Swiss Nominee Director: How It Works, Legal Risks and AMLA Obligations

Swiss law requires that at least one person authorised to represent a Swiss AG or GmbH is domiciled in Switzerland. For foreign founders who are not Swiss residents, a nominee director — a licensed Swiss fiduciary (Treuhänder) appointed to the board solely to satisfy the residency requirement — is the established legal solution. The nominee director's name appears in the commercial register. The beneficial owner retains full operational control through a notarised Power of Attorney. This guide covers how the structure works, the legal instruments involved, the liability and anti-money laundering obligations the nominee bears, and the scenarios where nominee arrangements are not permitted.

The Swiss Residency Requirement Under OR Art. 718(4) and OR Art. 814(3)

The residency obligation for Swiss company directors is embedded in the Swiss Code of Obligations (Obligationenrecht, OR). It is not a discretionary requirement — it is a mandatory condition for commercial register (ZEFIX) registration and ongoing compliance.

For a Swiss AG (Aktiengesellschaft), OR Art. 718(4) states that the board of directors must ensure that at least one member with authority to represent the company — whether with individual or joint signing power — is domiciled in Switzerland. For a Swiss GmbH (Gesellschaft mit beschränkter Haftung), OR Art. 814(3) imposes the same obligation: at least one managing officer with sole or joint signing authority must maintain a Swiss domicile.

The test is domicile, not nationality. A Swiss passport holder who lives abroad does not satisfy the requirement. An EU citizen registered as a Zug resident does. The domicile must be a genuine, registered residential address in Switzerland — a virtual office or correspondence address does not qualify. Failure to maintain a qualifying resident signatory is grounds for registration refusal at the time of formation and a compliance violation thereafter. The cantonal commercial register office (Handelsregisteramt) will not accept formation documents that do not name a Switzerland-domiciled authorised signatory.

For foreign founders who are not Swiss residents and do not plan to relocate, the standard solution is to appoint a nominee director who already holds Swiss domicile to fill the signatory role. Alternatively, the founder can obtain a Swiss B permit and relocate — a process described in the guide to Swiss work permits for company directors. The nominee director route is available immediately; the permit route requires months of preparation.

What a Nominee Director Does — and Does Not Do

The defining characteristic of a Swiss nominee director arrangement is the separation between legal representation and operational management. The nominee director is appointed to the board and appears in ZEFIX with signing authority. This satisfies OR Art. 718(4) or OR Art. 814(3). Beyond that, the nominee's role is deliberately limited.

A properly documented nominee director does not manage the company's day-to-day operations, does not independently enter commercial contracts, does not make investment decisions, and does not communicate with clients or suppliers on behalf of the company without specific written instruction from the beneficial owner. The Mandatsvertrag (mandate agreement) between the nominee and the beneficial owner defines this narrow scope explicitly.

Operational authority flows instead to the beneficial owner through a notarised Power of Attorney (Vollmacht). The Power of Attorney grants the beneficial owner — or a designated manager — the authority to bind the company in commercial matters, sign contracts, operate corporate bank accounts, and represent the company in dealings with third parties. The beneficial owner acts with full corporate authority without appearing on the board or in the commercial register as a director.

This structure is entirely lawful under Swiss law. It does not affect the company's legal personality, Swiss tax status, or ability to conduct business. Swiss commercial counterparties and public authorities are accustomed to it. Swiss banks conduct enhanced due diligence on companies with nominee arrangements — this is standard AML practice and not a bar to banking.

The Four Key Legal Instruments

A nominee director arrangement requires four instruments, each serving a distinct legal function. Omitting any one of them creates structural risk — either for the nominee or for the beneficial owner.

These four documents work as a system. The Power of Attorney creates the operational channel. The Mandatsvertrag defines what the nominee can and cannot do. The indemnification agreement makes accepting the mandate commercially rational for a professional fiduciary. The resignation letter ensures the beneficial owner can replace the nominee without litigation if the relationship breaks down. All four are standard in professional nominee engagements in Switzerland.

Legal Liability of the Nominee Director

The most misunderstood aspect of Swiss nominee director structures is liability. A private side agreement between the nominee and the beneficial owner does not protect the nominee from Swiss statutory liability obligations. Under Swiss law, a registered director is liable for the proper management of the company regardless of any private arrangement with the beneficial owner.

