What Ukrainian and Russian founders must observe when forming a Swiss company: UBO review, EU sanctions packages, banking practice and SECO procedure.
Since Russia's attack on Ukraine on 24 February 2022, Swiss company formation with Ukraine or Russia involvement has become a distinct compliance topic. Switzerland has largely adopted the EU sanctions package, banks often refuse account openings with RU involvement, and even Ukrainians (not sanctioned themselves) must expect extended compliance review.
Note: This article supplements Founding a company as a foreigner for the UA/RU-specific aspect.
Swiss sanctions law — the basics
Switzerland is neutral but sanctions. Legal basis:
- Embargo Act (EmbG, SR 946.231) — general basis for adopting EU/UN sanctions
- Ordinance on Measures Ukraine (SR 946.231.176.72) — Russia/Belarus sanctions
Since February 2022, the Federal Council has adopted all EU sanctions packages against Russia and Belarus (15+ packages as of 2026). Adoption follows EU decision with 1–4 weeks delay.
Practical consequence: A person or entity on the EU sanctions list is most likely also on the Swiss list — and thus blocked for Swiss business.
What sanctioned persons may NOT do
- Hold assets in Switzerland (asset freeze) — banks must freeze accounts
- Be shareholder, member, beneficiary of a Swiss company
- Be board, manager of a Swiss company
- Enter the Schengen area (travel ban)
- Conduct business in certain sectors with Swiss involvement
UBO construction: even if a sanctioned person is not direct shareholder but economically beneficial (e.g. via straw man), the sanction applies. Banks and notaries must conduct UBO identification diligently.
Sectoral sanctions
Certain economic sectors with RU/BY involvement are generally sanctioned:
- Energy — import of Russian oil, gas, coal, uranium
- Finance — correspondent relations with listed Russian banks; SWIFT exclusion
- Technology & dual-use — chips, drones, encryption, military tech
- Luxury goods — watches, jewelry, wine above certain thresholds
- Media — RT, Sputnik and affiliated outlets
A Swiss GmbH planning business in these sectors with RU involvement needs prior SECO authorisation or must abandon entirely.
Practice for Ukrainian founders
Ukraine is not sanctioned. Ukrainians can:
- Form Swiss GmbH/AG/sole proprietorship
- Open Swiss bank accounts
- Function as Swiss managers/board members
- Build business relationships freely
But: Banks often do extended compliance:
- Source of funds — if share capital comes from Ukraine, origin must be cleanly documented (salary slips, sale documents, bank statements)
- Prior Russia business — if Ukrainian founder previously had RU business (typical pre-2014), a bank can be cautious
- Political connections — if founder qualifies as PEP (Politically Exposed Person), enhanced compliance
Practical tip: PostFinance, cantonal banks (ZKB, BCV, Raiffeisen) tend to be more open than UBS or large international banks. Status S holders have often easiest account opening due to Swiss connection.
Practice for Russian founders
Russia is sanctioned. Russian nationals are not automatically sanctioned — only named listed persons. But banks systematically refuse account opening with RU involvement, even when applicant is not personally listed.
What is possible:
- Formation of Swiss GmbH/AG if applicant is not listed and no UBO link to listed persons
- Conditions: valid Swiss/EU residence with permit, transparent fund origin, ideally lawyer confirmation of sanctions freedom
- Best chances at cantonal banks and PostFinance, significantly worse at UBS/Raiffeisen
What is difficult or impossible:
- UBO sanctions link exists (even if hidden) — strict refusal
- Business model touches sanctioned sectors
- Funds come from sanctioned Russian banks
- For RU nationals without EU/CH residence — bank acceptance minimal
SECO authorisations for sanctioned business
For business that would be sanctioned without authorisation, the SECO authorisation procedure exists:
- Humanitarian exceptions — food, medicines, energy supply for end consumers
- Existing contracts — phasing out deliveries from pre-sanction contracts
- Headquarters constellations — Swiss parent with Russian subsidiary handling CH/EU business
Procedure:
- Application at SECO with detailed justification
- Review by SECO + possibly other authorities (BAZG, FINMA)
- Processing time 3–6 months, longer with complexity
- Authorisation with conditions or refusal
Practically only mandates with qualified legal advice make it through — documentation and legal argumentation requirements are high.
Bank compliance — what to prepare as founder
Banks are obliged by the AML Act (GwG) and sectoral compliance rules (FATF, Wolfsberg) to carefully review UA/RU constellations. Preparation:
- Passport + IDs of all founders and UBOs
- Residence proof (Swiss permit, Status S document, EU residence proof)
- Source-of-funds proof — salary slips, asset statements, sale contracts (ideally 3–5 years retroactive)
- Business plan of the to-be-formed company
- UBO declaration with detailed participation chain
- Compliance declaration of sanctions freedom (can be lawyer-supported)
- CV with professional history (especially important for prior Russia business)
Bank processing time: 2–6 weeks for UA, 4–10 weeks for RU constellation.
Compliance penalties
- EmbG Art. 9: prison up to 1 year or monetary penalty for negligent violation; up to 5 years for intentional
- Bank fines by FINMA for deficient compliance — up to several million CHF
- Criminal responsibility of board and managers (Art. 6 VStrR)
- Reputational damage — banks mark person and company as "high risk"
When legal advice is mandatory
- Before any formation with RU/BY involvement — sanctions due diligence
- Complex participation chains with foundations, trusts, offshore structures
- Business model touches sanctioned sectors — SECO pre-clarification
- Bank refusal — second opinion, alternative bank strategy
- Fund origin from Russia — clean documentation
- Prior RU business relationships of founder — work up compliance history
- Status S + Russia stay — complex constellation
Related topics
Official sources
Frequently asked questions
Has Switzerland adopted EU sanctions against Russia?
Yes, largely. Since 28 February 2022 the Federal Council has adopted the EU sanctions packages against Russia and Belarus (Ordinance on Measures in Connection with the Situation in Ukraine, SR 946.231.176.72). Switzerland follows EU list updates with a short delay.
Are Ukrainians affected by sanctions?
No, Ukrainians as nationals are not sanctioned — on the contrary, EU/CH sanctions are directed against Russia and Belarus in favour of Ukraine. Ukrainians can regularly form companies. Banks however often do extended compliance review (source of funds, prior Russia business).
Can a Russian citizen form a company in Switzerland?
Yes, if not personally sanctioned and no UBO link to sanctioned persons/entities. Practically very difficult due to restrictive bank practice — Swiss banks systematically refuse account opening with RU involvement. Solution often via cantonal banks or PostFinance with detailed compliance documentation.
What is a UBO check?
Ultimate Beneficial Owner — economically beneficial person. The bank and notary must establish who is ultimately economically benefited along a participation chain. Even 25% shares of capital or voting rights qualify as UBO (Art. 4 AML Act). UBOs on the sanctions list block formation.
Which sanctions lists must I check?
Swiss list (SECO search tool at seco.admin.ch), EU list, UN list, US OFAC SDN list. The Swiss list is binding for Swiss banks and notaries. EU/US lists can still be indirectly relevant because Swiss banks often must meet compliance requirements of their correspondent banks.
Which sectors are especially sanctioned in Russia?
Energy (oil, gas, coal), finance (Russian banks on SWIFT exclusion), technology (dual-use goods, chips), luxury goods, media. A Swiss company planning business in these sectors with RU involvement needs SECO authorisation or must abandon entirely.
How long does sanctions compliance review take?
At notary: fast (short SECO database search). At bank: 2–6 weeks for comprehensive compliance in UA/RU constellations. SECO authorisation for sanctioned business: 3–6 months, often longer.