Considered to be one of the most "globalized" economies, Switzerland is part of the group of the top 20 most developed countries in the world. With an area of just 41,290 square kilometers and a population of 7.3 million, it is among the first countries in the world in terms of per capita income in comparison to most EU countries. The unemployment rate in Switzerland is among the lowest in Europe.

An important feature of the Swiss economy is given by the large number of small and medium-sized enterprises with less than 250 employees. They account for 99.7% of the total number of Swiss companies and provide jobs for more than 70% of the working population. In the field of services, particularly in the private banking and insurance sectors, Swiss companies hold a dominant position globally.

Therefore, most entrepreneurs who want to start their own company are considering choosing Switzerland as a business location. The first step to open a company in Switzerland is to opt for the most suitable business structure. There are several possibilities, but the following are the most common business structures or better said types of Swiss companies suitable for entrepreneurs.

Sole proprietorship

This is a company that has just one owner, which must be a Swiss resident. It’s a business structure suitable for sole business owners of for professionals who are self-employed, such as individual entrepreneurs, freelancers and certain types of small businesses.

For sole proprietorships, the owner has unlimited liability and their name must be included in the name of the company. The company must be registered with the Swiss Commercial Register only if the annual income exceeds 100,000 CHF. Usually freelancers and service contractors only work in Switzerland for limited periods of time throughout the year, therefore it is recommended to pay attention to taxation rules and accounting requirements.

General partnership

A general partnership is a business structure based on an association of two or more natural or legal persons who operate a commercial business. All partners must be Swiss residents, but no minimum capital is required to form a general partnership in Switzerland. The name of one of the partners must be included in the name of the company. The company must be registered with the Swiss commercial register and all partners have unlimited liability. Due to the fact that the general partnership is not an incorporated enterprise, it is not a legal entity, but full accounts must be kept.

Limited partnership

The limited partnership in Switzerland is a business structure similar to the general partnership, but with the difference that limited partners have limited liability, while general partners have unlimited liability. It is a less common version of a general partnership, however all other legal requirements are the same.

Swiss corporation (AG)

The Swiss corporation is the most common form chosen to start a company. The AG must be formed by at least three shareholders. The liability of the company is limited to its assets. The minimum amount for the share capital must be 100,000 CHF, of which at least 50,000 CHF or 20% (for larger capital) must be fully paid in. The AG is formed following an incorporation procedure for which taxes and fees apply. The registration process takes a few weeks. After the registration process is completed, the company is recognized as an individual legal entity. The majority of the company’s board must be comprised of Swiss citizens or European citizens that are residents of Switzerland. For the AG, it is mandatory to appoint an auditor.

Swiss limited liability company (GmbH)

The Swiss GmbH is an independent legal entity that requires a minimum share capital of 20,000 CHF. At least one of the managing directors must be a Swiss resident and the company must have at least two shareholders, which don’t have to be Swiss citizens. The founders have the right to perform the duties of the governing bodies. Shares can be transferred, but the process is more difficult than in the case of an AG.

Swiss subsidiary

Foreign companies may open Swiss subsidiaries that are legally independent, but affiliated to parent companies. Usually the Swiss subsidiary takes the form of an AG or GmbH.

Swiss company branch

A Swiss company branch is financially independent, but legally dependent to the parent company. The foreign parent company is liable. Swiss company branches are taxed in Switzerland as Swiss companies.  At least one person with legal authority to represent the company must be a Swiss resident.

All types of business structures must maintain accounting records and associated documentation for at least ten years.

Switzerland is very open to foreign entrepreneurs and provides various tax incentives and grants on federal and cantonal level. Especially Swiss cantons offer various tax incentives to new businesses, regardless if they are local or foreign.


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