Complete Guide to Registering a Company in Switzerland

Business Opportunities in Switzerland

Switzerland is ideally positioned as a doorway to EU markets. It acts as a test market for companies to analyze their innovations in high-tech and consumer goods. It is among the top R&D nations in the world, and there is an opportunity for collaboration in industries including biotechnology, MedTech, nanotechnology, clean technology, and renewable energy.

The finest goods to sell in Switzerland are those with a moderate level of technological sophistication. For instance, due to the high per-capita consumption of computers and the internet in Switzerland, the country is a sophisticated market for American technological products.

The nation offers a skilled workforce with high productivity and creativity levels. Switzerland has a stable and efficient government and a flexible labor market. In addition, Switzerland is a country with low tax rates and levies. This makes it an attractive and affordable option for international companies looking to start a business in Switzerland. 

Moreover, as per the World Bank’s Ease of Doing Business Report 2020, Switzerland ranks 36th out of 190 economies in terms of starting a business, protecting minority businesses, and registering properties. The nation offers a relaxed business culture.  

Companies looking to expand internationally might take advantage of Switzerland’s growing economy and establish a presence there. Read on for information on what is needed to start a business in Switzerland.

Benefits of Starting a Business in Switzerland

There are various benefits for business owners who choose to set up a business in Switzerland:

• Stable economy
  As a company owner, you should research the economic climate of the country where you intend to base your operation. Switzerland has one of the world’s wealthiest, most prosperous, and 20th most successful economies. Most companies favor a stable economy since it enables investors to enjoy growth and quickly pass the break-even threshold. 
• Freedom to select the business entity
  Depending on initial investment and the number of stockholders, companies can select from various business entity kinds. Knowing the different business models accessible as an investor will enable you to determine the best course of action.
• Double Tax Agreement (DTA)
  Tax is one of the primary priorities for new investors when it comes to incorporating a firm. To ease up this issue, the Swiss Government has signed a Double Taxation Agreement (DTA with 60 countries. The level of value-added tax in Switzerland is by far the least in all of Europe. Value-added tax (VAT) is generally 8%. However, goods and services connected to medical treatment and connection are entirely exempt.
• Skilled workforce
  The labor market in Switzerland is adaptable, giving corporate investors the freedom to enter the marketplace and establish their operations there. With a staggering 79.6% employment rate, Switzerland holds the second-highest place in workforce participation. The area also allows business investors to employ international employees and workers according to their needs.
• Business-friendly environment
  A business-friendly environment refers to the state’s pro-business incentives offered to startups. The Swiss government’s objective is to treat businesses and prospective buyers like customers. Business people can easily find advisors to help them through the relocation process.

Requirements for Starting a Business in Switzerland

Setting up a company in Switzerland could seem like a good idea, and it becomes more accessible with the right information. 

Companies must learn the correct steps to set up business in Switzerland. The following are the requirements to do business in Switzerland:

Reserving the company’s name

The company name must reflect the company’s ownership structure and must be unique from other business name registration in Switzerland. 

Director and founder

While setting up a business in Switzerland, companies require at least one founder. The firm director must be a Swiss national or authorized resident.

Charter capital

A GmbH’s charter capital is 20,000 CHF, and an AG’s is 100,000 CHF. There are no prerequisites for a partnership or an Einzelunternehmen.

Bylaws

Companies must prepare bylaws for the company registration process in Switzerland.  In the company’s bylaws, you must state the name of the business, the reason for its establishment, its address, the size of the capital contribution, and the members’ rights and responsibilities.

Types of Business Structures in Switzerland

Any of the following business structures are available to you when establishing a company in Switzerland:

Sole proprietorship

• This is among the most common types of business entities in Switzerland.  
• It is suitable for those who operate alone or are independent contractors, including freelancers, small companies, and single entrepreneurs. 
• A sole proprietorship is managed and owned by an individual who must be a Swiss resident. 
• Sole proprietorships do not exist as separate legal entities. , 
• There is unlimited liability, and all business revenues are taxed at the owner’s personal rate. 
• Setting up a sole proprietorship is easy. You only need to sign up for your business in the trade register, take care of your social insurance needs (as well as any employee needs), and register for VAT, if necessary.