The primary liability provision is OR Art. 754, which holds board members personally liable for damage caused intentionally or through negligence in the performance of their duties. For a GmbH, the equivalent is OR Art. 827. These provisions cannot be contracted away. The indemnification agreement compensates the nominee if liability is incurred — it does not prevent liability from arising.

Key areas of liability exposure for a Swiss nominee director include:

• ●Over-indebtedness and insolvency notification (OR Art. 725): A director who knows or should know that the company is over-indebted must notify the judge immediately. Failure to do so creates personal liability for creditors' losses. This obligation falls on the nominee director as the registered board member, regardless of who manages the company.
• ●Tax obligations: The nominee bears responsibility for ensuring the company files Swiss tax returns on time (Verrechnungssteuer, Mehrwertsteuer/VAT, and corporate income tax). Persistent non-compliance can result in personal surcharges assessed against board members by the Swiss Federal Tax Administration (ESTV).
• ●Social security contributions (AHV/IV/ALV): The board of directors is responsible for ensuring the company registers with and pays Swiss social insurance contributions for all employees. Board members can be made jointly and severally liable for unpaid AHV contributions under AHVG Art. 52.
• ●Criminal law exposure: Serious violations — fraudulent balance sheet preparation, illegal acceptance of deposits, operating without required FINMA authorisation — carry criminal sanctions applicable to the registered directors. A nominee director who is unaware of the company's actual activities because the beneficial owner withheld information can still be investigated as the registered board member.

For these reasons, Swiss professional fiduciaries who offer nominee director services impose strict conditions: full KYC on the beneficial owner before accepting the mandate, access to the company's accounts and financial statements, the right to resign immediately if they become aware of illegal activity, and D&O liability insurance coverage. The indemnification agreement from the beneficial owner — ideally backed by a personal guarantee or security deposit — is non-negotiable.

AMLA Obligations: KYC, Source of Funds and Ongoing Monitoring

A Swiss fiduciary acting as a nominee director is a financial intermediary subject to the Swiss Anti-Money Laundering Act (Geldwäschereigesetz, GwG/AMLA). This is not optional. Fiduciaries in Switzerland are supervised either directly by FINMA or through a recognised self-regulatory organisation (SRO) such as the VQF or Treuhand-Kammer. Operating as a fiduciary nominee without SRO membership or direct FINMA authorisation is itself a regulatory offence.

The AMLA due diligence obligations that apply to a nominee director before accepting and during a mandate include:

• ●Identity verification of the beneficial owner (GwG Art. 3–4): The fiduciary must verify the identity of the natural person who is the ultimate beneficial owner of the company using passport, government-issued ID, and proof of address. Certified copies are standard for remote onboarding.
• ●Source of funds verification: The nominee must obtain a written declaration and supporting evidence of the origin of the funds used to capitalise the company (share capital payment) and to fund its ongoing operations. Bank statements, tax returns, or audited accounts demonstrating legitimate income are the standard evidence set.
• ●Business purpose and risk assessment: The nature of the company's business, its intended clients and markets, and its anticipated transaction volumes must be documented and assessed for money laundering risk. High-risk sectors (crypto, cash-intensive businesses, politically exposed persons) require enhanced due diligence.
• ●Politically Exposed Persons (PEP) screening: If the beneficial owner is a current or former politically exposed person or a close associate of one, enhanced due diligence applies. The fiduciary must obtain senior management approval before accepting the mandate and apply increased monitoring throughout.
• ●Ongoing transaction monitoring: AMLA obligations do not end at onboarding. The fiduciary must monitor the business relationship for unusual transactions or changes in the beneficial owner's circumstances and file a Suspicious Activity Report (Meldung) with the Money Laundering Reporting Office Switzerland (MROS) if suspicion of money laundering or terrorist financing arises.
• ●Record retention (GwG Art. 7): All KYC documentation and transaction records must be retained for a minimum of ten years after the end of the business relationship.

