Swiss Share Capital Requirements: AG and GmbH

Share capital requirements are among the most consequential decisions in Swiss company formation. The amount and structure of a company’s capital affect not only its legal standing and regulatory obligations but also its credibility with banks, investors, and commercial counterparties. This guide provides a comprehensive overview of the capital framework for Switzerland’s two principal corporate forms — the AG and the GmbH.

AG (Aktiengesellschaft) Capital Requirements

Minimum Share Capital

The minimum share capital for an AG is CHF 100,000. This is divided into shares, each with a minimum nominal value of CHF 0.01 (one centime). At incorporation, at least 20% of the nominal value of each share must be paid in, but the total amount paid in must be at least CHF 50,000.

Practical example: A founder establishing an AG with CHF 100,000 in share capital divided into 100,000 shares of CHF 1.00 each must pay in at least CHF 50,000. The remaining CHF 50,000 represents a callable commitment that the board may demand at any time.

Forms of Capital Contribution

AG share capital may be contributed in three forms:

Cash Contributions (Barliberierung)

The most common method. Founders deposit the capital into a blocked account at a Swiss bank before notarisation. The bank issues a capital deposit confirmation (Kapitaleinlagebestätigung), which the notary requires for the incorporation deed.

Contributions in Kind (Sacheinlage)

Non-cash assets — such as real estate, intellectual property, machinery, or receivables — may be contributed as share capital. This requires:

• An independent valuation confirming the assets are worth at least the nominal value of the shares issued
• A special incorporation report (Gründungsbericht) prepared by the founders
• An auditor’s confirmation (Prüfungsbestätigung) of the valuation
• Disclosure in the articles of association

Set-off Against Claims (Verrechnungsliberierung)

If a founder holds a claim against the company (e.g., a pre-existing loan), the claim may be set off against the capital obligation. This requires the claim to be fully recoverable and properly documented.

Share Classes

An AG may issue multiple classes of shares with differing rights:

• Registered shares (Namenaktien): Transferable by endorsement and registration in the share register. The articles may impose transfer restrictions (Vinkulierung).
• Bearer shares (Inhaberaktien): Since the 2019 GAFI Act implementation, bearer shares are effectively eliminated for private companies. Bearer shares may only exist if the company is listed on a stock exchange or if they are structured as book-entry securities held by an intermediary.
• Participation certificates (Partizipationsscheine): Carry economic rights (dividends, liquidation proceeds) but no voting rights. Useful for raising capital without diluting control.
• Preference shares (Vorzugsaktien): May carry enhanced dividend rights or liquidation preferences.

Authorised and Conditional Capital

The AG structure permits two mechanisms for future capital increases without requiring a fresh shareholders’ resolution each time:

• Authorised capital (genehmigtes Kapital): The shareholders’ meeting may authorise the board to increase share capital by up to 50% of the existing capital within a two-year period. This is commonly used by startups anticipating fundraising rounds.
• Conditional capital (bedingtes Kapital): Share capital is increased automatically upon the exercise of conversion or option rights (e.g., employee stock options or convertible bonds). Limited to 50% of existing capital. This is the standard mechanism for equity compensation programmes.

GmbH Capital Requirements

Minimum Share Capital

The minimum share capital for a GmbH is CHF 20,000, which must be fully paid in at incorporation. The capital is divided into quota shares (Stammanteile), each with a minimum nominal value of CHF 100.

Practical example: A GmbH with CHF 20,000 capital might issue 200 quota shares of CHF 100 each, or 20 quota shares of CHF 1,000 each.

Full Payment Requirement

Unlike the AG, where partial payment is permitted, GmbH founders must pay in the full CHF 20,000 at formation. This can be in cash or through contributions in kind (subject to the same valuation requirements as for an AG).

Quota Share Features

GmbH quota shares differ from AG shares in several important ways:

• Each quotaholder’s name and contribution amount are recorded in the commercial registry, making ownership a matter of public record.
• Transfer of quota shares requires a written assignment agreement and, unless the articles provide otherwise, the approval of the members’ meeting.
• Additional payment obligations (Nachschusspflichten) may be imposed on quotaholders through the articles of association, up to a specified maximum. This allows the company to call on members for additional capital without a formal capital increase.

Capital Bands (Kapitalband)

Following the 2023 corporate law reform, both AGs and GmbHs may implement a capital band, allowing the board to increase or decrease share capital within a range of +/- 50% of the existing capital over a five-year period without requiring a shareholders’ resolution for each adjustment. This provides significant flexibility for growing companies.

Capital Increase Procedures

Ordinary Capital Increase (AG and GmbH)

A standard capital increase requires:

1. Board proposal to the shareholders’ meeting
2. Shareholders’ resolution (public notarisation required)
3. Amendment to the articles of association
4. Subscription and payment by new or existing shareholders
5. Board confirmation and auditor’s report
6. Registration with the commercial registry

The entire process typically takes three to six weeks.

Capital Reduction

Capital reductions are less common but may be necessary for restructuring or to return excess capital to shareholders. The process requires:

1. Shareholders’ resolution
2. Publication of a creditor call (Schuldenruf) in the Swiss Official Gazette of Commerce (SHAB) — three consecutive publications
3. A waiting period of at least two months after the last publication
4. Satisfaction or security of any creditors who come forward
5. Auditor confirmation
6. Registry amendment

Practical Considerations

How Much Capital to Start With

While the legal minimums are CHF 100,000 (AG) or CHF 20,000 (GmbH), many businesses start with higher amounts for practical reasons:

• Banks may be reluctant to extend credit to companies with minimal capitalisation.
• Clients and suppliers may assess the company’s registered capital as a measure of financial substance.
• Operational needs: The minimum capital should cover at least six to twelve months of projected operating expenses.
• Regulatory requirements: Certain industries (e.g., staffing agencies, real estate brokers) may have specific capital requirements beyond the statutory minimums.

Currency

Share capital must be denominated in Swiss francs (CHF). However, the 2023 corporate law reform permits AG and GmbH companies to keep their accounts in a foreign currency (EUR, USD, GBP, or JPY) if this is the functional currency of the business. The share capital itself remains in CHF.

Capital Maintenance Rules

Swiss law imposes strict rules on maintaining share capital:

• Dividends may only be paid from distributable profits, not from share capital.
• If losses consume more than half of the share capital and legal reserves, the board must convene an extraordinary shareholders’ meeting.
• If the company is over-indebted (assets insufficient to cover liabilities), the board must notify the court.

For more on dividend distribution rules, see our dedicated guide.

Stamp Duty

The issuance of shares (at formation or upon a capital increase) is subject to federal stamp duty (Emissionsabgabe) at a rate of 1% on contributions exceeding CHF 1 million. A franchise of CHF 1 million applies, meaning most small company formations are exempt.

Donovan Vanderbilt is a contributing editor at ZUG BUSINESS. This article is informational and does not constitute legal, tax, or financial advice.