What is Minimum share capital?

Home » Glossaries » Minimum share capital

Minimum share capital refers to the legally required amount of capital that must be contributed by shareholders to establish certain types of companies in Switzerland. This capital serves as the financial foundation of the company and offers a degree of assurance to creditors. The regulations regarding minimum share capital are outlined in the Swiss Code of Obligations (CO).

Minimum Share Capital Requirements in Switzerland

  1. Limited Liability Company (GmbH/SARL)
    • Minimum share capital: CHF 20,000.
    • The entire amount must be fully paid in before the company is registered.
  2. Corporation (AG/SA)
    • Minimum share capital: CHF 100,000.
    • At least CHF 50,000 or 20% of the nominal capital (whichever is higher) must be paid in upon registration.
  3. Other Entities
    • For sole proprietorships and general partnerships, there is no minimum share capital requirement.

Importance of Minimum Share Capital

  • Creditor Protection: Ensures that a company has a financial base to cover initial obligations and liabilities.
  • Operational Security: Demonstrates financial stability during the start-up phase, enhancing trust with partners and clients.
  • Legal Compliance: Meeting the minimum share capital requirements is mandatory for registering and operating a business in Switzerland.

Minimum share capital is a critical aspect of establishing a company in Switzerland, reflecting the country’s emphasis on financial responsibility and stability in its business environment.