The Swiss Parliament's revision of AMLA, adopted on 26 September 2025 and entering into force on 1 October 2026 (position as of 2026), extends AMLA obligations to advisors and consultants who set up, structure, or manage legal entities — a category that can cover nominee-type services. The scope of obliged persons is broadened, and the requirement for fiduciary nominees to register with a supervisory body becomes more explicitly enforced. Foreign-owned companies with Swiss nominee directors should confirm that their nominee's SRO membership and KYC file are current before the revised AMLA enters into force.

The Swiss Transparency Register (LETA) and Beneficial Owner Disclosure

Switzerland's Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners (LETA) was adopted by the Swiss Parliament on 26 September 2025. The referendum period lapsed unchallenged in January 2026, and the Act enters into force on 1 October 2026 (position as of 2026). It establishes a central federal Transparency Register (Transparenzregister), administered by the Federal Office of Justice, in which Swiss AG, GmbH, and similar legal entities must register the natural persons who are their ultimate beneficial owners. LETA and the revised AMLA enter into force on the same date.

Under LETA, a beneficial owner subject to registration is any natural person who, directly or indirectly, alone or in concert with others:

• ●Holds at least 25% of the capital or voting rights of the company; or
• ●Controls the company through other means (contractual arrangements, shareholder agreements, or de facto control).

Companies must collect and verify the beneficial owner's full name, date of birth, nationality, address, and the nature and extent of their control. The information must be kept current — any change in beneficial ownership must be reported within 30 days.

Critically, the LETA Transparency Register is not public. It is accessible only to designated Swiss authorities (criminal prosecution authorities, tax authorities, MROS and other authorities named in the Act) and, for AML due-diligence purposes, to financial intermediaries subject to the AMLA. The beneficial owner's details do not appear in the public ZEFIX commercial register extract. A nominee director's name continues to appear in ZEFIX as the registered board member; the beneficial owner's name appears only in the non-public Transparency Register.

An important consequence for existing Swiss companies: once LETA enters into force, companies that have not already identified and notified their beneficial owner (as required by the pre-LETA OR Art. 697j rules that have been in force since 2015) must register in the new central register within the transition period set by the Federal Council. Companies using nominee shareholder arrangements will need to ensure the underlying beneficial owner is registered in the LETA register, even if the nominee shareholder continues to hold the shares legally.

Nominee Shareholder (Treuhänder-Aktionär): How It Differs from Nominee Director

A nominee shareholder (Treuhänder-Aktionär or Treuhand-Gesellschafter) is a separate service from a nominee director, though the two are frequently combined. The distinction matters legally and for KYC purposes.

A nominee shareholder holds shares or GmbH Stammanteile in their own name in the share register but on behalf of the beneficial owner under a Treuhandvertrag (fiduciary agreement). The nominee shareholder exercises voting rights at shareholder meetings according to the beneficial owner's written instructions. The beneficial owner retains all economic rights — distributions, proceeds on exit — and all management decisions flow through the Power of Attorney.

Key legal points on Swiss nominee shareholding:

• ●OR Art. 697j beneficial owner notification (pre-LETA rules): Any natural person who directly or indirectly holds more than 25% of the shares of a Swiss AG must notify the company of their identity within one month of crossing that threshold. The company records this in its internal beneficial owner register. Under pre-LETA rules this register is not public but must be made available to Swiss authorities on request.
• ●CDB 20 Form A at banking: Swiss banks opening or maintaining accounts for companies with nominee shareholders require a Form A declaration under the Due Diligence Convention of the Swiss Bankers Association (CDB 20). Form A is a legally binding written statement identifying the natural person who is the beneficial owner of the account assets. A nominee shareholder structure does not permit the beneficial owner to remain unknown to the bank — banks are required to identify and verify the ultimate beneficial owner regardless of the legal ownership layer.
• ●AMLA obligations on nominee shareholder: A fiduciary acting as a nominee shareholder bears the same AMLA KYC and source-of-funds obligations as a nominee director. The structure does not reduce AMLA scrutiny — it increases it, because nominee shareholding is a recognised high-risk indicator under FATF guidance and Swiss SRO standards.

In practice, nominee shareholder services in Switzerland are less commonly used than nominee director services. Most foreign founders prefer to hold their shares directly — which is permitted even without Swiss residency — while using only a nominee director to satisfy the OR residency requirement. Nominee shareholding adds a layer of complexity and cost without a proportionate legal benefit in most commercial structures.

