Setting up a commodity trading company in Switzerland: no licence, and the three thresholds that actually apply

No licence, and why Switzerland is where the trade sits

Swiss law contains no authorisation to trade commodities. A company that purchases a cargo, takes title to it and resells it operates under ordinary company law, like a wholesaler. No regulator grants permission, no register records trading status, and no minimum capital attaches to the activity as such. It is the first point My Swiss Company SA makes to founders of trading houses, because everything else in the project follows from it.

That absence is structural rather than accidental, and it explains the concentration. The Federal Department of Foreign Affairs counts over 900 commodities trading companies in Switzerland, most of them in Geneva, Zug and Lugano. Around them sits an ecosystem that is harder to replicate than a tax rate: trade finance desks, inspection companies, maritime lawyers, insurers and a deep pool of people who have priced a cargo before.

So the useful guide is not about obtaining something. It is about knowing where the boundaries are, because a trading business that drifts across one of them without noticing acquires obligations retroactively, and the directors answer for them personally.

First crossing: cash, and the CHF 100,000 threshold

The Anti-Money Laundering Act applies to three categories: financial intermediaries, dealers, and advisers. Dealers are defined as natural or legal persons who trade in goods on a professional basis and accept cash in payment. Accepting cash is the trigger. A trader settling exclusively by bank transfer or letter of credit is outside this category entirely.

Where cash is accepted, obligations start above a threshold. Dealers must verify the identity of the contracting party, identify the beneficial owner, and establish and retain documentation where they receive more than CHF 100,000 in cash in a trading transaction.

Two refinements are routinely missed, and both are in the act.

The precious metals and precious stones threshold is nearly seven times lower, which matters in a country that refines a large share of the world’s gold. And the anti-structuring rule is explicit: the obligations apply even where the cash payment is made in several instalments each below the threshold, if together they exceed it.

Beyond identification, dealers must clarify the background and purpose of a transaction where it appears unusual, unless its lawfulness is manifest, or where there are indications that the assets stem from a crime or an aggravated tax misdemeanour, that a criminal or terrorist organisation has power of disposal over them, or that they serve terrorist financing.

Second crossing: acting for the account of others

The second boundary is the one that turns a trader into a financial intermediary, and it is widely misread. Financial intermediaries include persons who, on a professional basis, accept, hold on deposit, or assist in investing or transferring assets belonging to third parties, and in particular those who “trade, for their own account or for the account of others, in banknotes, currencies, money market instruments, foreign exchange, precious metals, commodities or securities and their derivatives”.

Read quickly, that wording appears to capture every commodity trader, including one dealing for its own account. Read in context, it does not: the provision sits inside a definition that concerns assets belonging to third parties, and it targets commodities handled as financial assets or instruments rather than the physical purchase and resale of a cargo the company owns.

The Federal Council has drawn the line itself. For commodities, the Anti-Money Laundering Ordinance treats as trading activity only exchange trading for the account of third parties, off-exchange trading for the account of third parties where the commodities are so standardised that they can be liquidated at any time, and own-account trading in bank precious metals (art. 5 para. 1 AMLO, version in force since 1 October 2026, available in French, German and Italian only). The situations that move a business towards the line remain recognisable: managing flows for the account of a producer rather than trading on own book, pre-financing structured as lending, and derivative activity conducted for clients. Among credit operations, the Act expressly lists the financing of commercial transactions, which reaches into trade finance.

This is also the difference between a trader and a broker. A broker brings counterparties together and earns a commission without taking a position; a trader takes title and carries the price risk. The two are taxed differently, financed differently and, on this point, regulated differently.

Third crossing: supply chain due diligence

The third boundary comes from company law rather than financial regulation. Companies whose registered office, central administration or principal place of business is in Switzerland must comply with supply chain due diligence duties and report on them where they place in free circulation in Switzerland, or process in Switzerland, minerals or metals containing tin, tantalum, tungsten or gold originating from conflict-affected or high-risk areas, or where they offer goods or services in respect of which there is reasonable suspicion of child labour.

Two features decide whether a given trader is concerned.

The first is territorial. The duty attaches to placing in free circulation in Switzerland or processing in Switzerland. A substantial part of Swiss trading concerns cargoes that never touch Swiss territory, and those flows fall outside this particular obligation, which is not the same as falling outside sanctions law.

The second is volume. Annual import and processing thresholds, below which a company is exempt from both the due diligence and the reporting duty, are set out in an annex to the implementing ordinance, expressed in kilograms per year.

The figure that matters here is 100 kilograms per year for unwrought, semi-manufactured or powdered gold, against 4,000,000 kilograms for gold ores. A gold trader crosses 100 kg almost immediately, while a page that quotes only the ore threshold would suggest a comfortable exemption. Where a company controls others, the volume is assessed for the group as a whole.

The ordinance also provides two documented exits that are worth knowing. If verification establishes that the minerals and metals do not originate from conflict-affected or high-risk areas, the company documents that finding and is exempt from the due diligence and reporting duties. The same applies where verification establishes that there is no reasonable suspicion of child labour. In both cases the exemption is earned by documenting the check, not by omitting it.

Sanctions and embargoes

Since 2022 this has been the operational risk that occupies trading compliance teams more than any other. Switzerland implements sanctions through ordinances adopted under the Embargo Act, and those ordinances, rather than the framework act, carry the substantive prohibitions: listed persons and entities, prohibited goods, price caps, shipping and insurance restrictions.

