Share capital in a foreign currency: the new option

With the revision of company law, which came into force on 1 January 2023, one of the historic dogmas of Swiss corporate law fell away: share capital no longer has to be denominated in Swiss francs. Since then an AG or a GmbH can hold its capital in a foreign currency. It is a technical innovation, but one with tangible practical effects for companies with an international focus. Let’s see how it works.

What has changed

Before 2023, the capital of an AG or a GmbH had to be denominated exclusively in CHF. Today the law allows it to be expressed in a foreign currency essential to the company’s business. The Federal Council has defined the permitted currencies, which correspond to the main international currencies:

euro (EUR);
US dollar (USD);
pound sterling (GBP);
Japanese yen (JPY).

It is therefore not possible to choose just any currency: the option is limited to these currencies, considered stable and relevant to international trade.

The requirements to meet

Adopting capital in a foreign currency is not automatic. A few conditions must be met:

the chosen currency must be relevant to the company’s business: it is not a whim, but must reflect the economic reality of the enterprise (for example, revenues and costs mainly in that currency);
the capital must still reach the equivalent value of the legal minimum at the time of incorporation — that is, the equivalent of at least CHF 100,000 for the AG and at least CHF 20,000 for the GmbH, calculated at the relevant exchange rate;
the accounts and the balance sheet must be kept in the same currency as the capital. You cannot have the capital in USD and the accounts in CHF.

This third point is the true heart of the reform: the innovation does not concern only the label on the capital, but the entire functional currency in which the company measures its figures.

Why it can be worthwhile

The main advantage is to eliminate exchange-rate noise for companies that in fact operate in another currency. A Swiss company that invoices and pays almost everything in euros or dollars was, under the old rule, forced to express its capital and accounts in francs, generating accounting exchange-rate differences that did not reflect the real performance of the business.

Denominating capital and accounts in the actual currency brings several benefits:

more readable financial statements that reflect the company’s real economy;
less volatility from exchange-rate differences on capital and equity;
consistency with the parent company or the group, when the company is part of an international structure that consolidates in EUR or USD.

It is a particularly sensible choice for Swiss subsidiaries of foreign groups, holding companies with currency flows, and trading or service companies with a predominantly international clientele.

The limits and points of attention

A foreign currency is not the right choice for everyone. Some aspects to consider:

the Swiss tax authorities think in francs: taxable profit and capital must in any case be converted into CHF for tax purposes, according to the applicable conversion rules. The company keeps its accounts in the foreign currency, but the dialogue with the tax authority remains in francs, and this can introduce exchange-rate differences on the tax side;
for a purely domestic business, with receipts and expenses in francs, a foreign currency adds complication without benefits: the CHF remains the natural choice;
the switch from the franc to a foreign currency (or vice versa) for an existing company entails a formal decision and adjustments to the articles of association and the accounts, to be planned carefully at the start of the financial year.

How to decide

The right question is not “can I have my capital in euros?”, but “what is the currency in which my company truly lives?”. If the answer is clearly a permitted foreign currency, the new option makes life simpler. If the business is mixed or predominantly in francs, the CHF usually remains the cleanest choice.

How we help

We assess with you whether foreign-currency capital suits your business model, handle the statutory, accounting and tax aspects of the switch, and support you through incorporation. Let’s talk about your project.