Swiss Company Formation. The Ultimate Tutorial

Starting your own business in Switzerland in comparison with the rest countries is simple and at the same time complicated. Switzerland is a Confederation of several cantons where some of which are solidly regulated. Those who desire to start their own business in the country may begin with a usual partnership avoiding many technical issues. Once the registration process is over the enterprise owner will have a Unique Enterprise Identification Number.

How to create a company in Switzerland

Swiss company formation requires several steps. The first thing that must be done in this direction is to study carefully whether your service or a product has enough desirability. You need to determine who your rivals are and what they achieved.

In general, you will need to have an overall understanding if your company will be able to withstand the test of time. You will require a diligent investigation of the overall manageability of your ideas. You may plan your business objectives as soon as you gather all the necessary data regarding the local market targeted for the implementation of your enterprise.

Important issues that must be taken into consideration

Further, you may have a look at the list of important questions. The answers will give you a clear idea about the feasibility of your prospective business:

  • Is it difficult to initiate an enterprise in Switzerland and are you prepared to complete all required operations?
  • What amount of investments do you need to contribute to your business in Switzerland?
  • What is the most promising sector of industry in Switzerland where you can succeed and prosper?
  • What kind of production or service you will offer?
  • Can you keep your business idea safe from your rivals?
  • Does a market for your products or service exist?
  • What special skills are required for maintaining your enterprise?
  • Can you provide training for your workers?
  • What difference you will create entering the market?

Once you are ready to respond to all these questions you may proceed with your business plan. Further, we will review seven types of business structures legal in Switzerland:

  • Single-owner enterprise. Those individuals who work for themselves prefer this type of business. Freelancers, sole entrepreneurs, and small businesses usually choose this structure. The distinguishing feature of such companies is that at least one of the members must be a Swiss resident and the name of the company must include the name of its owner. They are supposed to have unlimited liability.
  • Ordinary partnership. A general partnership contains a group of people that runs a commercial business. It looks very much the same as the previous structure but there is a number of members involved. This type does not demand any limited capital. All have to be Swiss residents and the enterprise must be located in Switzerland. In addition, the business name must include one of the partners’ names.
  • Limited partnership. This type of partnership is not popular and exists as a form of general partnership. The key difference is that a limited partnership is liable only for a certain amount of liability whereas general partnership shares unlimited liability. It takes the Chamber of Commerce to register this type of enterprise.
  • Joint-stock company. AG/SA. A widespread sort of enterprises introduced as independent entities. A director or at least one of the members of the board must have a legal Swiss residency. 
  • Limited liability Company. GmbH/Sàrl. Management and maintenance of such enterprise must be performed by all company members. Every shareholder of the company has to be registered with the Chamber.
  • Subsidiary. This type is legal and independent and is associated with an enterprise located abroad. It can be represented as JSC or LLC.
  • Branch. All branches are not independent of their holding companies located abroad but pay their taxes in Switzerland as any Swiss company does. The parent company takes over all liabilities. Such a business structure should include at least one Swiss resident.

Foreigners who want to create their business in Switzerland

Is it possible to become an expatriate and arrange your business in Switzerland? The answer is of course yes. Working in Switzerland demands your compliance with certain requirements. You must be a local resident, have a partner who is a Swiss resident, or be a local legal entity if you have the desire to establish your business in the country.

Accountancy requirements in Switzerland

All companies must run their bookkeeping reports. In addition, every enterprise must keep their accounting statements and all suchlike papers for 10 years and more. Don’t forget that the financial size of an enterprise determines the overall structure of accounting records.

The next list introduces all entities that must not keep records of the receipts and expenditures:

  • Associations and foundations that are not bound to register with the commercial register.
  • All foundations have the privilege of exemption in accordance with the Swiss Civil Code.
  • All sole proprietors whose annual sales revenues are lower than 500 thousand Swiss francs.

Is it expensive to start a company in Switzerland?

Administrative charges are relatively moderate. It takes from 700 Swiss francs to 1000 francs for sole traders and LLCs. Additional expenses may be required in the case when you decide to take advantage of an international law firm in Switzerland. It is worth it since time-consuming bureaucracy has always been annoying and professionals who may help you in the creation of your business are the real gift.

Taxes in Switzerland

Governmental corporate income tax is assigned for payment to all companies in Switzerland. All taxable profits are subject to change. 

Overall all businesses in the country pay taxes in the amount between 12% and 22%.

The conclusion

We are glad to admit that starting your business in Switzerland is completely achievable. Moreover, applying to a local law company will help you in the arrangement and settlement of many issues when it comes to establishing your company. Any disputable moments will be solved in a professional manner and beneficial advice will allow avoiding any hidden danger on your way to the creation of your future enterprise.

Interesting Related Article: “Is Switzerland Still a Tax Haven?