Incorporating with contributions in kind: how it works and what you need

A company’s capital is not always paid up in cash. When you contribute assets instead of money, this is known as a contribution in kind: a useful tool, but one governed by precise rules.

What a contribution in kind is

A contribution in kind occurs when the share capital is paid up by transferring assets, receivables or other property to the company instead of cash: machinery, vehicles, real estate, patents, a client portfolio or an entire existing business (for example, converting a sole proprietorship into a GmbH or AG).

The documents required

Compared with an ordinary incorporation, additional documents are needed to ensure that the value of the assets genuinely matches the capital paid up:

• Contribution-in-kind agreement: describes the assets contributed and the value attributed to them.
• Report on the contributions in kind: drawn up by the founders, setting out the reasons for the valuation.
• Verification by a licensed auditor: an independent auditor confirms that the assets exist and that their value covers the declared capital (audit confirmation).
• Supporting documentation: financial statements, expert appraisals, contracts, title deeds.

These items are referenced in the deed of incorporation and filed with the commercial register.

Why so much caution

The law protects future creditors: if a company declares CHF 100,000 of capital but the contributed assets are worth CHF 40,000, the capital would be fictitious. The auditor’s verification exists precisely to prevent overvaluations. This is why contributions in kind require more time and higher costs than a cash incorporation.

When it makes sense

• When you convert a sole proprietorship or an already established activity into a capital company.
• When you have operating assets useful to the business and do not want to tie up liquidity.
• When you contribute intellectual property (patents, software) as the basis of the project.

The costs

In addition to the incorporation fees, there are the costs of the verification and, often, of a certified expert appraisal of the assets. These are justified investments when the contribution in kind has a significant value; for small amounts, it is often preferable to pay up in cash.

How we help you

We assess whether a contribution in kind is the right route for you, prepare the documentation, coordinate the auditor and the certified appraisals (from CHF 1,000) and handle the registration. Let’s look at your case.