What is a Swiss Verein?

Malcolm Tatum
Malcolm Tatum

The Swiss verein is a structure or organization that is recognized under the current composition of Swiss law. Essentially, it is a means of creating a legally recognized organization while not necessarily having to comply with a number of rules and regulations that are necessary for incorporation. Organizations and businesses that operate on an international basis commonly employ the approach of setting up as a Swiss verein.

The Swiss flag with the Matterhorn in the background.
The Swiss flag with the Matterhorn in the background.

Within the context of the laws of Switzerland, a verein may encompass many different types of organizations. In all cases, the Swiss organization would be defined and a non-governmental organization, or NGO. Social clubs, trade unions, international non-profit organizations, and even some types of business organizations utilize the construct.

When a business organization is established under the terms and conditions of a Swiss verein, it is inherent that the company is being established as a limited liability business. Further, a verein is characterized with a corporate organization that is decentralized. Regulators within the country of residence are directly responsible for the function of the organization within national boundaries, rather than each branch of the organization being managed by a central office that is located elsewhere.

Setting up an organization of this kind does not require a great deal of legal effort. The minimum requirements are that bylaws must be written and approved by at least two persons who will function as officers in the company. A governing board, such as a Board of Directors must also be elected, with each elected official meeting the requirements set forth in Swiss law. In addition, auditors who will monitor the financial dealings of the organization must be identified.

Because the organizational structure of a verein focuses on the operations of the branch or member company located within a specific country, this means that the regulatory standards of other countries do not necessarily apply. It is not unusual for lenders to request Letters of Credit or some sort of contractual guarantee from the member companies before lending funds to a domestic Swiss verein. This action essentially provides the lender with some type of legal recourse in the event the domestic member defaults and the assets are not sufficient to pay off the outstanding debt.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments

anon313175

What is the maximum number of Directors allowed in a Swiss Vereign?

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