Choosing between an AG and a GmbH is one of the most important decisions when setting up a company in Switzerland. Both legal forms offer liability protection but differ in capital requirements, governance and flexibility. Understanding these differences is critical before you visit the notary and file for registration in the Handelsregister (commercial register).
AG (Corporation)
The AG requires a minimum share capital of CHF 100,000, of which CHF 50,000 must be paid in at formation. Shares can be issued as bearer or registered shares. The AG is governed by a board of directors (Verwaltungsrat), which must include at least one member domiciled in Switzerland. For larger e-commerce businesses planning to attract investors or eventually go public, the AG is the preferred legal form. Share transfers are straightforward, making the AG particularly flexible for ownership changes.
AG Formation Process
Formation requires public notarization (öffentliche Beurkundung). The AG is then entered into the cantonal commercial register and published in the Swiss Official Gazette of Commerce (SHAB). The entire process typically takes two to four weeks depending on the canton. Formation costs range from CHF 3,000 to CHF 6,000 including notary fees and registration.
GmbH (LLC)
The GmbH requires a minimum capital of CHF 20,000 which must be fully paid in. All partners are registered in the commercial register, providing full transparency over the ownership structure. The GmbH is particularly suitable for SMEs and startups with a manageable partner structure. Under the Swiss Code of Obligations (OR/CO), at least one managing director must be domiciled in Switzerland.
GmbH Advantages for E-Commerce
The lower capital threshold makes the GmbH ideal for online sellers looking to sell on Digitec Galaxus, Ricardo.ch or Amazon.de. Administration is leaner than with an AG, and formation costs typically range from CHF 2,000 to CHF 4,000 including notary fees and commercial register entry. The GmbH also offers full liability protection, meaning personal assets of the partners are shielded from business debts.
Tax Aspects
Both legal forms are subject to profit tax at federal and cantonal levels. The effective tax rate varies between 11.9% and 21.6% depending on the canton. Cantons like Zug (11.9%), Nidwalden (12.7%) and Lucerne (12.3%) offer particularly attractive rates for e-commerce businesses. At the federal level, direct federal tax is 8.5% on net profit. Cantonal and communal profit taxes vary significantly and represent the main differentiator between locations.
VAT Registration
Regardless of legal form, companies with worldwide turnover exceeding CHF 100,000 must register for MWST (VAT) with the Federal Tax Administration (ESTV). The standard rate is 8.1%, the reduced rate 2.6%, and the special accommodation rate 3.8%.
Recommendation for E-Commerce
For most e-commerce startups, the GmbH is the better choice: lower capital requirement, simpler structure and full liability protection. The AG is worthwhile when planning capital raises or when shareholder anonymity matters. Those starting as a sole proprietorship (Einzelunternehmen) can always convert to a GmbH or AG later as the business grows. Zunapro advises individually and accompanies the entire formation process in Switzerland, from legal form selection through commercial register entry to VAT registration with the ESTV.
