Switzerland (Zug) GmbHFormation of Swiss Holding Company (GmbH) in Zug municipality
Switzerland is one of the most attractive jurisdictions for holding companies, granting special tax status in stable and reliable political and legal environment. Swiss GmbH can be formed by only one founding person or company, allowing 100% foreign ownership, with liability limited to the share capital.
Recurring Maintenance Fees as from the 2nd year - $7200
Please note: If applying for a corporate bank account you will need to order a full set of apostilled company documents if the account is opened outside of Switzerland.
Facts & Info for Switzerland (Zug) GmbH
There are two forms of companies in Switzerland most commonly used by foreign investors: Aktiengesellschaft-AG or Societe anonyme-SA-public stock corporation and Gesellschaft mit beschrankter Haftung-GmbH or Societe a responsabilite limitee-Sarl private limited liability company.
A Swiss Holding company is a parent corporation that owns shares in another company to control its policies and management. A Swiss Holding company may exist for the purpose of owning and managing long term financial investments in affiliated companies (e.g. real estate, patents, trademarks, stocks and other assets). The holding status and conditions of obtaining such status are recognized at a cantonal level.
Any name that is not registered with the Commercial Register may be chosen. Words such as Switzerland, International, European, etc. are subject to certain conditions. The name must end with suffix AG/SA or GmbH/SARL depending on the type of the company.
An organizational meeting of the shareholders is held during which the founders adopt the bylaws, subscribe to all the initial shares, elect the members of the initial board of directors and the auditors, and have the minutes of the meeting notarized. The company must be registered in the Commercial Register at the site of its headquarters. The headquarters site should also be specified in the bylaws. A registration application must be prepared and signed by all board members and signatories and sent to the Commercial Register together with the notarized minutes of the founders’ meeting and additional required information. This information includes the corporation’s legal address, a statement of acceptance of office and duties by the board members and auditors, disclosure of the nature of the initial capital contribution of the founders (whether in cash or in kind), major assets to be acquired and a statement of non-violation of the Statute on Acquisition of Real Estate by Foreigners. The corporation becomes a legal entity when it is entered in the Commercial Register.
At least 1 founder or shareholder is required and he can be resident of any country. Corporate shareholders are permitted, however offshore companies are undesirable. Details of the shareholders are part of public records.
GmbH/SARL companies are required to have a minimum share capital of CHF 20,000 that must be fully paid up in kind before incorporation. The nominal value per share is at least CHF 100.00. In case of a recapitalization, the nominal value can be reduced to CHF 1.00.The share capital is transferred to a blocked account at a Swiss bank and held in the name of the company until the company is registered. Bearer shares are not allowed.
DIRECTORS AND SECRETARY
GmbH/SARL – a minimum one director is required. At least one director must be a Swiss resident. Details of the directors are part of public records. Corporate Directors are not allowed. There is no requirement to have a secretary, however is it advisable for corresponding with government authorities.
All companies registered in Switzerland must have a registered address in Switzerland.
The management must prepare an annual report, providing information on the progress of business, the economic as well as the financial situation and any capital increases. The General Shareholder´s Meeting must be held at least once a year.
2-4 business weeks.
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
Annual fees are payable on the anniversary date of company incorporation.
- Provision of Registered office.
- Provision of Fiduciary Managing director
Switzerland is divided into 26 cantons, and each canton has its’ own tax system. In general, in Switzerland there is a three-level tax system:
1. At a federal level - the federal profit tax (3.63% - 9.8%) and taxes to export of the capital (35%);
2. On canton level - the basic profit tax (20% - 35%);
3. Communes assess incomes, basically in percentage terms from canton taxes. Depending on a kind of carried out activity, such as the company (holding, administrative and another) and canton where the company is registered, are applied various rates of taxes to incomes.
The Swiss tax system grants holding companies privileged tax status at the cantonal level, when the following three conditions are met:
1. The company articles must state that the main activity of the company is the long-term management of equity investments.
2. The company must not have any operating business activity in Switzerland. Certain activities are accepted, such as managing the company and its investments, providing services on behalf of the consolidated group, debt financing of subsidiaries, and/or the holding and exploitation of Intellectual Property.
