Share Capital in Switzerland: GmbH and AG Minimums

Share capital is the equity a company's owners commit to it at formation, and Swiss law sets a floor for each legal form. A GmbH needs CHF 20,000. An AG needs CHF 100,000. Those two numbers decide more than they look like they should: they shape which form is realistic for a given business, how much cash has to be in a Swiss bank account before the company legally exists, and how much of it can be put to work on day one.

The minimum for each form#

The figures come from the Code of Obligations and the commercial register enforces them at incorporation. There is no discretionary relief for early-stage companies.

The asymmetry in the second column is the part founders most often miss. A GmbH's capital has to be paid in full at incorporation, so CHF 20,000 is both the legal minimum and the cash requirement. An AG's capital only has to be half paid in, so a CHF 100,000 AG can be formed with CHF 50,000 actually transferred, leaving the balance as an obligation the company can call on its shareholders later.

That makes the practical cash gap between the two forms narrower than the headline figures suggest: CHF 20,000 against CHF 50,000, not CHF 20,000 against CHF 100,000. The uncalled half of an AG's capital is still a real liability, though, not a discount.

What "paid in" means in practice#

Before the company exists, it cannot hold a bank account in its own name. The standard route is a capital deposit account, sometimes called a blocked account, opened at a Swiss bank in the name of the company in formation. The founders transfer the capital in, the bank issues a confirmation that the money is there, and that confirmation goes to the notary and then to the commercial register.

The account is blocked in the sense that the money cannot be withdrawn while the company is still being formed. Once the register entry is made, the bank releases the funds into the company's ordinary account and the capital becomes working capital.

Two things follow from that which are worth budgeting for. The capital is unavailable for the whole of the formation period, so it cannot double as the money that pays the notary and register fees. And the release depends on the register entry, not on the transfer, so the funds stay locked for as long as the filing takes.

This is worth being clear about, because the phrase "minimum capital" makes it sound like a permanent reserve that has to sit untouched. It is not. The company can spend it on rent, salaries, equipment, and everything else a business spends money on. What the company cannot do is return it to the shareholders informally: paying capital back out is governed by the rules on dividends and capital reductions, not by shareholder preference.

Cash is not the only option#

Capital can be contributed in kind rather than in cash, for both forms. Equipment, intellectual property, real estate and an existing business can all be contributed, provided they can be valued and transferred to the company.

The constraint is documentation. A contribution in kind has to be supported by a valuation the register can rely on, rather than a figure the founders have chosen. This exists to protect creditors and later shareholders, who would otherwise be looking at a company whose stated capital was backed by assets worth a fraction of the number on paper. Cash contributions carry none of this friction, which is why most formations use cash even when the founders own contributable assets.

One detail that has changed and is still widely misreported: the nominal value of a GmbH share no longer has a CHF 100 floor. It can be set below one Rappen, so long as it is above zero. Older guides still cite the CHF 100 figure.

What the capital actually buys#

Two things, mostly.

The first is limited liability. Shareholders risk what they have contributed and, absent additional obligations written into the articles of association, are not personally liable for the company's debts. For a GmbH this follows directly from the requirement that the capital be fully paid in: there is no outstanding shareholder obligation for creditors to reach.

The second is proportional control. Capital contributions normally determine voting weight and profit share, so a member holding CHF 10,000 of a CHF 20,000 GmbH normally holds half the votes and half the dividend entitlement. Normally is doing real work in that sentence, because the articles of association can depart from the default in both directions. Founders who assume the capital table automatically equals the control table sometimes discover otherwise when they read their own statutes.

Choosing a figure above the minimum#

The statutory minimum is a floor, not a target, and setting capital at exactly the floor is a decision rather than a default.

A company capitalised at CHF 20,000 with a cost base that consumes that in three months is technically compliant and practically fragile. Swiss banks form a view about capital adequacy during onboarding, counterparties sometimes ask, and a company that has to be recapitalised in its first year has spent money on notary and register fees twice.

The useful exercise is not picking a number that sounds credible but setting the capital against the actual first year of costs: what the company will spend before it collects anything. If the minimum covers that with margin, the minimum is fine. If it does not, the gap has to be funded somehow, and share capital at formation is usually cheaper and simpler than a shareholder loan added later.

Changing the capital after formation#

The figure chosen at incorporation is not fixed for the life of the company, but the two forms change it by different routes, and the difference is routinely reported wrongly.

A GmbH increases its capital by a resolution of the members' meeting, an amendment to the articles of association and an entry in the commercial register. Every change goes through that sequence. It is a normal transaction rather than an exceptional one, but it is never free and it is never quick.

An AG can do something a GmbH cannot. Its articles may set a capital band, a margin fixed in advance within which the board of directors is authorised to raise or reduce the capital on its own, for a period of at most five years. Inside that band the board acts without convening the shareholders each time.

The capital band is an AG instrument. Guides that describe it as available to both forms are wrong: there is no equivalent in the law governing the GmbH, whose capital moves only by members' resolution. For a founder weighing the two forms, that flexibility belongs on the AG side of the ledger alongside the higher entry figure, not in a list of things both forms share.