Swiss Companies

There are two entities available in Switzerland: Corporation (SA or AG) and LLC (GmbH). A corporation can provide bearer shares and hold reasonable retained earnings. The owners of the LLC are publicly listed/disclosed and profits are passed through to the owner(s) (no retained earnings). The Corporation requires paid in capital of a100,000 CHF. Once formation is complete, you can expense paid in capital by paying invoices, etc. You are not required to keep paid in capital in your bank account…though, most Swiss directors will require you to indemnify the company for any losses up to 100,000 CHF.

In my opinion, a Swiss corporation is the preferred entity because it combines privacy, stability, and localized banking and financial service. It is commonly used by investment and venture capital firms as their "parent" company and can be added to an offshore bank, Cayman Island hedge fund, or other offshore investment company to manage assets in Switzerland. I believe that the foundation of any major investment group should be a back office and holding company in Switzerland.

A Swiss Trust Company is a dormant Swiss corporation, either an SA or AG, that has been purchased from its original owner and reinstated. The buyer receives a tax and liability release certificate and takes over operation of the entity.

The only difference between a new Swiss company and a "seasoned" Swiss company is that the original incorporation date remains intact providing increased levels of goodwill, prestige, and marketability. This can be very valuable when merging operations in to an existing Swiss company, when added to an investment company or offshore bank structure, or when justifying transactions with the company that might be questioned if it was a newly formed entity created at the time of the transfer.

Just remember that Switzerland has banking and securities regulations just like the United States. If you want to manage other people's money through a Trust or Corporation based in Switzerland, you will probably need a license. For more detailed information on licensing, click here: http://www.vsv-asg.ch/htm/e_regulierung.htm.

For reference, a Swiss bank requires at least CHF 15 millions capital, although the Swiss Banking Commission doesn't seem to give licenses to banks with less than CHF 30M (about $24M USD) in capital and the board must be made up of a majority of Swiss citizens with separation of the CEO, CFO, compliance and other positions. With all positions filled, you probably have a staff of 20 in Switzerland before applying for the license.