Switzerland, with its strong and stable economy and low tax rates, has always been one of the ideal countries to set up a foreign company.  The Switzerland’s Constitution allows anyone, including a foreign company, to set up and operate a business in Switzerland.  Swiss business entities are governed by the Federal Civil Code of Switzerland; although, business are located in different Swiss cantons with their own Commercial Registers.  The forms of business entities in Switzerland include Stock Corporation, Limited Liability Company, General Partnership, Limited Partnership, and Sole Proprietorship.  In terms of offshore companies, however, there are two general types of offshore companies:  the stock or joint stock corporation and the limited liability company.

The stock or joint company is the preferred form of Swiss subsidiary by foreign investors.  A stock corporation in Switzerland is required to have at least three subscribers.  It is required to have an authorized capital share of at least 100,000 Swiss Francs, with 20% paid up capital.  The stock corporation can issue ordinary, preferred, voting, nonvoting, and bearer shares.  It is required, however, that the majority of the corporation’s directors must be citizens and residents of Switzerland.  All directors must be stockholders as well.  A stock corporation may be in the form of a holding company, domiciliary, auxiliary, service, mixed or a branch of a foreign stock corporation.

On the other hand, a limited liability company is a company which is formed when two or more companies or individual come together to form a new company.  This form of company is required to have a startup capital of at least 20,000 Swiss Francs, with 50% paid up capital before incorporation.  The quota holders of a limited liability company must state how much they invested in the company’s start up capital.  Establishing a limited liability company is less costly and complicated.  This is why this is the preferred Swiss subsidiary form of small and medium-sized foreign companies.