structure and director requirements An AG must establish a board of directors (minimum one member), with at least one person domiciled in Switzerland with power of representation (single or joint) at the board level or as an authorized signatory. The board appoints executive management and oversees strategic decisions, while the shareholders' meeting retains ultimate authority. A GmbH operates with one or more managing directors, at least one of whom must be a person domiciled in Switzerland with power of representation (single or joint) at the management level or as an authorized signatory. Members exercise control directly through the members' meeting, and the articles of association may allocate specific powers to directors or reserve decisions for members. This governance flexibility makes the GmbH attractive for owner-managed businesses where founders wish to retain hands-on control.

Структуры управления в AG и GmbH

Aktiengesellschaft (AG)

Shareholders' Meeting

Supreme Authority

MANDATORY

Board of Directors

Strategic Oversight

Min. 1 member

Executive Management

Statutory Auditors

GmbH (LLC)

Members' Meeting

Supreme Authority

Managing Director(s)

Direct Management

Min. 1 person

Statutory Auditors

(Often opted-out)

### Audit regimes (AG & GmbH): ordinary, limited, opt-out Both AG and GmbH are subject to the same audit requirements under Swiss law. Companies must undergo an ordinary audit if they meet two of the following three criteria: balance sheet total exceeding CHF 20 million, revenue exceeding CHF 40 million, or more than 250 full-time employees. Companies not meeting these thresholds are subject to a limited audit. Small companies with fewer than 10 full-time employees may opt out of audit requirements entirely if all shareholders or members unanimously consent.

Audit thresholds and requirements for AG and GmbH
Audit type	Criteria	Applicability	Source
Ordinary audit	2 of 3: balance sheet > CHF 20m, revenue > CHF 40m, > 250 FTE	Both AG and GmbH	Swiss Code of Obligations
Limited audit	Below ordinary audit thresholds	Both AG and GmbH	Swiss Code of Obligations
Opt-out	< 10 FTE and unanimous shareholder/member consent	Both AG and GmbH	Swiss Code of Obligations

### Shares (AG) vs. quotas (GmbH): transfer and publicity AG shares may be registered shares; bearer shares were abolished under the [Federal Act on Combating Money Laundering](https://www.admin.ch/opc/en/classified-compilation/19970427/index.html) in 2021. Registered shares transfer by entry in the share register, without notarial formality unless the articles impose restrictions. This ease of transfer facilitates equity financing and secondary market transactions. GmbH quotas, by contrast, require a notarized deed for transfer and typically necessitate member consent unless the articles waive this requirement. The transfer process for GmbH quotas is more cumbersome, reflecting the GmbH's character as a closely held entity where existing members retain influence over ownership changes. ### Owner anonymity and confidentiality AG shareholders holding registered shares are recorded in the company's share register, which is not publicly accessible; however, beneficial ownership information must be disclosed to authorities under AML/KYC regulations. GmbH members' names are entered in the commercial register and are publicly accessible, reducing confidentiality. For entrepreneurs prioritizing privacy, the AG's registered-share structure provides a degree of discretion, though full anonymity is no longer achievable under current Swiss law. Beneficial ownership thresholds (typically ≥25% ownership or control) and reporting timelines are governed by [FINMA guidance](https://www.finma.ch/en/) and the [Federal Act on Combating Money Laundering](https://www.admin.ch/opc/en/classified-compilation/19970427/index.html). ### Liability of founders and directors Both AG and GmbH shareholders/members enjoy limited liability: they are liable only to the extent of their subscribed capital, and personal assets remain protected from company creditors. Directors and managing directors, however, bear fiduciary duties and may incur personal liability for breaches such as failure to file for insolvency when the company is over-indebted, misappropriation of assets, or violations of statutory duties. Swiss law imposes strict standards on directors to ensure proper corporate governance and creditor protection, and directors may be held jointly and severally liable for damages resulting from negligent or intentional misconduct. ### Reputation and market perception The AG is perceived as the more prestigious and established corporate form, commonly used by large enterprises, listed companies, and international groups. Banks, investors, and business partners often view an AG as a signal of financial strength and long-term commitment. The GmbH, while equally legitimate, is associated with small and medium enterprises, family businesses, and service firms. For startups seeking venture capital or planning an eventual IPO, the AG structure aligns with investor expectations and facilitates equity issuance. For closely held ventures where reputation concerns are secondary to governance flexibility and cost efficiency, the GmbH suffices. ### Taxation: are there differences? Swiss corporate taxation applies uniformly to AG and GmbH: both pay federal corporate income tax (effective rate 8.5% on profit) plus cantonal and municipal taxes. Combined effective tax rates vary by canton and municipality, ranging from approximately 11.9% (e.g., Zug) to 21.6% (e.g., Bern). The choice between AG and GmbH does not alter the tax rate; however, dividend taxation introduces a layer of economic double taxation. Profits are taxed at the corporate level, and when distributed as dividends, they are taxed again at the shareholder level. Both AG and GmbH face this structure. Participation relief (reduction of withholding tax on dividends) applies when a shareholder holds at least 10% of the capital or shares worth at least CHF 1 million. Withholding tax on dividends is levied at 35%, but may be reduced under double taxation treaties (DTT). Tax planning should focus on cantonal selection, participation relief, and the balance between salary and dividends to optimize social security contributions and overall tax burden. ### Formation and ongoing administration costs GmbH formation typically costs less than AG formation due to lower notarial fees and simpler documentation. Notary fees for a GmbH range from approximately CHF 1,500 to CHF 3,000, plus commercial register fees of CHF 600, depending on the canton and complexity of the articles. AG formation involves higher notarial costs (CHF 3,000 to CHF 5,000) and register fees of CHF 600, reflecting the complexity of articles, capital verification, and board appointments. Annual administration costs also differ: companies subject to ordinary audit must appoint statutory auditors (audit fees from CHF 5,000 to CHF 20,000+ depending on size), while small companies with fewer than 10 full-time employees may opt out of audit if they meet exemption criteria. For cost-conscious startups, the GmbH offers a lower-cost entry point and reduced ongoing compliance burden. Additional costs include resident director services, legal address provision, and annual accounting and tax filing, which vary by service provider and canton.