General partnership

• Legally, a general partnership is similar to a sole proprietorship. 
• The main distinction is that, in a general partnership,  more than one person is involved. 
• All owners have unlimited liability and contribute individual taxes depending on their portion of the business’s revenues. 
• In a general partnership, the company does not pay corporate tax.

Limited partnership

• It is a partnership between a minimum of two partners in which at least one has unlimited personal liability, and at least one has limited liability. This means that their financial possessions above the amount they have been involved in the company cannot be affected in the occasion of company debts or insolvency.
• Limited partners only have a few obligations and rights. They are not allowed to supervise the company’s overall management. 
• The limited partnership structure is typically adopted if an unrestricted business (sole proprietorship or general partnership) wants to obtain extra funds.

Joint-stock company (SA/AG)

• It is the most typical business structure.
• A joint stock company, also called a limited company, is an independent legal entity.
• The SA/AG shall have at least one stockholder and one director residing in Switzerland. Each shareholder is treated as an employee. 
• The company pays a distinct corporate tax. 
• To set up SA/AG, companies require a minimum capital of CHF 100,000, with 20% paid immediately. 
• Liability is restricted to the worth of the firm’s profits (this must be at least CHF 50,000). 
• The business must adhere to official formation and registration requirements. This entails drafting bylaws and creating a separate bank account for the firm.

Limited liability company

• Limited liability companies must have at minimum one shareholder and director who is a Swiss citizen and is a distinct legal body. 
• A minimum capital of CHF 20,000 is required. 
• All stockholders are jointly responsible for the company’s debts up to the authorized principal sum.
• There are no limitations on the total number of shareholders, but each must make a minimum investment of CHF 100.

Cooperative company

• Cooperative firms are focused more on earning a profit. 
• At least seven board members/ partners are required to set up a cooperative company. 
• Cooperatives are not required to have a minimum amount of capital, but they must register with the trade office. 
• The words société coopérative must be present in the official company name.

Company Registration Process

The company registration process in Switzerland starts with deciding the legal business structure for your company. The other steps required for offshore company registration in Switzerland are:

Step 1: Business name registration in Switzerland

• This is the initial step in the Swiss business registration process. 
• In Switzerland, all companies are required to register their company names. This can be done online through the EasyGov website. 
• Business names must be distinct; however, you can search the Central Business Name Index for already-used names. 
• Business names for sole proprietorships and partnerships must both include the name of at least one partner. 
• The Swiss Business and Enterprise Register (BER) automatically adds and issues you a Unique Enterprise ID Number (UID) when you register.

Step 2: The selection of company officers

• The kind of firm ownership will determine the administrative structure of the organization.
• Some more common company structures in Switzerland include:

1. 1. Establishing a bank account for the charter capital’s deposit
   2. In order to register a business in Switzerland, you must deposit the necessary amount of capital contribution. 
   3. The charter capital needs to be deposited into the designated bank account. 
   4. The initial opening-account charge is 200 CHF, but it is typically higher.

Step 3: Creating the business’s corporate papers, including bylaws

• Companies are required to visit a notary public to register a corporation in Switzerland. 
• A sole proprietorship is easier to register; you may even submit an online system to create a business with this type of ownership.
• You must provide a bank statement verifying the payment of the capital contribution in the following proportions to the notary and all other organizational paperwork when you visit.
• Although only 50,000 CHF can be deposited at the time of Swiss business registration, the amount for an AG is 100,000 CHF, and the amount for a GmbH is 20,000 CHF.
• The notary will prepare an application to register a company, verify the signatures, and certify the business bylaws, the official registry act, the Lex Friedrich declaration, the Stampa declaration, and any other documents that require a declaration of non-financial investment. 
• The fee for notarial services is 0.1% of the business charter capital, although it can be at least 500 CHF or more than 5,000 CHF. Additionally, there is a fee of 20 CHF for every sign verification.