Two practical consequences for a new trading company. Screening has to be built into the transaction workflow from the first deal rather than added later, because the counterparty, the vessel, the beneficial owner and the cargo origin all have to be checked against instruments that change frequently. And the goods themselves may fall under export control legislation independently of sanctions, in particular dual-use items.

Company, capital and substance

Most trading houses incorporate as a company limited by shares, for the capital structure and because counterparties and banks expect it. Our guide to legal forms of business in Switzerland covers the comparison, and the public limited company is treated separately, as is the general process of incorporating a company in Switzerland.

Capital is rarely the constraint. The constraint is trade finance, and it shapes the structure from day one. A bank opening a letter of credit line looks at the experience of the trading team, the risk management framework, the audited figures, and whether decisions are genuinely taken in Switzerland. Substance in Geneva or Zug is not a formality here: it is what makes the credit line possible, and a company whose management sits elsewhere will struggle to obtain one whatever its registered address says. Opening the account itself is a project in its own right, covered in our guide to opening a bank account for your company in Switzerland.

On the tax side, corporate taxation varies by canton, and Geneva, Zug and Ticino each built their trading clusters for reasons that go beyond rates. Accounting for trading activity has its own requirements, particularly on inventory and open positions, which our guide to accounting in Switzerland introduces.

VAT on trades that never touch Switzerland

This is the point most poorly handled online, and it is central to the economics of the business. A large share of Swiss trading consists of transactions on goods that move from one foreign country to another without ever entering Swiss territory. Swiss VAT is a tax on domestic supplies and on imports, so transactions on goods located abroad throughout are outside its scope.

That does not take the company out of VAT, and this is where many founders go wrong. A business with its seat in Switzerland is liable to VAT; the only exemption is for one whose turnover in a year, in Switzerland and abroad combined, stays below CHF 100,000 (art. 10 para. 2 let. a VAT Act). A Swiss trading house whose sales all take place abroad is therefore liable above that threshold. This usually works in its favour: input tax relating to supplies made abroad is deductible to the same extent as if they had been made in Switzerland (art. 29 para. 1bis VAT Act), so the company recovers Swiss VAT on its offices, advisers and inspections. Our guide to VAT in Switzerland sets out the framework; supplies that genuinely take place in Switzerland, such as imports or domestic deliveries, follow the ordinary rules.

Common mistakes

• Assuming the absence of a licence means the absence of obligations. Three regimes can attach to an unlicensed trading company, and two of them carry figures.
• Quoting the gold ore threshold instead of the gold threshold. 4,000,000 kg and 100 kg are not the same exemption.
• Splitting cash settlements. Instalments below the threshold are added together.
• Confusing broker and trader. Taking title changes the financing, the accounting and the regulatory analysis.
• Treating substance as an address. Trade finance is granted to companies that decide in Switzerland.
• Writing on the 2024 version of the Anti-Money Laundering Act. The dealer provisions change on 1 October 2026.

FAQ: setting up a commodity trading company in Switzerland

Do I need a licence to trade commodities in Switzerland?

No. Swiss law contains no authorisation to carry on commodity trading. A company buying and reselling goods for its own account operates under ordinary company law. Obligations arise only where the business accepts cash above defined thresholds, acts for the account of third parties, or imports or processes certain minerals and metals in Switzerland.

What cash threshold triggers anti-money laundering obligations?

CHF 100,000 received in cash in a trading transaction, reduced to CHF 15,000 for trading in precious metals or precious stones. The obligations are identification of the contracting party, identification of the beneficial owner, and documentation. Instalments below the threshold that together exceed it are added together.

When do supply chain due diligence duties apply to a trader?

Where a Swiss-based company places in free circulation in Switzerland, or processes in Switzerland, minerals or metals containing tin, tantalum, tungsten or gold from conflict-affected or high-risk areas, above the annual thresholds in Annex 1 of the implementing ordinance, or where there is reasonable suspicion of child labour. Cargoes that never enter Swiss territory fall outside this particular duty.

What is the exemption threshold for gold?

100 kilograms per year for gold that is unwrought, semi-manufactured or in powder form, against 4,000,000 kilograms for gold ores and concentrates. Where a company controls other companies, the volume is assessed at group level. A gold trading business crosses the 100 kg threshold very quickly.

Is a commodity trader a financial intermediary?

Not through physical trading on its own account. The definition of financial intermediary concerns assets belonging to third parties, and reaches commodities handled as financial assets or instruments. Pre-financing structured as lending, managing flows for the account of producers, and derivative activity conducted for clients are the situations that move a business towards that status.

Is Swiss VAT due on goods that never enter Switzerland?

Not on the sale itself: where the goods are abroad when the buyer obtains the power to dispose of them, the place of supply is abroad (art. 7 para. 1 VAT Act). The company, however, is liable to Swiss VAT once its turnover in Switzerland and abroad reaches CHF 100,000, and it can deduct input tax on its Swiss costs (art. 10 para. 2 let. a and art. 29 para. 1bis VAT Act).

Sources

• Federal Act on Value Added Tax (VAT Act, SR 641.20), art. 7, 10 and 29
• Anti-Money Laundering Ordinance (AMLO, SR 955.01), art. 5 (in French)
• Anti-Money Laundering Act (SR 955.0), art. 2 and 8a
• Swiss Code of Obligations (SR 220), art. 964j
• Ordinance on Due Diligence and Transparency regarding Minerals, Metals and Child Labour (SR 221.433), Annex 1
• Embargo Act (SR 946.231)
• Goods Control Act (SR 946.202)
• Federal Department of Foreign Affairs, commodities trading in Switzerland