Online Notariat team
6 November 2026
Reviewed by our notary in St. Gallen
Key takeaways
A convertible loan is converted through a capital increase by set-off: the lender subscribes for new shares and pays for them with its claim against the company (Art. 634a CO). No money changes hands – debt becomes equity.
- The conversion price follows from the loan agreement, usually a discount on the next round's price or a valuation cap
- Required: a capital increase report and a licensed auditor's confirmation (Art. 652e no. 2, 652f CO)
- Our fixed price: CHF 2,500, also combined with new cash contributions – plus auditor at a fixed price and CHF 200 register fee
Convertible loans are a popular way to fund Swiss start-ups and SMEs: money comes in quickly without having to agree on a valuation yet. Sooner or later, however, the loan converts – often alongside a financing round. This guide explains how the conversion works under Swiss company law, how the conversion price is calculated and what it costs.
What a convertible loan agreement usually covers
- Conversion event: typically the next qualified financing round, often also maturity or a sale of the company
- Discount: a reduction on the price paid by new investors, rewarding the early risk
- Cap: a valuation ceiling that limits the conversion price
- Interest: often not paid out but converted together with the principal
- Subordination: sometimes agreed to protect the company's balance sheet
The agreement governs the economics. The conversion itself is a corporate act under the Swiss Code of Obligations – with a shareholders' resolution, a notarial deed and an entry in the commercial register.
The legal route: capital increase paid up by set-off
In practice, the conversion is carried out as an ordinary capital increase. The new shares (or GmbH capital contributions) are paid up by setting off the loan claim (Art. 634a CO). For companies with many lenders or a convertible bond, an AG can instead create conditional capital (Art. 653 et seq. CO). For the typical convertible loan of an SME or start-up, the ordinary capital increase is the simplest route.
Worked example
An AG has 200,000 registered shares with a nominal value of CHF 1. A business angel lent CHF 150,000 with a 20 % discount; accrued interest of CHF 6,000 converts as well. In the new round, investors pay CHF 15 per share.
| Item | Amount |
|---|---|
| Loan plus interest (conversion amount) | CHF 156,000 |
| Price in the financing round | CHF 15.00 per share |
| Conversion price after 20 % discount | CHF 12.00 per share |
| New shares (156,000 ÷ 12) | 13,000 shares |
| Share capital (13,000 × CHF 1) | CHF 13,000 |
| Share premium → statutory capital reserve | CHF 143,000 |
Shares may never be issued below nominal value (Art. 624 CO). The share premium goes to the statutory capital reserve (Art. 671(1) no. 1 CO). If it is recorded separately and reported to the Swiss Federal Tax Administration, it can generally be repaid later free of withholding tax (capital contribution reserve, Art. 5(1bis) Withholding Tax Act).
With a cap
If the agreement also contains a cap, a second conversion price is calculated from the cap valuation; the lower price usually applies. The exact formula – for example whether options are counted – is set out in the agreement. We take over your calculation and check it for plausibility.
The process in five steps
- Conversion event and calculation of the conversion amount, price and number of new shares
- Documents: we prepare the resolution, amendment of the articles, subscription form and the capital increase report
- Auditor's confirmation: a licensed auditor reviews the report – we coordinate this at a fixed price
- Notarial deed: if all shareholders take part (universal meeting), everything is recorded in a single deed – fully digital by Swiss QES if you wish
- Commercial register: we file the capital increase; afterwards you update the share register and book the loan into equity
The capital increase must be filed with the commercial register within six months of the resolution, otherwise the resolution lapses (Art. 650(3) CO). With a universal meeting, everything happens on the same day.
What it costs
| Item | Amount |
|---|---|
| Our fixed price: capital increase by set-off | CHF 2,500 + VAT |
| Combined with new cash contributions | also CHF 2,500 + VAT |
| Licensed auditor | fixed price on preferential terms, around CHF 500–700 |
| Commercial register | CHF 200; GmbH plus CHF 70 per new partner |
| Issuance stamp duty | 1 % on contributions above CHF 1 million (cumulative, incl. premium) |
| Optional: signing by Swiss QES | + CHF 150 |
For a non-binding estimate including stamp duty, use our cost calculator (in German). A full cost breakdown is in What does a capital increase cost in Switzerland?
Frequently asked questions
How is a convertible loan converted under Swiss law?+
Usually by an ordinary capital increase in which the new shares are paid up not in cash but by setting off the loan claim against the company (Art. 634a Swiss Code of Obligations). The loan disappears; in its place come share capital and – where the conversion price exceeds the nominal value – the statutory capital reserve (share premium). The same rules apply to a GmbH via Art. 781 CO.
Is an auditor required?+
Yes. For a set-off, the board reports on the existence and offsettability of the claim (Art. 652e no. 2 CO), and a licensed auditor confirms the report (Art. 652f CO) – even if the company has opted out of the audit. We coordinate the auditor at a pre-agreed fixed price on preferential terms (around CHF 500–700).
What does the conversion cost?+
Our fixed price for a capital increase by set-off is CHF 2,500 plus VAT – also as a combined round where new investors pay in cash at the same time. This applies if all shareholders take part (universal meeting) and you enter the details in our AI assistant or submit the online form complete. On top: the auditor, the commercial register fee of CHF 200 (GmbH: plus CHF 70 per new partner) and, where applicable, the issuance stamp duty.
Is stamp duty payable on the conversion?+
Only once the shareholders' contributions since incorporation exceed CHF 1 million in total (Art. 6(1)(h) Stamp Duty Act). The duty is then 1 % on the excess – calculated on the full conversion amount including share premium, not just the nominal value.
Capital increase at a fixed price
Start with our AI notary assistant – it speaks English, is available 24/7 and only needs a quick e-mail verification, no account.
Prefer a person? Our team in St. Gallen is happy to help in English: +41 71 272 26 55.
Flat fees excl. VAT; official commercial register fees are charged separately by the registry.
More English guides
What Does a Capital Increase Cost in Switzerland?
Notary, commercial register, auditor and issuance stamp duty – the four cost blocks of a capital increase for a Swiss GmbH or AG, with three worked examples.
English guideHow to Set Up a Company in Switzerland as a Foreigner
No Swiss passport required: who can found a Swiss GmbH or AG, how to meet the Swiss residency requirement for one authorised signatory, how to sign from abroad without an apostille and what it costs.