The total revenue in the Swiss business market is expected to show an annual growth rate of 10.22%, with a projected market volume of CHF28.05m by 2027. This means there is significant potential for economic expansion and profit. One of the best ways to capitalize on this growth is to buy an already-established business.
Shelf companies offer a compelling option for first-time foreign entrepreneurs or seasoned investors seeking a stable and secure environment to invest their assets.
Let's see what it takes to buy a shelf company in Switzerland and secure your business.
Buying vs. Incorporating a new company in Switzerland
Should you open a company or acquire an existing one? Here's a breakdown to help you decide:
Starting Fresh (Incorporation):
- Flexibility and Control: You have complete creative control over your brand name, business model, and long-term vision.
- Lower Initial Costs: While legalities are involved, the incorporation procedure typically requires less upfront investment than acquiring an established business.
- Time Commitment: Be prepared to invest significant time in market research, legal procedures, and establishing operational processes from the ground up.
- Building a Reputation: Building brand awareness and customer trust takes time and effort.
Acquiring an Existing Company (Buying):
- Faster Launch: Bypass the startup phase and begin operations almost immediately.
- Established Reputation: Inherit a potentially valuable asset – a positive brand reputation with existing clientele and supplier relationships.
- Operational Efficiency: Benefit from existing systems, processes, and potentially a trained workforce, reducing the time needed to get up and running smoothly.
- Higher Acquisition Costs: Purchasing a company can be a significant financial investment, including the purchase price and potential liabilities.
Here are some important considerations:
- Due Diligence is Crucial: Whether acquiring a shelf company or an established business, thorough financial and legal due diligence is essential to discover any hidden risks or liabilities. Seek the help of an expert during this process.
- Growth Potential: Consider your long-term vision. Will the existing company structure and resources support your future growth plans?
- Financing Options: Securing funding might be easier with an established company's track record, but explore financing options regardless of your chosen path.
Switzerland's Streamlined Approach
Fortunately, Switzerland offers a relatively quick and streamlined incorporation process compared to some countries. However, seeking guidance from an expert can guide you through the legalities and choose the most suitable legal form.
Note that incorporating a Swiss GmbH is cheaper. However, the legal form offers less flexibility than a stock company (AG). A GmbH is right for a small or medium-sized enterprise. You can change the legal form of your company if you want to expand your business in the future. However, you will need to fulfill certain conditions.
Switzerland has also developed a policy to promote the interests of foreign residents in its economy. Switzerland's tax policy creates benefits for owners of ready-made companies. However, this depends on where the shelf company is located, because each canton in Switzerland has its specific position on economic issues.
The Verdict
The best approach depends on your specific goals, resources, and risk tolerance. If you have a unique concept and the time to build your brand organically, incorporating it might be ideal. If speed and established infrastructure are priorities, acquiring an existing company could be the better fit.
Registering a shelf company
For many aspiring entrepreneurs, the goal of bypassing the startup process and acquiring an established company is undeniable. Now, that is what “shelf companies” offer. They are registered businesses that have ceased operations but are still listed in the commercial register. They have a clean legal history and are ready to be taken over by a new owner.
This option offers a significant advantage: speed. Acquiring a shelf company can be significantly faster than starting a business from scratch.
There are two main types of shelf companies to consider:
- Vintage Shelf Companies: These boast a history of past economic activity, potentially including a well-established name and reputation. However, it ensures the company has no outstanding debts or liabilities before proceeding. A reputable seller will guarantee a clean financial slate.
- Ready-Made Shelf Companies: These haven't conducted prior business activities but are fully registered and ready for immediate use. They offer a clean slate but lack the potential brand recognition of a vintage company.
Switzerland's tax policy benefits owners of ready-made companies. However, this depends on the canton in which the shelf company is located because each canton has a specific position on economic issues.
Either way, the key benefit of both options is swiftness. You can essentially buy a company "off the shelf" and start operating almost immediately. This allows you to focus your energy on building your business strategy and customer base rather than getting bogged down in registration hassles.
Note: While decisions regarding changes to the company's articles of association (a document outlining its core regulations) typically require a manager's meeting, it's essential to hold this meeting before finalizing the share transfer process. This ensures you have complete control over the company's direction from the outset.
Why Swiss shelf companies
Switzerland's reputation as a global business hub is undeniable. Here, a staggering 99% of all commercial companies are classified as Small and Medium-sized Enterprises (SMEs), contributing a remarkable two-thirds of the nation's jobs. So, how can you, an entrepreneur, tap into this dynamic market quickly and efficiently? Swiss shelf companies!
Here's why a Swiss shelf company might be the perfect springboard for your entrepreneurial pursuits:
- Prestige and Reputation: With their established history and potentially well-recognized names, Vintage shelf companies can instantly elevate your brand image.
- Favorable Business Environment: Switzerland consistently ranks among the top countries in the world for doing business. With its political stability, skilled workforce, and robust financial infrastructure, a Swiss-shelf company grants you immediate entry into this advantageous ecosystem.
- Fast Track to Operations: Acquiring a shelf company allows you to bypass the typical startup process and begin operations almost immediately. This frees up valuable time and resources to focus on developing your business strategy and attracting customers.
- Enhanced Credibility: For some investors, a company with a proven track record can be a game-changer when seeking access to credit or financing for expansion. A Swiss shelf company, particularly a vintage one, can project a sense of trustworthiness and stability, potentially increasing your chances of securing funding.
While not every business model will benefit equally from a shelf company, the advantages for those seeking a swift and prestigious entry into the Swiss market are indisputable.
You should carefully weigh the options and consider your specific goals to determine if a Swiss-shelf company is your perfect launchpad.
The advantages of purchasing a company in Switzerland
While shelf companies offer a fast-track approach, acquiring an established company in Switzerland presents a broader range of potential benefits. Here's why buying a Swiss company can be the strategic move for you:
- Hit the Ground Running: Skip the lengthy startup process typically associated with launching a new business from scratch. An existing company already has a legal framework, allowing you to begin operations much faster. Also, an already-made company has its legal address and a director based in Switzerland. There is no need to open a bank account; you have all the necessary certificates and permissions.
- Established Reputation: Depending on the company you acquire, you might inherit a valuable asset – a positive brand reputation with existing customers and suppliers. Leveraging this established trust can be a significant advantage, especially compared to building a brand from the ground up.
- Operational Efficiency: An existing company likely has established processes, systems, and potentially even a trained workforce. This can significantly reduce the time and resources needed to keep your business running smoothly.
- Existing Client Base: In the best-case scenario, acquiring a company grants you immediate access to a loyal customer base. This provides a solid foundation for growth and allows you to focus on expanding the business rather than starting from scratch.
- Access to Credit: Established companies with a proven track record of success might find it easier to secure financing from banks or investors.
Even though these advantages are enticing, you should conduct thorough research before acquiring any company. This involves meticulously evaluating the company's financial health, legal standing, and potential liabilities.
If you need support purchasing a shelf company in Switzerland, our specialists are ready to provide you with the best assistance to make informed and regret-free decisions. Be sure to reach out to SIGTAX for more insights on how to set up a Swiss company.
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