Formation and annual costs: AG vs GmbH (indicative ranges)
Cost component	AG	GmbH
Notary fees	CHF 3,000–5,000	CHF 1,500–3,000
Commercial register fees	CHF 600	CHF 600
Resident director & legal address (annual)	CHF 2,000–5,000	CHF 2,000–5,000
Accounting & tax filing (annual)	CHF 3,000–10,000	CHF 2,000–8,000
Audit (if applicable, annual)	CHF 5,000–20,000+	CHF 5,000–20,000+ (if not opted out)

{{cta:cta-1}} ## Which form to choose: AG or GmbH? Selecting the appropriate corporate structure depends on your business model, growth plans, capital availability, and stakeholder expectations. The following scenarios illustrate when each form is preferable, helping you align your choice with strategic objectives and operational realities.

Strategic Decision Matrix

Select the profile that best matches your current situation.

Choose AG

High Growth

✓ Planning IPO or raising Venture Capital within 3-5 years.
✓ Need for anonymity (registered shareholders not public).
✓ Budget available > CHF 100,000 for capital & setup.
✓ Requires complex share classes (e.g., preferred shares).

Choose GmbH

Family / SME

✓ Self-funded or family business structure.
✓ Limited initial capital (min. CHF 20,000).
✓ Hands-on management owner control is preferred.
✓ Cost efficiency priority over prestige.

### Choose AG if you... - Plan to raise venture capital or prepare for an initial public offering within three to five years. - Operate in a sector where reputation and prestige are critical, such as finance, wealth management, or international consulting. - Require the ability to issue different share classes (e.g., preferred shares with liquidation preferences, convertible loans, or authorized capital) to attract institutional investors. - Intend to establish a holding structure for multiple subsidiaries or international operations. - Have access to CHF 100,000 in initial capital and can justify the higher formation and audit costs through anticipated growth and investor expectations. - Need to implement employee stock ownership plans (ESOP) or virtual stock option plans (VSOP), which are easier to structure under AG due to share class flexibility. ### Choose GmbH if you... - Launch a startup or small to medium enterprise with limited initial capital (CHF 20,000 fully paid). - Run a family business or closely held venture with a small number of partners who prefer direct management involvement. - Value governance flexibility and wish to avoid the formalities of a board of directors and mandatory audit (if you remain below audit thresholds and opt out with unanimous consent). - Do not plan to raise external equity from institutional investors in the near term. - Seek cost efficiency in formation and ongoing administration, prioritizing operational simplicity over prestige. - Prefer tighter control over ownership transfers through notarized deeds and member consent requirements. ## Company registration process in Switzerland: 5 main steps Registering an AG or GmbH in Switzerland follows a standardized procedure governed by cantonal commercial registers and federal law. Understanding these steps helps you plan timelines, budget costs, and coordinate with notaries, banks, and authorities. The process typically takes six to ten weeks from initial preparation to final registration.

