The most popular options to start your own business in Switzerland are either setting up a company or working as an independent person or as a part of a partnership. Regardless which option you choose, you will still need to follow the Swiss legislation, draft the paperwork and have the necessary start capital.
If you want to open a company in Switzerland, the most common business structures are Gesellschaft mit beschränkter Haftung (GmbH) or Societé à Responibilité Limité (SARL) – basically a private limited liability company; and Aktiengesellschaft (AG) or Societé Anonyme (SA).
Choosing a Swiss company name
Before you can use a name for commercial purposes, it must be approved by Swiss authorities. This is a necessary precaution, to make sure that there are no more businesses with the same name. The Switzerland Federal Registry lists all registered business name, therefore the first step you should take is checking with the registry if the desired name is not already taken.
Doing business as sole proprietorship or as a partnership
This option is suitable for those entrepreneurs who are not interested in company formation in Switzerland. They can either conduct business activities as a sole proprietorship, or being part of a limited or general partnership. If the annually turnover exceeds 100,000 CHF, the business must be registered with the Swiss Commercial Registry. Registrations are made with the cantonal office where the business activity is conducted.
Sole proprietorship
In the case of sole proprietorships, it is necessary to add a trading name. Special documentation is not required, just the filing of standard registration forms. A base registration fee is levied by the federal government and cantons add their own fees on top of that, therefore the total costs may vary from one canton to another.
Swiss partnerships
If two or more partners decide to conduct business activities together, they can do so under a partnership. Partnerships are usually formed between persons or companies and persons that provide the same or similar types of services or products. The partnership agreement must be drafted and notarized with a certified notary. There is no minimum capital requirement required and it is not necessary to draft company articles. However, if the business goes bankrupt, partners are personally liable.
Gesellschaft mit beschränkter Haftung (GmbH)
The minimum required share capital to set up a GmbH in Switzerland is 20,000 CHF and the company shareholders are listed in a public register. The necessary documentation includes the articles of association, meaning the company statues. The document will include the company’s purpose, object of activity, the governing bodies and details about the founders and the shareholders.
In addition, a constitutive act is also required, as well as proof of funding. This type of document is generally issued by a Swiss bank after the share capital is deposited. Once the company registration process is completed, the capital is transferred into the company’s bank accounts or the bank account becomes a business account for the company. The company’s profits are taxed on dividends and as personal income.
Aktiengesellschaft (AG)
A Swiss AG has a minimum required share capital of 100,000 CHF from which 50,000 or at least 20% must be paid up when the company is registered. This type of business structure is the most common one in Switzerland because it is suitable for various types of activities, including for larger companies, corporations and multinationals. The shareholders are not listed in a public registry. The articles of association include information about the company’s purpose, governing bodies, founding directors and shareholders. Same as a GmbH, it is necessary to provide proof of funding. One of the main advantages it that it is easier to change ownership of an AG than in the case of a GmbH.
The process of company formation in Switzerland
At least one of the company’s directors must be a Swiss resident. However, it is possible to hire company directors if none of the company’s founders is a Swiss resident. The company must be registered with a notary, but this can be made in any Swiss canton, not necessarily in the canton where the company will be located.
Corporate taxation
All companies that have 10 or more employees must audit their accounts annually. All businesses that generate more than 100,000 CHF in a year must register for VAT purposes.
Taxes are levied on federal, cantonal and municipal level.Federal tax rates are fixed, but cantonal taxes vary from one canton to another, as Swiss cantons are competing against each other to attract as much investors as possible. In addition, certain cantons offer tax incentives and advantages for foreign companies or for entrepreneurs who set up their businesses there.
Swiss trademarks
If creating and protecting a brand is important for your business, it is recommended to register a Swiss trademark. If the trademark is not identical or similar to other registered trademark, you can register it for 10 years and then subsequently reapply for another 10 years. In case of trademarks used outside of Switzerland, it is possible to register them globally with The World Intellectual Property Organization (WIPO), which is based in Geneva.
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