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7 helpful tips for company formation in Switzerland

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Do you want to venture into starting your own business? Switzerland is one of the countries in Europe with the highest number of start-ups per year. This circumstance may certainly be due to favorable conditions (such as stability, low taxes, political environment, etc.) that prevail in Switzerland.

Although the desire to start a business is certainly deeply rooted in many people, there is often a lack of practical knowledge about how to implement this idea in a successful manner.

After all, starting a business in Switzerland is not too complicated compared to other countries, but there are a few basic points that need to be taken very seriously. Here are 7 practical tips to really make the company formation process as smooth as possible.

Tip # 1: The right business idea at the right time

First of all, the business idea that forms the basis for further activities stands at the beginning of every business start-up. In the ideal case, an entrepreneur has a business idea that can be described as absolutely innovative and is unparalleled in the current market. However, this is not a compelling criterion for starting a business, as already proven business ideas in a modified form can be promising.

If the cornerstone of this business idea already exists, but the entrepreneur has doubts about the ability to put this idea into practice, it's a good idea to find a more experienced business partner to act as a co-founder for the Swiss company or to hold shares in the newly-formed company.

Tip # 2: Industry experience is valuable

It definitely can’t be harmful if an entrepreneur already has experience in the core business of the new company. Almost every industry has its peculiarities and pitfalls that a clever entrepreneur needs to know how to skim around.

The statistics collected so far show very clearly that industry-experienced founders are more likely to succeed in direct comparison to absolute newcomers to the industry, so that experience can sometimes make the difference. If the entrepreneur doesn’t have this experience, then definitely a partner should be brought on board who has the experience in the core business of the new Swiss company.

Tip # 3: Self-confidence is important to succeed

A big difference between the success and failure of the business project lies in the immediate will of the entrepreneur to really work out the economic success of the company. Weekly 60 to 70 working hours are not uncommon in Switzerland, especially in the early stages of the company.

Since many partners are required to form a company it’s also essential that the entrepreneur believes in themselves and the company project and knows to sell their idea. The challenges that need to be overcome must be tackled by the entrepreneur in a self-confident manner and with great commitment. This can’t be done without the absolute will to succeed.

Tip # 4: A perfectly designed business plan

Many banks, before deciding to issue a certificate, are keen to see the entrepreneur's business plan in advance. The business plan can be understood as a guide to the company and includes both the type and scope of financing and the calculated profitability of the business activity. The entrepreneur should, before discussing financing with the bank or contacting any investors, devote himself to this business plan in all its thoroughness.

Of course, the business plan should include the latest market developments and the risks to be expected so that any partners and banks can recognize that the entrepreneur is systematically approaching this project while taking into account any potential failures. Based on the business plan, an entrepreneur can respond to unforeseen market developments at a very early stage and take the necessary countermeasures very early in order to be able to steer the company through these challenges.

Tip # 5: The legal form of the Swiss company

The choice of legal form when starting a company in Switzerland is the first important decision that an entrepreneur has to make. There are different requirements in this regard, which of course also have a financial impact. While it’s difficult to regulate revenue, the level of spending can certainly be influenced.

Financial control is, therefore, one of the key measures that a company should focus on in the startup phase. Although the available financial resources should not be too tightly calculated, unnecessary expenditures should definitely be avoided so that the company can get a small financial cushion even in the initial phase. This is where tax planning comes into play.

Tip # 6: Knowledge about the competition

Although every entrepreneur is certainly focused on their own business, especially during the startup phase, it definitely doesn’t hurt to know the competition. This knowledge is ultimately important to be able to analyze their own market situation.

If the own company has a competitive advantage over its competitors shortly after the start-up phase, the entrepreneur should constantly strive to maintain the lead and expand it step by step. The Swiss market is in many ways very fast-paced and versatile so that the success must be worked out anew.

Tip # 7: Use experienced management

Not every company founder is automatically a good manager. As there is a great deal of core work to do, one great alternative is to get experienced partners to take over the management tasks and run the company jointly. In most cases, foreign citizens are required to have at least one Swiss company director, so it’s best to have some who has experience in this field.

Depending on the type of Swiss company that you want to establish or if you want to expand your business activities on the Swiss market through a company branch or a subsidiary, our Swiss company formation experts are here to offer you all the necessary support starting with the drafting of the company documents and throughout the company registration process.

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