3. In the long term, either the company’s participators must represent 2/3 of the assets in its balance sheet or the income derived from such participators (dividends/capital gains) must represent at least 2/3 of its total income. The shares of corporations, limited-liability companies and cooperatives, as well as certificates of participation are considered as participators.
Providing these conditions are met, the Swiss Holding Company would be exempt from cantonal tax in Zug (other cantons vary) and also would only pay a reduced rate of Capital tax at 2 per mille.
At the Federal level, income is subject to an effective tax rate of 7.83%. However, dividend income derived from and capital gains made on the disposal of qualifying participations are subject to a participation deduction, which generally results in a complete tax exemption.
The Canton of Zug has, with the revised tax law, further improved what were already attractive conditions for legal entities and has strengthened its position as the canton with one of the lowest tax costs. Companies active in the canton of Zug will continue to enjoy the attractive location benefits.
One decisive advantage of Zug as a business location is, that not only does it have low rates of taxation but uncomplicated, unbureaucratic communication between the cantonal tax authorities and the tax-payers.
TAXES ON DIVIDENDS & CAPITAL GAINS
A participation deduction provides relief from taxation on dividends received from qualifying participations. Qualifying participations are:
1. a participation of at least 10% of the equity (capital stock), OR
2. a participation with a market value of at least CHF 1 million.
For dividend income purposes, there is no holding period requirement.
A Swiss holding company is generally required to withhold 35% tax on dividends paid to its shareholders. Tax treaties, however, can reduce or eliminate the withholding tax on distributed dividends and Switzerland has an extensive double tax treaty network of more than 90 double tax treaties. Switzerland also has a bilateral agreement with the EU, giving access to the EU Parent/Subsidiary and Interest/Royalties Directives.
Withholding tax is reduced to zero on dividend distributions if the following conditions are met:
1. The parent company holds at least 25% of the Swiss subsidiary and has held this minimum percent for at least two years.
2. The shareholder company is based in the EU.
3. Both companies are subject to corporate tax and both are limited company structures.
The participation deduction for dividends discussed above is also valid for capital gains on the sale of the qualifying participations. The participation sold has to represent at least 10% of the company’s equity (capital stock) and has to be held for a least one year prior to the sale.
AUDIT AND FINANCIAL RETURNS
All Swiss companies are required to keep accounts and to submit financial statements in accordance with the rules laid down in the Code of Obligations (Art. 957). Elected by the shareholders’ meeting, the auditors can either be an independent person or a company and must be domiciled in Switzerland. The auditors, which should be independent of the company, examine the books and the annual financial statements in order to submit their report at the shareholders’ meeting. Accounts must be filed each year with the Commercial Register.
Holding companies which, by means of majority voting rights or in some other way, exercise control over one or more other companies and which, in addition, meet two of the following criteria – total assets of more than CHF 10 million, turnover of more than CHF 20 million or more than 200 employees – are obliged to prepare consolidated financial statements each year.
OUR SERVICES FOR THE COMPANY FORMATION IN SWITZERLAND INCLUDE:
- Name check and approval
- Provision of business address including mail forwarding for one year
- Opening of account for depositing of share capital
- Drafting Notarial Deed
- Registering Notarial Deed with the Commercial Register
- Payment of the Commercial Register fees
- A standard set of original corporate documents in German language:
- Memorandum & Articles of Association
- Extract from Register
- Register of shares
- Copies of share certificates
- Rubber stamp
DOCUMENTS REQUIRED FOR THE COMPANY FORMATION
Please provide the following documents for all Directors, Shareholders, Beneficial Owners, Authorized Signatories:
- Notarized copy of valid passport.
- Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within 3 months).
- Original or certified copy of Banker’s reference letter (dated within 3 months).
- In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and Certificate of Good Standing (for companies registered more than 1 year).
IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES
If you conduct any activity without required license or authorization granted by a relevant authority in any jurisdiction, Agent Legal will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.
Licensable activities include, but not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking business; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.
Please contact us if you need our assistance in licensing of your financial, Forex brokerage or gambling company.
Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to the invoice during checkout. Shipping costs for international courier services are set automatically and can vary from USD 75 to USD 95. The fees depend on the jurisdiction of your ordered company, the country where the bank is based as well as your destination country.