A Guide on Dividends in Switzerland
A Guide on Dividends in SwitzerlandUpdated on Sunday 19th February 2017
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Dividends in Switzerland refer to a portion of the company’s earnings, which are distributed to the shareholders of the company. The dividend distribution must be performed in accordance with the stipulations of the company’s statutory documents. The company’s representatives are entitled to establish the value of a dividend, which later on has to be approved by the board of the company. Our team of lawyers in Switzerland can offer more details on this aspect, as well as on the rights shareholder have in terms of dividend distribution.
Paying dividends to Swiss shareholders
In Switzerland, dividends can be distributed to the shareholders only if the company is registered as a corporation or as a limited liability company. Dividends can be paid to the company’s shareholders only when the company has sufficient profits.
It is important to know that the manner in which dividends are distributed in Switzerland is established when drawing the company’s statutory documents – the articles of association and memorandum, and our team of attorneys in Switzerland can offer more details.
Types of dividends in Switzerland
In Switzerland, there is a certain structure when referring to the distribution of dividends that must be enforced by the company’s representatives, as follows:
• 5% of the company’s profits must be distributed to the legal reserves of the company;
• the company’s legal reserves can be distributed to the shareholders only when their value reaches 50% of the legal entity’s stated capital.
Swiss legislation stipulates that the dividends can be distributed to shareholders as interim dividends or final dividends, but it is important to know that the general practice is to cash them out as final dividends. This means that the company has already completed an audit on the company’s operations.
Still, interim dividends can also be distributed if the company performs an audit during the financial year, which will verify the distributable profits. Interim dividends refer to financial earnings provided during the financial year.
We invite businessmen to address to our law firm in Switzerland for legal advice on the Swiss dividends.