Thanks to its economic and political stability, central European location and the tax privileges it has introduced to draw foreign investors, Switzerland is the preferred country to start a business. Its constitution grants foreigners the right to start, operate, or hold financial stake in a small business in the country. If you’re one of those planning to set up shop there, here’s your guide to registering a company in Switzerland as a foreigner.
What are the requirements to register a company in Switzerland?
Here’s a step-by-step guide on what you’re required to do to register your business in Switzerland.
Open a Swiss bank account and put down the paid-in capital. Upon registration, your bank will make capital available into your account. Prepare to pay between CHF 200 and CHF 2,000 for bank fees.
Here’s your guide on how to open a bank account in Switzerland.
If the company you’re registering in Switzerland will regularly be banking and transferring money abroad, there are ways to cut on conversion costs and transfer fees. Banks charge above the mid market rate, the actual currency rate they use to move money from one bank to another.
Whereas if you transfer money through a virtual bank account by B2B Pay, you save a significant amount of these costs as well as get your money as soon as 24 hours depending on the bank. With a virtual bank account, you can secure your own European IBAN you can use to transfer money to 212 countries in 32 currencies using the same low rates.
Furnish the notary public with the articles of association of your company. Accomplish the application forms for registration and make sure all your documents are authenticated.
You need to sign the Stamp Declaration Form and the Lex Friedrich Declaration form (for your permit as a foreigner to purchase Swiss properties) and submit them to the Register of Commerce.
To obtain your company’s legal entity, submit the articles of association of the company to the Commercial Registry for registration. Registration fees will correspond to the number of shareholders and notarized signatures, so prepare to pay between CHF 600 and CH 10,000. Application processing time would take five to 9 days.
- Pay stamp tax through a post office or bank and watch out for the Swiss Official Gazette of Commerce where the Register of Commerce will publicize the official registration. On the day of registration, your company becomes a legal entity.
Deciding on the legal structure of your company is crucial when registering a company in Switzerland as it impacts your legal and company taxes. The country has been drawing local and foreign investors owing to its attractive tax policies. However, the tax impositions vary from one canton to another, that’s why it’s vital to conduct due diligence.
Consider the advantages and disadvantages of each structure and what suits your company best - whether it’s a sole proprietorship, a limited liability company, or a shareholding company. Let’s dive into the specifics.
Sole Proprietorship (SP)
This is the simplest business structure when setting up a company in Switzerland. In this structure, you as owner, have complete control over the company.
This is by far the easiest and cheapest way to start a business in Switzerland since it requires little to no capital and no imposed annual taxes. Companies with this business structure are not considered legal entities that’s why they are not taxable as companies. Each sole proprietor collectively files taxes for their private and business income and private and business assets.
This business structure best suits freelancers, small company owners and individually-owned companies, with individual owners who must have Swiss residence. The name of the individual owner must be revealed in the business name.
Companies with annual sales of CHF 100,000 or more are required to register with the Chamber of Commerce, as well as complete VAT registration.
Sole proprietorships can later change into Limited Liability Company (LLC). However, you will be required to pay social insurances from your income once the business hits CHF 2,300 annually. A detailed form on your business will be required together with a list of at least three customers to prove you’re not going into false self-employment.
The disadvantage of an SP is that liability is unlimited. You as owner are fully liable for your business’s debts. In times of financial hardships, your own personal assets are included in settling financial obligations should the need arise.
General Partnership (GP)
This structure consists of two or more partners signing a partnership agreement to jointly run a commercial business. It’s like a sole proprietorship but with two or more individuals involved. Limited capital is not required and just like SPs, GPs are not considered legal entities since they are not incorporated businesses, and thus, are not taxed as companies. Individual partners tax both their private and business income and assets collectively. However, they may be sued or file a suit under the name of the company. Both (or all) the partners bear unlimited joint liabilities for their company’s debts.
Partners in GPs must reside in Switzerland and must have a Swiss address. The company’s business name must bear the name of one of the partners. Once the partnership is registered, make sure to keep a complete record of profit and loss statements. As with SPs, GPs are mandated to register with the Chamber of Commerce and Commercial Registry.
Limited Partnership (LP)
Another type of partnership, a Limited Partnership is ideal for small private enterprises. It involved at least two partners: one takes the General Partner role with unlimited liability, while the other takes the limited partner role with liability limited to the value registered with the Commercial Register.
GPs looking to expand their financing base opt for this structure. In Switzerland, a start-up capital is not required of limited partnerships, but Chamber of Commerce registration is a must.
