Is a nominee director liable for the company's actions in Switzerland?

A nominee director bears the same statutory liability as any Swiss AG director under Art. 754 OR (duty of care, loyalty, and diligence). Nominee arrangements include comprehensive indemnity agreements and powers of attorney, but these do not eliminate statutory liability to third parties. Both parties must understand and accept this allocation of risk.

Nominee Director Switzerland | Art. 718 OR Compliance Service

Q: What is the Swiss resident director requirement?

Art. 718 OR requires that at least one member of the board of directors or an authorised signatory of a Swiss AG be domiciled in Switzerland and have sole or joint signature authority. For a GmbH, Art. 804 para. 2 OR requires at least one managing director with sole signatory authority domiciled in Switzerland. Non-compliance invalidates the board's authority to bind the company.

Q: What is a nominee director in Switzerland?

A Swiss nominee director (or nominee managing director for a GmbH) is a Swiss-resident professional who appears in the Commercial Register to satisfy the Art. 718 or Art. 804 residency requirement, while operating under a detailed director service agreement, indemnity letter, and powers of attorney that establish the actual owner's control over the company.

A Swiss nominee director is a Swiss-resident professional who appears in the Commercial Register as a director or authorised signatory of a Swiss AG (satisfying Art. 718 OR) or as managing director of a GmbH (satisfying Art. 804 OR), while the actual beneficial owner retains operational control through a director service agreement, indemnity letter, and powers of attorney.

The Statutory Residency Requirement

Swiss law imposes a mandatory residency requirement for both AG and GmbH entities.

Swiss AG: Art. 718 OR

At least one member of the board of directors or one authorised signatory must be domiciled in Switzerland and have authority to sign alone or jointly on behalf of the company. This requirement has been in force since July 2015. Non-compliance does not void existing contracts but exposes the company to enforcement action and may cause the Commercial Register to query or refuse structural changes.

Swiss GmbH: Art. 804 Para. 2 OR

At least one managing director must be domiciled in Switzerland and have sole signatory authority. The GmbH requirement is stricter than the AG requirement: the qualifying person must have sole signature (not just joint signature). This person must appear in the Commercial Register as managing director with sole signatory power.

Requirement	Swiss AG (Art. 718 OR)	Swiss GmbH (Art. 804 OR)
Swiss domicile required	Yes: at least one director or signatory	Yes: at least one managing director
Signature authority required	Sole or joint	Sole (sole signature mandatory)
Can non-resident own company?	Yes: ownership has no residency restriction	Yes: quota holders have no residency restriction
Consequence of non-compliance	Register queries; possible enforcement action	Register queries; possible enforcement action

Our Nominee Director Service

Our nominee directors are Swiss-domiciled professionals with backgrounds in Swiss corporate law and fiduciary services. They are registered in the Commercial Register as required and operate under a standard framework of documents:

Director service agreement (defining scope, obligations, and limitations)
Comprehensive indemnity and hold-harmless letter from the beneficial owner
General power of attorney for the beneficial owner
Undated resignation letter (enabling the beneficial owner to replace the nominee at will)
Annual confirmation of continued compliance with Swiss residency requirement

Nominee Director Liability Under Swiss Law

A nominee director bears the same statutory liability as any Swiss AG director under Art. 754 OR: the duty of care, loyalty, and diligence of a reasonably prudent businessperson in the same position. This liability runs to the company, its shareholders, and third party creditors. It cannot be contractually eliminated by the director service agreement for claims brought by third parties.

The indemnity agreement between the nominee and the beneficial owner allocates this risk internally: if the beneficial owner's instructions cause the nominee to incur liability, the beneficial owner indemnifies the nominee. This indemnity is effective between the parties but does not reduce the nominee's exposure to third party claims under Art. 754 OR.

For this reason, our nominees require that all significant corporate decisions are documented and authorised in writing by the beneficial owner, and that the company maintains adequate D&O insurance where appropriate.

Setup Process

KYC and Onboarding

We conduct KYC on the beneficial owner and the company. Standard AML documentation required: passport, proof of address, source of funds confirmation where required.

Documentation Package

Director service agreement, indemnity letter, power of attorney, and undated resignation are prepared and signed by both parties before the nominee is registered.

Board / Management Registration

The nominee is appointed at a shareholders' (or quota holders') meeting and registered in the Commercial Register as part of the post-acquisition structural changes filing.

Ongoing Annual Renewal

Service renewed annually. Nominee confirms continued Swiss domicile. Any change in circumstances (relocation, personal constraints) triggers immediate notification and replacement.

Domiciliary Services vs FINMA-Regulated Nominee Structures

Swiss law distinguishes between domiciliary services (providing a registered address and administrative contact) and nominee director services (assuming a formal management role in the Commercial Register). Under the FINMA Circular on domiciliary companies, entities providing only an address without genuine operational substance are subject to enhanced regulatory scrutiny in specific contexts.

Our nominee director service covers the Art. 718 OR residency requirement for the purpose of post-acquisition register compliance. It is not a structure designed to establish false economic substance or to circumvent FINMA-regulated activities.

Frequently Asked Questions

What is the Swiss resident director requirement?

Art. 718 OR requires that at least one board member or authorised signatory of a Swiss AG be domiciled in Switzerland with sole or joint signature authority. For a GmbH, Art. 804 para. 2 OR requires at least one managing director with sole signatory authority domiciled in Switzerland.

What is a nominee director in Switzerland?

A Swiss nominee director is a Swiss-resident professional who appears in the Commercial Register to satisfy the Art. 718 or Art. 804 residency requirement, while the beneficial owner retains operational control through a director service agreement, indemnity letter, and powers of attorney.

Is a nominee director liable for the company's actions?

Yes, a nominee director bears the same statutory liability as any Swiss AG director under Art. 754 OR. The indemnity agreement between nominee and beneficial owner allocates this risk internally but does not eliminate the nominee's exposure to third-party claims. Both parties must understand this allocation before proceeding.

Can a nominee director be used to conceal the real owner?

No. Art. 697j OR requires beneficial owners of 25% or more of shares or quotas to declare their interest to the company's internal UBO register within 30 days of acquisition. Swiss authorities have database access to this information since January 2025. Nominee arrangements satisfy the Commercial Register residency requirement but do not constitute anonymity for beneficial ownership purposes.

Nominee Director Switzerland: Art. 718 OR Residency Requirement Satisfied from Day One