Switzerland Offshore Limited Liability (LLC) GMBH

Overview of a Swiss GMBH 

Switzerland is one of the most attractive places to open a company in Europe due to its stable economic conditions and highly developed financial systems. It has a very high standard of living, HDI, and has the second-highest GDP per capita, and is home to some of the most recognizable banks in the world including UBS and Credit Suisse.

Generally known for offshore banking and financial industry; it has also recently positioned itself for a hub for startups in the financial technology and cryptocurrency space.

Switzerland has several company formation structures with two standing out the most. The Swiss GMBH and the Swiss AG. While the Swiss Trust Company was once one of the most popular vehicles it has since not become worth the extra cost and has lost much of its prestige in the last decade.

Abbreviation GMBH stands for “Gesellschaft mit beschränkter Haftung” which means ‘Company with Limited Liability’ in German.

The Swiss GMGH is the equivalent of a Limited Liability Company (LLC) where members receive limited liability. The GMBH is the second most popular company formation structure, apart from the Swiss AG.

The incorporation and the administration is fairly simple and it is possible to start the company with only one founder/ shareholder.

The minimum contribution or paid-up capital required is 20,000 CHF (20,076 USD) and liability is limited to the contributions made by the members.

See here for more information on Switzerland as an Offshore Financial Centre.

Table of Contents:

• Overview of a Swiss GMBH 
• Advantages of a Swiss GMBH company
• Top Uses
• Key Corporate Features
• Requirements for Incorporation of a Swiss Entity
• Articles Of Association
• Taxation 
• Corporate Details of a Switzerland LLC

Advantages of a Swiss GMBH company

• 100% foreign ownership is possible
• Single-member ownership is permissible
• Limited Liability Company which means the liability is limited to the shareholder contributions
• Disclosure of beneficial owner is not required and is only confidentially disclosed to banks when opening an account due to KYC regulations 
• Annual audit is only required for larger companies meeting any two of the following criteria - CHF 40 Mio turnover, Assets CHF 20 Mio + or 250 Employees
• Highly developed financial system
• Access strong banking and investment options
• Asset protection possibilities
• Confidential banking and beneficial ownership (KYC and CRS regulations must be followed)
• Low corporate tax rates
• Double taxation treaties access (80 agreements have been signed)
• World-class banking and financial jurisdiction
• Strong reputation

Top Uses

• Family planning
• Collective investment vehicle
• Trading or Holding Company
• International Investment
• Company Tax planning vehicle
• Physical or non-physical holding

Key Corporate Features 

Requirements for Incorporation of a Swiss Entity

The requirements to form a Swiss GMBH are as follows:

• Personal details (proof of address, passport copy)
• All documentation for incorporation must be filed with ‘The Company Registry’.
• All signatures (both Personal and Corporate) must be signed in front of a public notary who will authenticate the Articles of Association and the Public Deed of Incorporation.

The entire application process can take from 3 to 5 business days.

Personal filings are not required and can be done via Express Mail

Articles of Association

The Swiss GMBH must prepare its Articles of Association including:

• Name of the Swiss GMBH
• Company's local address
• Purpose of incorporation
• Total share capital and total issued shares
• General and shareholders meetings prerequisites
• Appointment of auditors and administrators

Taxation 

The Swiss GMBH files its own tax return as a separate legal entity or Corporation.

After approval of registration by the Commercial Registry for corporate tax and VAT identity numbers. The Company must apply to the Federal Tax Administration.

Taxes are payable to the federal government and the canton in which one is registered. Each Canton has different Tax rates.

Given below are the federal and canton corporate tax rates and their ranges:

• Direct federal taxes on profits: 8.5%
• Cantonal tax on profits: 5.9% – 16%
• Cantonal tax on capital: 0.05% – 0.3%
• Total tax burden: 14.5% – 25%

The Value Added Tax (VAT) is 8% which is the lowest rate in Europe.

Corporate Details of a Switzerland LLC

Anonymity, Confidentiality and Disclosure

The details of the shareholders, directors as well as the company’s financial statements are publically accessible, and though the details of the beneficial owner are disclosed they are not made publically available. The disclosure of Beneficial owner is only to be made to banks when opening a bank account for Money Laundering checks

Liability

The liability faced by the Company is limited to its assets. Shareholders are only liable to the extent in which they have invested with the company and cannot be held personally liable for any legal action that is taken against the LLC

Required Capital

There Minimum capital requirement is 20,000 CHF

Financial Statements required

Financial statements are required to be maintained under the double-entry book-keeping system. A Balance Sheet and an operating profit and loss Account and an inventory must be maintained.

Powers of the Company

Provides members with a limited liability to which they are not held personally financially responsible for the losses of the company, and are liable only up to the amount held with the company.

Local Requirements

Yes, Directors must be local

Registered Office required

Yes, however, a virtual office can be registered 

Audit Requirements

Generally only for larger companies meeting any two of the following criteria - CHF 40 Million Turnover, Assets CHF 20 Million + or 250 Employees

Annual Reporting

Not required

Shelf Companies 

Shelf Companies are not readily available

Time required to form a GMBH company

1-2 weeks

Permitted limited liability suffixes

Name must include GMBH

Access to Double Tax Treaties

Yes Switzerland and the GMBH has access to 80 different Double Taxation Treaties with countries

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