Limited Liability Company (LLC)
This type of legal entity is very common in Switzerland, also known as Gesellschaft mit beschränkter Haftung or GmbH for short. A GmbH is an incorporated company with one or more legal persons operating the business, but the company has a legal personality that is separate from those individual legal persons.
A Limited Liability Company proves to be the better option for many entrepreneurs and small businesses since it does not require a board of directors. It allows you to use an independent business name besides your family name. When the founders have access only to the limited amount for the capital invested in the business, an LLC is set up. The registration requires a minimum share capital of CHF 20,000, notary-signed founding documents and company bylaws. You will be required to pay value added tax (VAT) for income exceeding CHF 100,000, a corporate tax whose rates are set depending on the location and agreement with the tax departments, and capital share profits which are taxed at 35%. Unlike SP companies, a representative (with signing rights) has to live, have a work and residence permit in Switzerland.
Other features of LLCs:
- LLCs can go into any form of business activity stipulated in the articles of association of the company.
- LLCs must designate an executive director who resides in Switzerland.
- LLCs can have a single director represented by the shareholder of the company
- The shareholders’ liability in LLCs is limited to the amount of shares they have contributed in the capital of the business.
Stock Corporation (SC)
In Switzerland, stock corporations are known as Aktiengesellschaft (AG). This kind of establishment is investor-oriented and requires substantial investment to run. You will need a minimum share capital of CHF 100,000 with 20% of the amount paid at incorporation. Notary-signed official founding documents and company bylaws are required for registration. You will need to pay VAT for income exceeding CHF 100,000, corporate tax, and capital share profits which are taxed with 35%. A director/shareholder must have a Swiss residence. This establishment is ideal for more risky undertakings and has minimum liability to the instigator. Turnaround time to set up a stock corporation in Switzerland would be two to three weeks.
An advantage of registering a stock corporation as a holding company in Switzerland is the various tax cuts implemented by both the cantonal and federal governments. With this corporate legal structure, you may also register a Swiss office and set up a domiciliary firm where you manage and control your business from another country.
What documentation do you need to register a company in Switzerland?
If you come from one of the EU or EFTA countries, you have a competitive advantage owing to the Agreement of Free Movement of Persons. For one, citizens from these countries can have their Swiss residence even without a C permit. They just need to secure a B permit, which has a 5-year validity, to be able to set up a business. They also need to state and prove their purpose of activity.
The following documents are necessary as proof:
Valid bank account
Professional registry entry
Commercial registry henry
Social insurance proof for self-employed persons.
If you come from a country outside of the EU or EFTA, starting a business in Switzerland may not be as easy. You may also be asked for some special requirements, including securing a particular permit and measure up to the labor law standards. Nonetheless, opening your own company or establishing self-employment in Switzerland is still possible.
You have three options on how you can have a legal right to set up your own company in Switzerland without needing the services of a special firm. You can:
Have the right to self-employment in Switzerland by securing a C permit.
Marry a Swiss citizen
Marry an individual who has a C permit.
If you don’t have a C permit, you need to file an application to the cantonal authorities where you plan to set up your company. Additionally, your company needs to have a long-term positive impact on the labour market of Switzerland. Your business must substantially invest in and produce income for the Swiss economy.
You need a sound business plan to make it through the evaluation process. Make use of your business connections with other companies if you have any. Also attach the foundation charter and or the Commercial Register entry to your application.
Once you are given approval to start your own company, you will be sent an L permit, which is a short-term permit. This allows you to do business in Switzerland for 12 months. The permit is renewable for another 12 months, provided you pass the administration-organized labor law exam.
You can skip the elaborate process by hiring the services of a specialized firm. They will handle all bureaucracy hurdles for you and secure all the required permits.
How long does it take to register a company in Switzerland as a foreigner?
It takes just 2 to 6 weeks to set up a company in Switzerland provided you have all the requirements in hand. The processing time will depend on the canton you’ve chosen as a domicile for your company. For those who want an expedited process in registering your company, you can opt for the express procedure with the commercial register.
With your business plan, marketing strategy, and documents all set up, the rest of the steps would be easier with a specialized firm helping you through the process.
Plus, when opening a bank for your Swiss company, consider opening a virtual bank account by B2B to enjoy cheaper transfer fees and faster transfers.
- 1. What are the requirements to register a company in Switzerland?
- 2. Legal structures
- 3. Sole Proprietorship (SP)
- 4. General Partnership (GP)
- 5. Limited Partnership (LP)
- 6. Limited Liability Company (LLC)
- 7. Other features of LLCs:
- 8. Stock Corporation (SC)
- 9. What documentation do you need to register a company in Switzerland?
- 10. How long does it take to register a company in Switzerland as a foreigner?