Step 4: Submission of the necessary paperwork to the Swiss Trade Register

• The trade register can receive the notarized company documents: by registered mail, regular mail, or a dedicated website.
• In Switzerland, there is a registration fee of 600 to 10,000 CHF. The Trade Register will issue the new company’s information, including the identities of its shareholders, in a Swiss business publication after reviewing the application materials. 

Step 5: Making the stamp duty payment

• Stamp duty is required when the business capital exceeds 1,000,000 CHF at 1% of the capital contribution. 
• Following the company registration date, you must pay within 30 days.

Step 6: VAT registration for the business

• When a Swiss-registered company earns more than 100,000 CHF in annual revenue, it must register for VAT. 
• The firm has 30 days from the time the threshold is met to enroll for VAT with the nation’s tax office.

After completing the Swiss company registration procedure, you can register your business as an employer. After that, you can start your business and appoint more employees.

What is the Cost of incorporating a Firm in Switzerland?

In Switzerland, the standard federal business registration fee is CHF 600. Once cantons add surcharges, the final amount is typically closer to CHF 1,000. Then, depending on the intricacy and canton, notary costs might range from about CHF 500 to many thousand francs. Compared to other cantons, like Zurich, agencies are more costly in Geneva and Vaud.

Are Foreigners on Specific Passes Allowed to Start a Business in Switzerland?

The Swiss constitution allows anyone to start a business in Switzerland, including foreigners. To start a business in Switzerland, you require the following:

• If an EU/EFTA citizen does not already hold a B or C permit, they must apply for a B permit (usable for up to five years) with their relevant cantonal authority.

• Non-EU/EFTA nationals can also start a business in Switzerland. However, they must have a C settlement permit, or they are the spouse of a Swiss citizen or C permit holder, or an entrepreneur ready for a payout tax expenditure of CHF 150,000 and are eligible to open a firm.

• If you are from outside the EU/EFTA and do not match the criteria mentioned above, you must appeal through the cantonal authorities in the area where you wish to establish your firm. You have to persuade them of your enterprise’s advantages to the regional economy and labor market. After you get the approval, apply for a B residence permit. You may be eligible for a temporary L permit in some circumstances, although these typically have a two-year maximum validity period.

Government Assistance for Foreign-owned Businesses in Switzerland

Because of its political and economic stability, open and just legal system, dependable and extensive infrastructure, and thriving financial markets, Switzerland is a desirable location for foreign investment. The government supports you in several ways when you set up an offshore company in Switzerland. 

• In some situations, tax benefits, such as tax breaks for new businesses for up to ten years, have been employed by a number of Swiss cantons to entice capital to their regions. The Federal Act on Tax Reform and Swiss Pension System Financing (TRAF), passed in response to complaints from the European Union, now obliges cantons to apply the same corporation taxation rates to both Swiss and international businesses. 
• However, the law permits cantons to keep determining their rates and providing tax breaks and other incentives to encourage business investment. The Code of Obligations, the Lex Friedrich/Koller, and the Cartel Law are the primary legislation that governs foreign investment in Switzerland. 
• Foreign investment is not screened. However, specific areas and businesses are subject to foreign investment rules. 
• FDI flows continue to be volatile because of the nation’s exposure to international trade and political stability. In Switzerland, Foreign Direct Investment (FDI) increased by 12.2 USD in June 2022. Switzerland is placed 10th in 2021 in the AT Kearney Foreign Direct Investment Confidence Index.

How Multiplier Can Help

Beginning a business abroad requires careful consideration for planning, investigation, and funds. After your company has been formally formed in Switzerland, you must hire the right staff to ensure effectiveness. The lengthy process could be streamlined with help from a multinational PEO-EOR business like Multiplier.

Multiplier lightens your HR workload by overseeing your worldwide employee team, taking care of wage processing, and onboarding new hires. Our professionals can help you grow your company internationally without the requirement to establish a subsidiary by assisting you in hiring individuals from outside. You get to explore new markets and focus on the operational aspects of your business while we handle the routine HR duties.