FINMA-Regulated Entities: Where Nominee Structures Are Not Permitted

The nominee director solution that works for commercial AG and GmbH structures is not available for entities requiring FINMA authorisation. This is a firm regulatory line that foreign founders in the financial services sector must understand before choosing a structure.

FINMA supervises banks under the Banking Act (BankG), securities firms, fund management companies under the Collective Investment Schemes Act (KAG), portfolio managers and trustees under the Financial Institutions Act (FINIG), and payment service providers. Across all these licence categories, FINMA requires direct, transparent beneficial ownership and management as a condition for authorisation.

FINMA's fitness and propriety (Fit & Proper) assessment covers all significant shareholders — those holding 10% or more of capital or voting rights — and all persons responsible for management and governance. The assessment requires unambiguous identification of the natural person who ultimately owns and controls the entity. A nominee director or nominee shareholder arrangement in which the registered controller is not the true beneficial owner does not satisfy FINMA's transparency requirements and will not be accepted in a licence application.

For a foreign founder seeking a FINMA licence for a Swiss financial institution, the beneficial owner must:

• ●Hold the relevant shares directly, not through a nominee;
• ●Be named in the FINMA application documents as the significant shareholder;
• ●Undergo FINMA's Fit & Proper review of professional and personal background; and
• ●Be prepared to justify the source of funds used for the capitalisation of the licensed entity to FINMA's standard.

Companies that use nominee structures for non-regulated Swiss subsidiaries but seek FINMA authorisation for a related entity should obtain specialist legal advice on ring-fencing the two structures to avoid FINMA's group supervision extending to the nominee-held entities.

Practical Use Cases: When Foreign Founders Use Nominee Directors

The nominee director arrangement serves a well-defined set of commercial scenarios. Understanding where it fits — and where it does not — helps foreign founders choose the right structure from the outset.

Cost, Duration and Termination of a Nominee Director Mandate

The commercial terms of a Swiss nominee director mandate are determined by agreement between the nominee fiduciary and the beneficial owner. There are no statutory fee schedules. Market rates in Zug and other Swiss financial centres reflect the nominee's liability exposure, the complexity of the company's business, and the level of ongoing compliance monitoring required.

Indicative annual fees for a nominee director mandate from a Swiss licensed fiduciary range from CHF 3,000 to CHF 12,000 per year depending on business complexity, with additional fees for extraordinary actions (signing notarial deeds, attending shareholder meetings, bank signatory appearances). These figures are indicative market ranges, not quoted fees, and should be confirmed with the relevant fiduciary.

Mandate duration is typically open-ended with rolling annual renewal, subject to termination by either party on written notice. The pre-signed undated resignation letter ensures the beneficial owner can terminate the nominee's board position at any time — without waiting for a notice period — by dating and submitting the resignation letter to ZEFIX. The Mandatsvertrag governs financial settlement on termination, including outstanding fees and the return of company documents.

A change in nominee director requires filing an amended board resolution and new signatory notification at the cantonal Handelsregisteramt. The updated entry in ZEFIX typically reflects within 5 to 10 working days of filing. A cantonal registration fee applies to the amendment; the amount varies by canton.

For the underlying formation process that typically precedes a nominee director appointment, see the guide to Swiss company formation and the specific entity overviews for Swiss AG formation. For full details of the resident signatory service, see the nominee director service page.

Goldblum & Partner AG has provided nominee director mandates and corporate compliance services to foreign founders and international holding structures from Baarerstrasse 25, 6300 Zug since 2007. All mandates are documented with full AMLA-compliant KYC, Mandatsvertrag, Vollmacht, and indemnification agreement. Contact us for a free consultation on whether a nominee director arrangement is appropriate for your Swiss company structure.

Legal note: this article reflects the position as of 2026. The revised Anti-Money Laundering Act (AMLA/GwG) and the Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners (LETA) were adopted by the Swiss Parliament on 26 September 2025 and enter into force on 1 October 2026; the implementing ordinances and operational details of the Transparency Register are still being finalised and should be checked on sif.admin.ch and fedlex.admin.ch before company structuring decisions are made. FINMA licensing requirements reflect published FINMA guidance. CHF figures are indicative market ranges, not quoted fees. This article does not constitute legal advice.