Association in Switzerland: legal framework, incorporation, taxation and governance
Introduction
An Association in Switzerland is a highly popular legal form for cultural, sports, charitable, religious, or scientific activities. Thanks to its flexibility, absence of minimum capital, and simplified incorporation process, it represents an essential tool for many collective projects. Unlike other structures, an Association (Verein) in Switzerland can come into existence simply by adopting written statutes, without notarization or mandatory entry in the commercial register. This article provides an expert overview of the Association: legal framework, incorporation procedure, accounting and tax obligations, VAT aspects, practical utility, and a comparison with foundations.
Legal framework of an Association in Switzerland
An Association is governed by Articles 60 to 79 of the Swiss Civil Code. It acquires legal personality as soon as written statutes are adopted, defining at least the purpose, resources, and organization. Registration in the commercial register is optional, unless the Association (Verein) operates a commercial enterprise or is subject to an ordinary or limited audit. As a rule, only the association itself is liable for debts; members are not personally liable, unless the statutes provide otherwise (Art. 75a CC).
Incorporation procedure of an Association
The incorporation of an Association involves several steps:
- Drafting statutes (purpose, resources, organization, rules of representation).
- Holding a constitutive general assembly with election of the board.
- Preparing the minutes of incorporation.
- Deciding on registration with the commercial register if required.
- Opening a bank account and applying for tax exemption if the association has a public-benefit purpose.
- Declaring with social insurance authorities if employing staff.
An Association in Switzerland can be founded by at least two individuals or legal entities, making it a very accessible legal form.
Governance and members of an Association (Verein)
An Association in Switzerland is based on two main bodies:
- The General Assembly, the supreme body gathering members, competent to amend statutes, elect the board, and approve accounts.
- The Board, in charge of management and representation.
Members of an Association may resign with six months’ notice and have no right to the association’s assets upon withdrawal. Exclusion is possible for just cause or as provided in the statutes.
Accounting and audit of an Association in Switzerland
An Association in Switzerland may keep simplified accounts (income/expenses and assets statement) if its annual turnover is below CHF 500,000 and it is not registered in the commercial register. Otherwise, full accounting rules under the Swiss Code of Obligations apply.
As for audit, an Association is subject to an ordinary audit if, during two consecutive years, it exceeds two of the following thresholds: total assets CHF 10 million, turnover CHF 20 million, or 50 full-time employees. In such case, registration in the commercial register becomes mandatory.
Direct taxation of an Association
By default, an Association (Verein) is subject to federal, cantonal, and communal corporate income and capital taxes. However, tax exemption is possible if the purpose is exclusively of public or charitable utility, the management is disinterested, and funds are irrevocably allocated to that purpose. Donations received by a recognized Association in Switzerland are also tax-deductible for donors.
VAT and an Association in Switzerland
Regarding VAT, an Association in Switzerland is liable if its annual turnover exceeds CHF 100,000. Since 2023, the threshold has been raised to CHF 250,000 for sports or cultural associations managed on a voluntary basis. Donations without consideration and passive membership fees are outside the scope of VAT, while contributions granting specific benefits (services, access, subscriptions) are taxable. Each Association must carefully analyze the nature of its revenues.
AML obligations and transparency
An Association in Switzerland is not subject to the Anti-Money Laundering Act unless it professionally performs financial intermediation. Since 2023, so-called “high-risk” associations (those exposed to risks of terrorism financing) must register in the commercial register and keep a detailed members’ register. A forthcoming federal register of beneficial owners will further strengthen transparency for associations and foundations in Switzerland.
Association in Switzerland vs Foundation
Choosing between an Association and a foundation is crucial:
- Association in Switzerland: with its members and board, it offers flexibility, easy amendment of purpose, no minimum capital. It is ideal for collective, evolving, and operational projects.
- Foundation: without members, endowed with irrevocably allocated assets, subject to state supervision and mandatory audit. It offers stronger credibility and durability for long-term philanthropic or patrimonial projects.
Conclusion
The Association is a flexible, accessible structure suitable for a wide range of non-profit activities. Whether for sports clubs, charities, cultural or scientific projects, it allows collective initiatives to be formalized and secured with proportionate administrative obligations. Larger or risk-exposed associations, however, must comply with stricter rules on governance, accounting, transparency, and taxation.
Services of RISTER – Fiduciary Geneva
RISTER – Fiduciary Geneva supports the creation and administration of an Association in Switzerland at every stage:
- Drafting and adapting statutes.
- Holding the constitutive general assembly and preparing minutes.
- Registering in the commercial register, if required.
- Accounting and tax management (annual accounts, VAT, tax exemption).
- Governance and compliance advice (AML, members’ register, audit).
As a recognized fiduciary in Geneva, RISTER ensures comprehensive and professional management of your Association, allowing you to focus on your social, cultural, or charitable objectives with confidence.
