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In Switzerland, a domicile company<\/strong> holds an official address \u2014 its registered office \u2014 but carries out little or no real activity there, typically to hold assets, shares or real estate. Because of this profile, banks and the tax authority apply close scrutiny under the Swiss Banks’ Due Diligence Convention (CDB) and the economic-substance rules. This guide explains the obligations that apply to a domicile company in Switzerland, the banking and tax risks involved, and how My Swiss Company helps you stay compliant.<\/p>\n<\/div>\n In Switzerland, a domicile company is an entity that does not engage in substantial commercial activities and is primarily used for holding assets, such as holding companies, real estate companies, companies holding listed or unlisted assets, or companies with tax planning or asset protection objectives. According to the Swiss Banks’ Due Diligence Convention (CDB), banks must rigorously identify these domicile companies and their beneficial owners to prevent tax fraud and money laundering risks.<\/p>\n Swiss banks must conduct a thorough analysis when opening and managing an account for a domicile company. This includes:<\/p>\n With regulatory updates in 2024, banks are now applying enhanced monitoring of financial flows and imposing regular audits on domicile companies.<\/p>\n Domicile companies are considered high-risk by banks due to their potential use for tax evasion or money laundering. Consequently, banks may require additional proof of economic substance and, in the absence of such evidence, refuse account opening or report unusual financial transactions to regulatory authorities.<\/p>\n Swiss banks are tightening their verification criteria and imposing in-depth audits, particularly for Swiss domicile companies<\/a> held by offshore structures or owned by foreign individuals. Some banks also require domicile companies to have a local tax advisor to ensure compliance with Swiss and international tax standards.<\/p>\n There are cases where a company carries out economic activities but lacks economic substance in Switzerland, meaning:<\/p>\n For many years, the Swiss Federal Tax Administration (FTA) has intensified its audits and can impose tax penalties for failing to meet economic substance requirements.<\/p>\n This applies particularly to:<\/p>\n If a company is a tax resident in multiple countries, it may be subject to double taxation on its income. To avoid this, it must:<\/p>\n Without these elements, the FTA and foreign tax authorities may impose tax adjustments and penalties.<\/p>\n A domicile company whose effective management is located abroad may face a double taxation risk, as it could be considered a tax resident both in Switzerland (due to its legal registration) and in the country where decisions are effectively made.<\/p>\n Opening and maintaining a bank account in Switzerland has become a major challenge for domicile companies and newly created companies in Switzerland with economic activity but insufficient substance.<\/p>\n Banks consider domicile companies high-risk entities due to their potential use for aggressive tax planning, tax evasion, or money laundering.<\/p>\n The main difficulties encountered include:<\/p>\n For Swiss companies managed from abroad, banks impose strict conditions, including:<\/p>\n To optimize the chances of opening and maintaining a bank account, affected companies should:<\/p>\n With increasingly strict banking regulations, companies must anticipate these difficulties and adopt proactive compliance strategies to maintain access to financial services in Switzerland.<\/p>\n My Swiss Company SA \u2013 a leader Corporate Services provider firm<\/a> \u2013 manages domicile companies and supports clients throughout the process of banking and tax compliance. Anticipating the due diligence requirements of banks and tax authorities is crucial to avoid any operational blockages.<\/p>\n This includes:<\/p>\n A resident director in Switzerland<\/a> managing a domicile company must comply with the Anti-Money Laundering Act (AMLA). This means they must be registered with a Self-Regulatory Organization (SRO) recognized by FINMA.<\/p>\n This requirement ensures:<\/p>\n With increasingly strict regulations, My Swiss Company SA helps its clients prevent tax reclassification risks and ensures compliance with Swiss banking and regulatory obligations.<\/p>\n A domicile company is an entity that holds a Swiss registered office but carries out little or no real commercial activity there \u2014 typically a holding, asset-holding or real-estate structure. Because it lacks economic substance on the ground, it is treated as high-risk by banks and is closely examined by the tax authority, which can require proof of substance.<\/p>\n<\/p><\/div>\n Yes. A non-resident can own a Swiss domicile company, but it must be represented by at least one director (AG\/Ltd) or managing officer (GmbH\/LLC) resident in Switzerland with signatory power (CO art. 718 para. 4 and 814 para. 3). When that resident director manages a domicile company, they must be affiliated with a Self-Regulatory Organization recognised by FINMA under the Anti-Money Laundering Act (AMLA).<\/p>\n<\/p><\/div>\n Because a structure without real activity can be misused for tax evasion or money laundering. Under the Swiss Banks’ Due Diligence Convention (CDB), banks must identify the beneficial owner (anyone holding more than 25%), collect Form A and CRS\/FATCA documentation, and assess economic substance. Without sufficient evidence of substance, a bank may refuse to open \u2014 or even close \u2014 the account.<\/p>\n<\/p><\/div>\n<\/section>\n A domicile company is a legitimate structure in Switzerland, but it lives or dies on substance and compliance: banking due diligence under the CDB, a resident director affiliated with an SRO, and a tax position that holds up against requalification. Treated seriously, it gives international owners a credible Swiss base; treated as a mere letterbox, it leads to refused accounts and tax adjustments.<\/p>\n My Swiss Company SA, a Swiss corporate services provider present in Geneva, Lucerne and Zug, sets up and manages domicile companies end to end. To establish or secure your structure, explore our registered address service<\/a> or contact us for an initial consultation<\/a>.<\/p>\n<\/div>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The article discusses the domicile company in Switzerland, its obligations regarding banking and tax due diligence, and the increasing scrutiny by tax authorities. It highlights the risk of double taxation when the effective management is located abroad and the importance of proving real economic substance to avoid banking restrictions. My Swiss Company SA supports its clients in ensuring compliance and structuring businesses to meet Swiss and international requirements. A resident director in Switzerland must be registered with a Self-Regulatory Organization (SRO) to comply with the Anti-Money Laundering Act (AMLA). Emphasis is placed on the need for transparent governance to avoid tax sanctions and banking restrictions.<\/p>\n","protected":false},"author":3,"featured_media":12181,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"footnotes":""},"categories":[30],"tags":[51],"class_list":["post-8167","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-formation","tag-en"],"_links":{"self":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts\/8167","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/comments?post=8167"}],"version-history":[{"count":3,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts\/8167\/revisions"}],"predecessor-version":[{"id":12180,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/posts\/8167\/revisions\/12180"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/media\/12181"}],"wp:attachment":[{"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/media?parent=8167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/categories?post=8167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/my-swiss-company.com\/en\/wp-json\/wp\/v2\/tags?post=8167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Contents<\/h3>\n
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The domicile company and banking due diligence obligations in Switzerland<\/h2>\n
Identification and classification<\/h3>\n
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Increased bank scrutiny<\/h3>\n
Companies with economic activity but no substance in Switzerland<\/h2>\n
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Risk of double taxation and increased tax audits<\/h3>\n
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Consequences of tax reclassification<\/h3>\n
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Challenges in opening and maintaining a bank account in Switzerland<\/h2>\n
Difficulties for domicile companies<\/h3>\n
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Difficulties for companies with activity but no substance in Switzerland<\/h3>\n
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Solutions and precautions<\/h3>\n
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Support by My Swiss Company SA<\/h2>\n
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The obligation of a resident director in Switzerland<\/h3>\n
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FAQ: domicile company in Switzerland<\/h2>\n
What is a domicile company in Switzerland?<\/h3>\n
Can a non-resident own a domicile company in Switzerland?<\/h3>\n
Why do Swiss banks scrutinise domicile companies so closely?<\/h3>\n
Sources<\/h2>\n
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Conclusion<\/h2>\n