Legal forms and group structures

The company limited by shares and the limited liability company

Most trading houses in Ticino are organized as companies limited by shares (società anonima, SA; Aktiengesellschaft, AG) under Articles 620 ff. of the Code of Obligations (CO). The form offers limited liability, transferable shares and a board of directors whose duties are defined by statute. Banks, inspection companies and counterparties expect it when they open lines or accept a credit risk. The minimum share capital is CHF 100,000. At incorporation at least 20 per cent of the par value of each share, and in any case at least CHF 50,000, must be paid in.¹ Since the company law reform of 1 January 2023, the share capital may also be denominated in a foreign currency that is essential to the business. Its equivalent at the time of incorporation must be at least CHF 100,000. The admissible currencies are the pound sterling, the euro, the US dollar and the yen.² For a commodity trader whose books, financing and margins are all in US dollars, this is more than a technicality. It allows the company to keep its accounts and its equity in the currency in which it trades and removes the exchange rate effects that a Swiss franc capital produced in the balance sheet.

The limited liability company (società a garanzia limitata, Sagl; Gesellschaft mit beschränkter Haftung, GmbH) under Articles 772 ff. CO is the second form. Its minimum capital is CHF 20,000, its members are entered in the commercial register and transfers of quotas require a written contract and, unless the articles provide otherwise, the consent of the members' meeting.³ The Sagl is common among small trading firms in the Sottoceneri, often with one or two partners who are also managing officers. It is less common for houses that need bank financing, because the publicity of the members and the restrictions on transfer make it less suited to outside investors and to the sale of the business. Many traders that began as a Sagl have converted into an SA once their volumes grew, a conversion that the Merger Act permits without liquidation.⁴

Branches of foreign companies

A foreign trading group may operate in Lugano through a branch (succursale) without creating a Swiss company. Swiss law requires a branch of a foreign company to be entered in the commercial register at its place of business. The branch must have a representative domiciled in Switzerland who is authorized to act for it.⁵ The branch has no legal personality, so that contracts are concluded by the foreign head office and its creditors can enforce against the head office's assets. Swiss law nevertheless treats the branch as a place of jurisdiction for disputes arising from its business, and Swiss tax law taxes it as a permanent establishment on the profit attributable to it.⁶

The branch was attractive under the old regime in two situations. A foreign principal company could book trading profit at a Swiss branch with low cantonal taxation, and the Swiss finance branch practice allowed group financing through a Swiss branch at a very low effective rate. Both practices ended with the reform of 2020 described below. Today the branch is chosen mainly for regulatory and commercial reasons. A group may want a trading desk in Lugano without separate capital, may need the foreign parent's credit rating for counterparties or may intend the activity to be temporary. Banks that finance commodity transactions generally prefer to lend to a legal person with its own balance sheet, which is why larger groups normally create a Swiss subsidiary.

Notes

1. CMS von Erlach Partners, Revision of Corporate Law (above) (minimum capital of CHF 100,000 unchanged by the reform; payment of at least 20 per cent of the par value and at least CHF 50,000). The statutory provisions are Art. 621 para. 1 and Art. 632 CO. ↩
2. CMS von Erlach Partners, Revision of Corporate Law (newsletter, undated), https://cms.law/en/media/local/cms-vep/files/publications/newsletters/revision-of-corporate-law-pdf (capital in GBP, EUR, USD or JPY; equivalent of at least CHF 100,000 at incorporation). The statutory basis is Art. 621 para. 2 CO in the version in force since 1 January 2023 (capital in a foreign currency essential to the business, equivalent to at least CHF 100,000 at incorporation), text at droit-bilingue.ch, https://www.droit-bilingue.ch/de-fr/2/22/220-621-838.html. ↩
3. CO, Art. 773 para. 1 ("Das Stammkapital beträgt mindestens 20 000 Franken"), text at droit-bilingue.ch, https://www.droit-bilingue.ch/de-fr/2/22/220-773-1109.html; Art. 785 para. 1 (assignment of a capital contribution "must be done in writing"), https://lawbrary.ch/law/art/OR-v2024.01-en-art-785; Art. 786 para. 1 (consent of the members' general meeting, which may refuse without stating reasons) and para. 2 (deviating rules in the articles of association), https://lawbrary.ch/law/art/OR-v2024.01-en-art-786; Art. 791 (entry of the members with the number and nominal value of their capital contributions), https://www.droit-bilingue.ch/de-fr/2/22/220-791-1137.html. ↩
4. Federal Act of 3 October 2003 on Mergers, Demergers, Transformations and Transfers of Assets (Merger Act, MergA), SR 221.301, Art. 53 (change of legal form without change of legal relationships) and Art. 54 para. 1 lit. a (transformation of a capital company into a capital company of another legal form), text at droit-bilingue.ch, https://www.droit-bilingue.ch/fr-de/2/22/221.301-53-56.html and https://www.droit-bilingue.ch/fr-de/2/22/221.301-54-57.html. ↩
5. 935 CO in its current version concerns the reinstatement of deleted legal entities, https://lawbrary.ch/law/art/OR-v2024.01-en-art-935. The registration of the branch and of the persons authorized to represent it is governed by the Commercial Register Ordinance of 17 October 2007 (CRO), SR 221.411, Art. 113 and 114 para. 1 lit. f, text at droit-bilingue.ch, https://www.droit-bilingue.ch/fr-de/2/22/221.411-114-132.html. ↩
6. Swiss Civil Procedure Code of 19 December 2008 (CPC), SR 272, Art. 12 (court at the location of the establishment or branch), https://www.droit-bilingue.ch/en-de/2/27/272-12-15.html; Federal Act on Private International Law of 18 December 1987 (PILA), SR 291, Art. 112 para. 2, https://www.droit-bilingue.ch/en-de/2/29/291-112-133.html; Federal Act on Direct Federal Taxation of 14 December 1990 (DBG), SR 642.11, Art. 51 para. 1 lit. b and para. 2 (branches as permanent establishments), https://www.droit-bilingue.ch/fr-de/6/64/642.11-51-59.html. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.