Switzerland remains a top investment destination. The benefits of establishing opening a Swiss business are clear—from a vibrant economy, a stable business environment to a strategic position within the European market, and more, everything just seems right in Switzerland. If you are considering setting up your business in Switzerland, you will need to familiarize yourself with the laws and regulations imposed by the Swiss authorities.
Why incorporate in Switzerland?
Forming a company in Switzerland involves different aspects. One of the important steps entrepreneurs should take is research into their intended market. They should assess if their products and services are suitable for the Swiss market. Company registration is governed by legislature one has to familiarize with in order to make the process stress free as well choose the correct company form for their business.
- Stable environment
Switzerland offers a supportive and stable business environment. Depending on the business type, there are many initiatives that one can take advantage of to develop their businesses. The social, political and economic environment are also beneficial to businesses since Switzerland is considered stable and progressive in all aspects.
The tax regime employed in Switzerland is one of the main reasons many entrepreneurs are seeking to set up their businesses in the country. The structure of Swiss taxes are marginally beneficial and supportive of business growth—they are significantly lower than in other European territories. Tax chargeable varies depending on the municipality and commune where a business is set up. It is also affected by the nature of business activities conducted and their duration.
Taxes in Switzerland apply at three levels. These are the federal, cantonal and communal levels. This structure is applicable for all types of companies. The tax chargeable also exists in two forms, namely capital tax and income tax. The direct federal tax levied on the profit is fixed at 8.5% and therefore differs accordingly for each company. Cantonal taxes on profit and capital are based on the rate established by each canton. The rates range from 2% to 25% for the income tax, and 0.05% to 6% for the capital tax. They can be either fixed or progressive depending on the canton.
- Social law and wage bill
Switzerland is a competitive country in regards to it’s existing social law and wage bill. Salaries are considerably higher. But the wage costs are much lower in comparison to international average wage costs giving Switzerland the edge.
Starting a business in Switzerland as a foreigner
The regulations to follow are different depending on whether you are a national of a country of the EU and EFTA, or of a third country that is not a member of these two associations of states.
Business creation for EU and EFTA nationals
Nationals of the EU and EFTA member states benefit from the agreement on the free movement of persons. If you are a citizen of these countries, you have the right to live in Switzerland, to work and to develop an independent activity in the country.
As an independent contractor, the residence permit, valid for 5 years, is sufficient for working in Switzerland. When registering, however, you must provide proof of the existence of your activity, a business plan, a VAT number, a registration in the commercial register or accounting figures.
For the creation of the company, you have to choose the suitable legal form - joint stock company, limited liability company, sole proprietorship, partnership or limited partnership. Residence requirements are however different for each of them. For a sole proprietorship, an authorization of establishment or work is required.
If you intend to set up a limited liability company, one of the partners, the one representing the company, must reside in Switzerland. It is the same for a public limited company. For this, the representative must be a resident of the country.
Finally, for a partnership and limited partnership, authorizations for establishment and work are required.
If you want to buy real estate, as an EU citizen residing in Switzerland, you have the same rights as a Swiss citizen. For non-residents, these same rights are valid only if the property is used for commercial purposes.
Business creation for third-country nationals
In order to be self-employed in Switzerland, nationals of countries that are not EU or EFTA members must have a settlement permit. Spouses of Swiss citizens or persons holding this authorization also have the right to develop such activity.
Third-country nationals are required to submit an application to the cantonal authorities. They must fulfill the personal conditions required to stay in Switzerland. They are also obliged to provide evidence for the positive and lasting influence of their company on the Swiss labor market.
As for the creation of the company, the conditions are almost the same as for EU nationals. It will require a work or establishment permit for the founder, both for a limited partnership and a partnership. For a GmbH, the company must be represented by at least one resident. As for the AG, at least one of the persons entitled to represent it must reside in Switzerland.
The benefits of working with a trustee for a business start-up
A trust company is an organization that provides tailor-made advice and support to entrepreneurs. It takes care of the steps for the creation of the company, and even of its entire management. To start your business, you can count on the help of our experts.
The intervention frameworks of these firms are very extensive. The services provided for your company can be customized according to your needs. The benefits of such collaboration are obvious, especially for foreign entrepreneurs. Indeed, the experts mandated by these trustees have a better knowledge of the market. They can, therefore, provide you with a global and objective vision, which will help you to position your company.
Likewise, they know and master the laws relating to business creation. They can help you to choose the legal structure as well as for declarations to the competent authorities. The partnership with a trustee can be continued after the first steps of creating your business. It can thus continue to advise you on the management of your business and take charge of its financial management, accounting, preparation of annual accounts, personnel management, salary administration, and insurance management.