GmbH or Sole Proprietorship? Choosing a Legal Form in Switzerland
Liability, capital, taxes and administration compared.
6 min read · Business & Freelance
Life situations: Self-employment
The legal form you choose affects liability, taxes and administration. There is no single best answer.
Sole proprietorship
- No minimum capital and fast to start.
- You are personally liable with all your assets.
- Profit is taxed as your income and you pay AHV on it.
- Simple bookkeeping for small businesses.
Example with default values. Open the calculator →
GmbH (limited liability company)
- Minimum share capital of CHF 20,000, fully paid in.
- Liability is limited to the company's assets, with some exceptions.
- The company pays corporate tax on profit and you pay income tax on salary and dividends.
- Double taxation is softened by partial taxation of qualified dividends in many cantons.
AG (public limited company)
An AG needs CHF 100,000 share capital, with at least half paid in, and is mostly used for larger or investor-backed businesses.
How to decide
Consider risk, expected profit, need for a credible image, plans for investors and whether you want to build pension assets via a salary. A fiduciary can model the total tax and social charges for your case.
Compare roughly with the sole proprietor vs. GmbH calculator.
Try it yourself: Sole Proprietor vs. GmbH Tax
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- Net, GmbH (profit retained)
- CHF 129'000
- Net, GmbH (all paid out as dividend)
- CHF 97'395
- Better when paying out everything
- Sole proprietor