Setting up an LLC in Switzerland: costs and legal steps

Setting up an LLC (limited liability company) in Switzerland is an attractive option for entrepreneurs who want to limit their liability. In contrast to a sole proprietorship, the LLC requires a minimum capital and several legal steps that must be followed.

If the LLC is not the right legal form for your needs, you should also find out about the costs and steps involved in setting up a PLC or sole proprietorship.

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1. Costs of setting up an LLC

1.1. Minimum capital of CHF 20'000

The minimum capital required to establish an LLC is CHF 20'000. This capital is paid into a blocked account during the process of setting up the LLC and can be used for business purposes after the LLC is set up and/or as soon as the company is entered in the commercial register.

1.2. Notary fees

The formation of an LLC requires a notarized certificate of incorporation and statutes. Depending on the canton and the scope of the documentation, notary fees can range from CHF 500 to CHF 2'000.

1.3. Entry in the commercial register

The LLC must be entered in the commercial register. This step is associated with fees that vary from canton to canton, but usually range from CHF 500 to CHF 700.

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2. Ongoing costs of an LLC

2.1. Social security for managing directors

The LLC is obliged to make social security contributions, including:

• AHV/IV/EO (Old-age and Survivors' Insurance, Disability Insurance, Income Compensation): These contributions are mandatory and amount to around 10-11% of the  salary.
• Pension fund: If you employ yourself or your employees, you are obliged to pay into a pension fund. Contributions depend on income and the respective pension fund.

2.2. Insurance for the LLC

In addition to social security, you should consider taking out further insurance:

• Professional liability insurance: To protect the company from third-party claims, you should take out liability insurance. Depending on the industry and risk factors, this costs around CHF 1'000 to 5'000 per year.
• Accident insurance: You are obliged to take out accident insurance for yourself and your employees.

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3. Legal steps for setting up an LLC

3.1. Drawing up the articles of association

The LLC's statutes are the central document when setting up an LLC. The statutes must be notarized and contain important information such as the company name, registered office, corporate purpose and the amount of the share capital.

3.2. Opening a blocked account

Before registering in the commercial register, the shareholders must deposit the share capital in a blocked account at a Swiss bank. The blocked account will only be released after the LLC has been registered.

3.3. Registering with the commercial register

After the statutes and the certificate of incorporation have been drawn up and the minimum capital has been paid in, you must register the LLC with the commercial register. The entry will be made after the documents have been checked and the corresponding fees have been paid.

3.4. Value added tax (VAT)

If your LLC generates an annual turnover of more than CHF 100'000, you must register with the Federal Tax Administration (FTA) for VAT. Registration should be done promptly to avoid back payments later on.

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4. Completing the formation

4.1. Tax obligations

As an LLC, you are required to file a tax return annually and to keep your business records properly. The LLC is subject to tax, and both profit taxes and value added taxes apply if the turnover limit is exceeded.

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4.2. Accounting and annual financial statements

In contrast to a sole proprietorship, an LLC is required to maintain double-entry books and prepare annual financial statements. You must prepare both a balance sheet and an income statement that can be audited by an accountant or auditor.

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4.3. Incorporation with Startups.ch

If you want to simplify the incorporation process, Startups.ch offers professional support to meet the legal requirements and administrative hurdles. Our service guides you safely through every step.

Incorporating an LLC in Switzerland involves higher costs and more administrative hurdles than setting up a sole proprietorship, but offers the major advantage of limited liability. From notary fees to social security administration, it is important to know the legal and financial requirements in order to set up a LLC successfully.

Do you want to set up your LLC efficiently and securely? Startups.ch supports you through all legal and administrative steps and offers a smooth setup process.

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