Directors and managers in Switzerland
Setting up and running a company in Switzerland, whether a public limited company (AG) or a limited liability company (GmbH), involves compliance with a number of specific legal obligations. Central among these is the requirement for local representation. Under Articles 718 para. 4 CO (for AGs) and 814 para. 3 CO (for LLCs), all Swiss companies must be represented by at least one person domiciled in Switzerland. This provision is designed to ensure responsible, transparent management that complies with Swiss law.
A duty of effective representation
Article 718 paragraph 4 of the Swiss Code of Obligations (CO) stipulates that the Board of Directors of a corporation must appoint one or more persons with authority to represent the company, at least one of whom must be resident in Switzerland. The same applies to limited liability companies, under article 814 paragraph 3 of the Swiss Code of Obligations, which requiresat least one managing director with signing authority to be domiciled in Switzerland.
This requirement is not limited to a symbolic presence: the person in question must be able to effectively exercise his or her role. This includes access to internal registers (share register, list of beneficial owners, accounting documents, etc.) and the ability to dialogue with Swiss authorities (tax, commercial or regulatory).
Who can fill this role?
The person resident in Switzerland who can represent the company can be :
- A member of the Board of Directors (SA)
- A manager (Sàrl)
- A director or authorized agent, if the board or management delegates the signature to him/her
In international structures or holding companies, it is common for the managing members to be domiciled abroad. In such cases, it becomes imperative to appoint a local representativeoften an independent professional or a trust company, to meet this obligation.
Why is this so important?
Switzerland attaches great importance to economic transparency, the fight against money laundering and the traceability of business activities. By obliging companies to appoint at least one representative domiciled on its territory, it ensures :
- That there is an accessible contact person in the event of an inspection or request for information
- That the company complies with its administrative and tax obligations
- A real, rather than purely formal, presence on Swiss territory
It’s also a way of combating letter-box companies or opaque structures, by making at least one person responsible locally.
Delegating to a professional: a common solution
For foreign companies or international groups wishing to set up a subsidiary or structure in Switzerland, it is often simpler and safer to mandate a fiduciary company such as Swiss Director Services Sàrl to provide a resident director or manager. These service providers offer representation in accordance with Swiss law, while acting according to precise instructions, within the framework of legally supervised mandates.
It is essential to emphasize that the designated person cannot be an unaccountable figurehead. They must formally accept their role and be prepared to answer for their actions in the event of a serious breach or dispute.
Penalties for non-compliance
A company that fails to comply with this requirement may face blockages at the Commercial Registry, delays in its incorporation or amendments to its articles of association, or even administrative sanctions. In the event of legal proceedings or inspections, the absence of a local representative can severely handicap the company’s defense or delay exchanges with the authorities.
Local representation is an essential requirement of Swiss company law. Whether you opt for a public limited company or a limited liability company, the appointment of at least one person resident in Switzerland, with signing authority, is essential to guarantee the company’s compliance. Hiring a professional director or manager based in Switzerland is a secure and efficient solution for international companies wishing to operate legally on the Swiss market.
