SWITZERLAND Law and Practice Contributed by: Marco Toni, Gilles Pitschen and Leonard Baumann, Loyens & Loeff
2.2 Type of Entity Entrepreneurs are typically advised to incor- porate an entity in the form of a corporation ( Aktiengesellschaft ) or a limited liability company ( Gesellschaft mit beschränkter Haftung ). Both types of entities are endowed with a separate legal personality and provide for a limited liability with its share capital. The minimum share capi- tal to incorporate a corporation is CHF50,000 (partially paid-in) or CHF100,000 (fully paid-in), whereas investors naturally favour a fully paid- in capital to have recourse to a higher adhesion substrate. An entity may also be incorporated as limited liability company. The main difference towards a corporation constitutes a lower mini- mum share capital requirement of CHF20,000, the disclosure of the shareholders in the com- mercial register, and somewhat limited flexibility in terms of capital-raising features. 2.3 Early-Stage Financing As professional investors such as venture capi- talists usually expect recurring annual revenues, early-stage financing is typically provided by family and friends as well as wealthy individu - als (“angel investors”). They do not require an accreditation (or another qualification), profes- sional experience, or net worth. In fact, these are private individuals investing their own money into a start-up and – unlike professional venture capitalist investors – do not get paid for making the investment. Ideally, angel investors provide knowledge with which to develop a company and successful products. In terms of investing volume, angel investors are followed by seed and series A funds, corporate ventures and family offices. After a large increase during recent years, the number of seed invest- ments fell by approximately 5% in the past year (from 166 to 157). In terms of value, the medi-
has an extraterritorial reach similar to the GDPR. This means it applies to Swiss companies whose AI systems are available or used in the EU. In contrast, Swiss law does not yet specifically reg- ulate AI – a report on AI regulatory approaches is expected in 2025, indicating future regulation in Switzerland. 2. Establishing a New Company, Early-Stage Financing and Venture Capital Financing of a New Technology Company 2.1 Establishing a New Company Among other features that make it one of the most innovative countries in the world, Switzer- land offers a business-friendly legal framework ensuring fast and cost-effective incorporations. Therefore, Switzerland is an attractive location in which to incorporate a start-up company. Swiss corporate law offers all the relevant fea- tures required for a start-up company to operate successfully – notably, with regard to initial seed financings and subsequent capital contributions from financial sponsors or strategic investors. Different share classes with voting/non-voting structure, dividend and/or liquidation prefer- ences are some of these prominent features. The entire incorporation process for a new company typically requires two to four weeks, depending on – among other things – on the canton of the company’s intended seat, the country of residence of the investors (particularly for opening the required blocked bank account), and the efficiency of the founders of delivering the necessary documents. Unless the founders choose a partnership with full personal liability, an initial capital contribution is required to estab- lish a new company (see 2.2 Type of Entity for required capital amounts).
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