Swiss Statutory Audit: Three Tiers
The 2025 Reform: What Changed
The rationale for the change was consistency: allowing retroactive waivers created a situation where companies could decide after seeing annual results whether to involve an auditor. The legislature viewed this as undermining the protective function of the audit even within the limited-audit tier. The 2025 reform harmonised the timing rule with the principle that audit waivers should be prospective decisions, not retrospective clean-ups.
Who Can Opt Out: Two Cumulative Conditions
To validly opt out of limited statutory audit under OR Art. 727a para. 2, a Swiss AG or GmbH must satisfy both conditions simultaneously:
| Condition | Detail | Notes |
|---|---|---|
| Fewer than 10 FTE employees on annual average | Full-time equivalent basis; part-time employees are converted to FTE | Assessed per financial year. If a company averages 10+ FTE during the year, opting-out falls away for that year. |
| Unanimous shareholder consent | ALL shareholders must consent - not just a majority or quorum | A single non-consenting shareholder (even a 1% minority) blocks opting-out. There is no exception. |
Both conditions must be present at the time the resolution is passed and must continue to apply throughout the financial year. If either condition ceases to apply mid-year (employee count rises to 10+, or a new shareholder does not consent), the company must appoint an auditor for the following year.
Companies Not Eligible for Opting-Out
The following categories of Swiss company cannot opt out of statutory audit regardless of size or shareholder unanimity:
- Companies required to prepare consolidated accounts (OR Art. 963)
- Companies subject to ordinary audit (OR Art. 727) - any entity meeting at least two of the three large-entity thresholds
- Public companies (listed AG)
- Companies whose securities are publicly traded
- Foundations (Stiftungen) - subject to separate audit requirements under ZGB Art. 83b
- Cooperatives with more than 300 members
- Banks, insurance companies, and FINMA-regulated entities (separate regulatory audit requirements)
Ordinary Audit Thresholds
A company triggers mandatory ordinary audit if it meets at least two of the following three criteria in two consecutive financial years (OR Art. 727 para. 1 no. 2):
| Criterion | Threshold |
|---|---|
| Balance sheet total | More than CHF 20,000,000 |
| Revenue (net) | More than CHF 40,000,000 |
| Full-time equivalent employees | More than 250 annual average |
Ordinary audit requires a state-supervised FAOA (Federal Audit Oversight Authority) auditor. There is no possibility of opting out from ordinary audit.
The Opting-Out Resolution: Practical Mechanics
Passing a valid opting-out resolution requires:
Verify fewer than 10 FTE annual average expected for the coming year. Assess headcount projections. Confirm all shareholder identities and obtain their consent.
Hold a general meeting or pass a written circular resolution (if permitted by Statuten) before the first day of the financial year to be covered. For a January-December year, the deadline is 31 December of the preceding year.
Every shareholder - whether present at a meeting or not - must consent. Written consent via signed circular resolution from all shareholders is the most reliable documentation approach.
File the signed resolution in the company's minute book. No filing with the commercial register is required. Retain for at least 10 years per OR Art. 958f.
If the company had previously appointed a statutory auditor, the resolution terminates their mandate. Notify the auditor accordingly. No commercial register filing is required for auditor removal if no auditor was formally registered.
Cost Saving from Opting Out
| Audit type | Who conducts | Typical cost range |
|---|---|---|
| Ordinary audit | State-supervised FAOA auditor | CHF 15,000 - 80,000+ |
| Limited audit | Registered FAOA auditor | CHF 4,000 - 12,000 |
| Opting-out (no audit) | None | CHF 0 (no statutory audit) |
For a small shelf company with minimal operations - a holding vehicle, a dormant entity during repositioning, or a start-up in its first year - the saving is the entire limited audit cost of CHF 4,000-12,000 per year. Over five years, that represents CHF 20,000-60,000 in preserved cash flow. The savings compound if the company remains small throughout its lifecycle.
Note that opting out of the statutory audit does not exempt the company from bookkeeping obligations. All Swiss AG and GmbH must maintain accounts and prepare annual financial statements under OR Art. 957 regardless of audit status. Bookkeeping services for a small company cost approximately CHF 2,000-6,000 per year separately.
When Opting-Out Falls Away Automatically
Opting-out is not permanent. It lapses in any year where:
- The company's annual average FTE equals or exceeds 10 - the company must appoint a limited auditor for the following year
- A new shareholder acquires shares and does not consent to opting-out - opting-out falls away from the next financial year
- An existing shareholder withdraws their consent at any time - effective from the next financial year
- The company grows to trigger ordinary audit thresholds - ordinary audit becomes mandatory regardless of shareholder consent
There is no automatic reinstatement once opting-out falls away. The company must pass a fresh unanimous resolution for any future year it wishes to opt out again, and must again satisfy all conditions.
Opting-Out for a Newly Acquired Shelf Company
A Swiss shelf company is typically a dormant or minimally active company with no or very few employees. This makes it structurally eligible for opting-out from the first full year under new ownership. However, the 2025 timing rule creates a practical consideration:
- If the shelf company is acquired mid-year (say, June 2026), and the company's fiscal year runs January-December, the opting-out resolution for the current year (2026) must already have been passed by 31 December 2025
- If no prior opting-out resolution exists, the company must complete a limited audit for the current year
- The first opportunity to pass a prospective opting-out resolution is before 31 December 2026 to cover fiscal year 2027
When acquiring a shelf company, confirm with the vendor whether a valid opting-out resolution was already in place for the current fiscal year. This information should form part of due diligence for a dormant or small shelf company acquisition.
Frequently Asked Questions
What changed for Swiss audit opting-out in 2025?
Retroactive opting-out resolutions are no longer valid from 1 January 2025. The resolution must be passed before the financial year it covers begins. This prevents companies from deciding after the fact whether to involve an auditor.
Which Swiss companies can opt out of the statutory audit?
Companies subject to limited audit (not ordinary audit) may opt out if they have fewer than 10 FTE annual average employees AND all shareholders consent unanimously. No exceptions to the unanimity requirement.
What is the difference between ordinary audit and limited audit in Switzerland?
Ordinary audit applies to large entities (CHF 20M balance sheet / CHF 40M revenue / 250+ FTE, two of three in two years). Limited audit applies to smaller companies. Only limited audit is eligible for opting-out.
What happens if a company loses opting-out eligibility mid-year?
Opting-out falls away automatically. The company must appoint a limited auditor for the next financial year. The change applies from the following year, not retroactively to the current year.
How much does an audit cost in Switzerland and what do companies save by opting out?
Limited audit typically costs CHF 4,000-12,000 per year. Opting out saves this entire amount. Over five years for a small company, this represents CHF 20,000-60,000 in preserved cash.
Does a Swiss shelf company need an auditor?
Not if the shelf company meets the opting-out conditions: fewer than 10 FTE and unanimous shareholder consent. The opting-out resolution must be passed before the start of the relevant financial year.
Is the opting-out resolution required to be notarised?
No. It is a standard shareholder resolution - written circular or general meeting. No notarisation required. No commercial register filing required. Retain in the company minute book for 10 years.
Can a company that opted out voluntarily reintroduce an auditor?
Yes. Opting-out is not irrevocable. The company can appoint a registered FAOA auditor at any subsequent AGM - for example, if a lender requires audited accounts as a loan covenant condition.