Setting Up a Holding Company in Switzerland

As a company grows, the question of a holding structure often comes up: keeping profits safe, building a second business, preparing for succession. This guide explains what a Swiss holding company is, when it pays off, how it is set up and where the tax pitfalls lie.

What is a holding company?

A holding is not a separate legal form. It is a GmbH or AG whose purpose is essentially to acquire, hold, manage and sell participations. Typical structures:

• Holding above one operating company – you no longer hold your GmbH or AG privately, but through the holding.
• Holding above several companies – for different business lines or locations.
• Family holding – to pool participations and prepare succession.

When a holding pays off

• Separating risks: operating risks stay in the operating company; reserves sit protected in the holding.
• Reinvesting profits: thanks to the participation deduction, dividends from the subsidiary flow into the holding largely tax-free and can be reinvested – instead of being taxed as your private income.
• Selling: if the holding sells a participation of at least 10% held for at least one year, the capital gain is also relieved by the participation deduction.
• Succession and growth: several companies or heirs can be organised under one roof.

For a single small company without reserves, a holding often brings more effort than benefit: it needs its own bookkeeping, annual accounts and tax return.

Taxes: participation deduction instead of holding privilege

Until 2019, holding companies enjoyed a special cantonal tax status. The STAF tax reform abolished this holding privilege on 1 January 2020. Today a holding pays ordinary profit tax – but income from participations is largely relieved through the participation deduction:

The cantons apply a corresponding rule and may also reduce the capital tax on participations. The actual tax burden depends on the canton of the registered office – have your tax adviser calculate it in advance.

GmbH or AG as a holding?

Both are possible. The AG is often chosen for holdings: shareholders are not listed in the commercial register, and shares are easier to transfer. The GmbH needs less capital (CHF 20,000 instead of CHF 100,000), but its partners are listed publicly. A holding, too, needs at least one representative resident in Switzerland. More in GmbH or AG?

Formation: in cash or by contributing shares

Option 1: Cash formation

You pay the capital into a capital deposit account and set up the holding like any other GmbH or AG. The holding then acquires participations or founds new subsidiaries. With us at a flat fee of CHF 390 (GmbH) or CHF 490 (AG).

Option 2: Contributing your existing shares

More common is a formation by contribution in kind: you set up the holding and contribute your shares in the operating company. This requires:

1. a contribution agreement between you and the new holding,
2. a founders' report describing and valuing the participation,
3. an audit confirmation by a licensed auditor,
4. the notarial deed and the entry in the commercial register.

If the operating company is a GmbH, the transfer of its shares generally also requires the consent of its partners' meeting. With us the formation by contribution in kind costs CHF 950 plus the auditor (around CHF 500–700, coordinated by us) – see also Swiss company without a Swiss bank account.

Costs at a glance

Tax advice and any tax ruling are not part of our flat fee – your tax adviser takes care of that. Our role is the legally sound implementation: articles, contribution agreement, founders' report, coordination of the auditor, notarial deed and commercial register.