While establishing a business as a sole proprietorship in Switzerland is simpler and easier than in other countries, it also comes with a few hurdles. If you are considering registering a sole proprietorship, you would do best to take note of the following to avoid unexpected costs and problems that may arise afterwards.

Check name availability first

The idea of ​​defining your logo and the corporate identity before the foundation and preparing the corresponding documents is understandable, but often the desired company name is not exactly the same for corporate law and / or trademark law reasons implemented. If everything is already prepared, the whole effort was in vain and you need to start again from the beginning

Use the company name only when everything has been clarified, the name checked and any rights have been acquired. Make sure that your company name is not already used or too similar with another one.

Swiss Commercial Registry entry

The entry in the Swiss Commercial Registry is mandatory only for a sole proprietorship with an annual turnover of at least 100, 000 CHF. Since the registration is associated with costs, which come at the beginning of your business activity, when the resources are usually scarce anyway, of course, the question of whether you should register your business or wait until it is mandatory is a valid one.

Depending on what intentions and plans you have, you will otherwise save in the wrong place. If you already have a network of existing customers without having to rely on new customers and you do not want to exceed the 100,000 CHF threshold, you can refrain from registering with the commercial register. However, if you are looking for new customers, the registration fee is definitely worth it, even if you do not reach the 100,000 CHF turnover. Why? The commercial registry entry guarantees that you can find potential customers in the company index. So they know all the important facts about your company: purpose, domicile, ownership. It is all about the creation of a basis of trust, which in turn can lead to long-term customer relationships.

Establish the business purpose

What should the product or service offer look like in a few months or years? Often new entrepreneurs have no answer. Understandably, one does not know how the whole thing develops and which forms it takes. Nevertheless, keep the business purpose description in the commercial register as general as possible - this guarantees you freedom of action and saves costs, because every modification is taxable. However, the actual activity of your company must be clear.

If you have specialized in something unique with your company, it certainly makes sense to formulate it in the purpose description. And beware: there are formulations that cause additional costs for insurances (insurance of additional risk classes).

The prior examination of your company purpose by an expert protects you against a possible rejection by the Commercial Registry Office or high insurance premiums.

Register for VAT purposes

From a purely legal point of view, VAT registration is required only from an annual turnover of 100, 000 CHF. Why does it make sense to voluntarily do this before? Everything you pay for input tax will be refunded to you using the effective billing method. If larger investments are made, a company subject to VAT can save a considerable amount of capital. If a company has no VAT number, it also seems very small and less credible to business partners. With the voluntary application and the effective billing method you get back the VAT paid on your investment.

Pension fund benefits

If you found a sole proprietorship you have the possibility in principle to pay out the pension fund. However, this means that self-employment is recognized as such by the SVA (or SUVA). In order to receive this confirmation, the sole proprietorship must be considered as your main job, your independence proven and shown that you carry the risk yourself. To prove this, you will need at least 3 invoices to several existing customers.

For further information regarding the requirements, advantages and challenges related to sole proprietorships in Switzerland; don’t hesitate to contact our Swiss company formation experts.


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