Основные этапы регистрации компании

Preparation

Analyze needs & draft articles

Capital

Deposit funds to locked account

Notary

Sign Deed of Incorporation

Registry

Commercial Register Entry

VAT

Tax registration (if >100k rev)

**Step 1: [Document preparation](https://swissfirma.com/how-to-establish-a-business-in-switzerland/)** Draft the articles of association, incorporation agreement, and shareholder/member list. Collect identity documents and KYC materials for all founders and directors. Appoint at least one person domiciled in Switzerland with power of representation (single or joint) at the board/management level or as an authorized signatory. **Step 2: Capital deposit** Open a capital deposit account with a Swiss bank and transfer the minimum share capital (CHF 100,000 for AG, CHF 20,000 for GmbH). The bank issues a certificate of blocked capital, which is required for registration. For non-residents, KYC procedures (passport, proof of address, source of funds) and bank account opening can take 2–4 weeks, depending on the bank and completeness of documentation. **Step 3: Notarization** Founders and subscribers sign the deed of incorporation before a Swiss notary, who notarizes signatures and the incorporation act. The notary verifies compliance with statutory requirements and prepares the registration filing. For non-residents, a power of attorney (PoA) with apostille or legalization may be used to authorize a Swiss representative to sign on their behalf, facilitating remote incorporation. **Step 4: [Commercial register](https://swissfirma.com/company-formation-switzerland/) entry** The notary or legal representative submits the notarized documents, bank certificate, and KYC materials to the cantonal commercial register. The register reviews the filing and, if complete, issues a registration extract and UID number. Processing typically takes one to two weeks, depending on the canton. **Step 5: VAT registration** If your taxable turnover exceeds CHF 100,000 per year, you must register for VAT with the [Swiss Federal Tax Administration](https://www.estv.admin.ch/estv/en/home.html). Voluntary registration is possible below this threshold. VAT registration is completed after commercial register entry and bank account activation. The standard VAT rate is 8.1% as of 2025. ## Remote process & KYC/Banking For international entrepreneurs, incorporating an AG or GmbH remotely is feasible through the use of a power of attorney (PoA) with apostille or legalization, allowing a Swiss representative to sign incorporation documents on your behalf. E-notarization is not yet widely available in Switzerland, so physical notarization or PoA remains the standard practice. The KYC process for opening a capital deposit account and operational bank account requires submission of the following documents: passport or national ID, proof of address (utility bill or bank statement dated within the last three months), and source of funds documentation (bank statements, employment contracts, or business records). Capital deposit accounts are typically opened within 3–10 days of submitting complete KYC documentation, while operational bank accounts may take 2–4 weeks, depending on the bank's internal compliance procedures and the applicant's profile. Some Swiss banks and fintech providers (e.g., Neon, Raiffeisen, or international banks with Swiss branches) offer streamlined account opening for non-residents, though requirements and timelines vary. To increase approval rates, ensure all KYC documents are complete, translated into German, French, or English if necessary, and accompanied by a clear business plan and source of funds explanation.

KYC and banking timeline for non-residents
Step	Documents required	Typical timeline
Capital deposit account	Passport, proof of address, source of funds	3–10 days
Operational bank account	Passport, proof of address, source of funds, business plan, commercial register extract	2–4 weeks

{{cta:cta-1}} ## Help with company registration in Switzerland Navigating Swiss corporate law, notarial procedures, and banking requirements can be complex, especially for international entrepreneurs unfamiliar with local practices. SwissFirma offers end-to-end support for AG and GmbH formation, from initial consultation and document preparation to commercial register filing and VAT registration. Our team handles notarization, bank coordination, and [resident director services](https://swissfirma.com/swiss-directors/), ensuring a smooth and compliant registration process within six to ten weeks. **Need expert guidance?** Contact SwissFirma for a free consultation on AG or GmbH registration. Our specialists will assess your business model, recommend the optimal structure, and provide a transparent cost estimate. Disclaimer: This article provides general information on Swiss corporate law and does not constitute legal, tax, or financial advice. Consult a licensed Swiss attorney or tax advisor for guidance specific to your situation.

AG vs GmbH in Switzerland: which company form to choose in 2025?