Knowledge

How to start a business in Switzerland

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Switzerland is offering a very attractive business environment, including for foreign investors. The Swiss laws allow anyone, including foreigners to start a business in Switzerland, to form a company or to have a financial interest in one.

What you should know before you start your own business in Switzerland

However, there are certain conditions that are required. Only persons that hold a valid C permit, the spouse of a C permit holder or the spouse of a Swiss citizen have the legal right to start their own businesses in the country.

Those that don’t have a C permit must submit an application to the cantonal authorities where they want to establish their business. Apart from those requirements, the company formed by foreigners must have a lasting positive effect or influence on the Swiss labor market.

The new company or a self – employed person must contribute to the industry – specific diversification of the regional company, create or preserve jobs for local residents, make considerable investments and generate income for the Swiss economy.

Considering all these factors, entrepreneurs must have a very clear and feasible business idea before they consider investing in Switzerland. A solid business plan is the foundation for a successful evaluation process. Existing organizational relationships with other companies is another advantage for any start – up. The application must also contain the foundation charter and/or the Commercial Register entry.

If the application is accepted by the Swiss cantonal authorities, the entrepreneur is granted a short – term residence permit for third – country nationals (L permit) or even a residence permit (B permit). Both permits are subject to the annual quotas set annually by the Federal Council.

The B residence permit has a period of validity limited to one year. It can be renewed, unless there are reasons against a renewal. The short – term residence permit is valid for stay up to one year. In exceptional cases, this permit can be extended up to 12 months.

How to form a company in Switzerland

It is possible to form the following types of companies in Switzerland:

  • A company branch office;
  • A Limited Liability Company (GmbH);
  • A corporation (AG);
  • A joint venture;
  • A business partnership.

The procedure for establishing any of these types of companies generally involves these steps:

  • Creating the articles of association notarized by a Swiss notary;
  • Opening a bank account with a Swiss bank to deposit the paid – up share capital;
  • Submitting the articles of association with the local commercial register, to become a legal entity;
  • Paying a stamp tax of 1% of the share capital – the first million CHF is exempt;
  • Registering for VAT, if necessary;
  • Entering employees into the social insurance scheme on federal and cantonal level.

In the case of sole proprietorships, general partnerships or limited partnerships, the registration process is simplified, using an online portal.

Best business sectors to invest in Switzerland

The financial and banking sectors continue to be the most well – developed business sectors in Switzerland, but the travel an tourism sector is also worth investing in. Switzerland is known for many wonderful travel destinations, therefore it makes sense to invest in hotels, resorts or travel agencies.

Switzerland is also known for medical and security equipment, pharmaceuticals and the information and telecommunications industry. New investors should also consider other industries that have a great potential, such as nano – technology, high – tech equipment and software development.

Contrary to popular belief, Switzerland offers a lot business opportunities and the Swiss Government is supporting foreign investors by offering various incentives in the form of tax deductions or tax incentives.

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