Capital Increase from Freely Disposable
Equity – An Overview

Recently, the Federal Commercial Registry has issued important clarifications on certain aspects of the concept of a capital increase from freely disposable equity under Swiss law. We have taken the opportunity to summarize all legal aspects and corporate steps, including important tax consequences, in a short briefing.

• A capital increase from freely disposable equity under Article 652d of the Swiss Code of Obligations (CO) enables a Swiss stock corporation (Aktiengesellschaft) to convert existing freely disposable equity into share capital.
• In principle, this requires up-to-date audited annual financial statements or interim financial statements, together with a positive assurance from the auditors, to serve as proof of coverage.
• In its Practice Notice (Praxismitteilung) 2/26 of 9 June 2026, the Federal Commercial Registry Office (Eidgenössisches Handelsregisteramt, EHRA) clarified the requirements for proof of coverage.
• These clarifications are of particular and practical relevance to companies subject to a limited audit or that have opted out of an audit.
• From a tax perspective, the choice of the equity capital positions used for the conversion is decisive: converting retained earnings reserves has withholding tax and income tax consequences (as bonus shares), whereas converting capital contribution reserves remains tax neutral.