Switzerland is often considered one of the suitable locations for incorporating a company. It is a prestigious country with a relatively low tax rate and, above all, has a well-known reputation for the quality and security of its services. Due to the double taxation treaties that Switzerland has concluded with the majority of industrialized countries, there is no risk that a company will be taxed by both countries. Taking all the advantages into account, setting up a Swiss company or opening a Swiss business branch on the European market is a convenient option for entrepreneurs, start-ups or small and medium-sized companies. The Swiss government continues to support a very attractive business environment through economic measures designed to encourage foreign investors to open companies or subsidiaries in Switzerland.
As a general rule, the freedom of trade and industrial activities, guaranteed by the Swiss Constitution, allows any person, including non-residents, to operate a business in Switzerland, to set up a company or to hold interests in an existing one. The incorporation process is completed only with the registration in the district where the headquarter is set up.
The registration of different types of companies in Switzerland
The main types of legal entities among which foreign and local investors can choose are sole proprietorships, limited liability companies, stock companies, limited partnerships, and general partnerships.
The sole proprietorship is opened by a single individual who carries out his economic activity. Even if it is a rare form of a legal entity, everyone can initiate and run independently their own business on a commercial basis, without fulfilling formalities related to incorporation, registration in the trade register, social capital, accounting. Company registration is optional but becomes compulsory if annual revenues outweigh 100.000 CHF.
The limited liability company is formed by association, based on the statute, of two or more persons or companies (Swiss or foreign). The company is established and acquires legal personality upon registration in the Trade Register, which is mandatory. Business decisions must be made by the company's representatives at an annual general meeting. Our team of Swiss consultants can help you with detailed information on the registration of a limited liability company. Company taxation is made on profit and capital, and for associates, it is done individually, on social shares (wealth) and distributed benefits (as income).
The stock company is the form of organization that completely separates the assets of the company from the private assets of the shareholders, which makes a significant difference from other types of companies. The minimum number of associates, natural or legal persons, is 3, of which at least one must be a Swiss resident in Switzerland. All company rules are defined in its statute, which, together with the constitutive act, must be notarized. The entry in the Trade Register is mandatory. The minimum share capital that is set by law is CHF 100,000. Also under Swiss law, the board of directors must be composed mostly of Swiss citizens residing in Switzerland. A stock company is the most common type of business in Switzerland. In most cases, foreign companies operating here opt for this form of organization for their branches.
Among legal differences between the limited liability company and the stock company, is the fact that in the case of the first business structure, the shares of a limited liability company cannot be freely traded on the market, while the stocks of the second one can be transferable to the public through the stock market.
The general partnership or limited partnership in Switzerland can be formed by two or more partners. The main advantage of these legal entities is that no minimum capital for registration is required. In the same time, to incorporate a partnership, an agreement signed by the partners is required. Limited partnerships are formed by at least one general partner with full rights and at least one silent partner who has rights and responsibilities within the limit of the contribution to the entity. Instead, a general partnership consists of members responsible for the entity's actions in the same manner and with the same rights to decide strategies.
The steps for company incorporation in Switzerland
Under the agreement on the free movement of persons, an entrepreneur can also work in Switzerland without a residence permit (permit C). A residence permit (permit B) with a validity of 5 years is enough. When obtaining a permit in Switzerland, the entrepreneur must, however, be able to provide evidence of gaining activity planning.
The establishment of a company in Switzerland starts with the opening of a bank account and depositing the paid-up capital, after which a receipt will be received to register the company. The following requirements to be completed after this first step are signing the company’s articles of association to a notary public in Switzerland, the authentication of the company's incorporation documents and the authentication of the association memorandum. You also need to notarize company representatives and corporate signatures on the application form.
All these documents must be submitted to the local commercial register to obtain legal status. After the incorporation certificate is issued by the Swiss Company Register, the company must also register for VAT and tax purposes. The last step you need to do is register your employees with the social insurance system, at federal and cantonal authorities.
Be sure to properly fulfill these requirements by appealing to specialized consultants in opening a legal entity in Switzerland.
Swiss Trade Register
Provides basic information about all types of Swiss companies as well as addresses, shareholders and other people. It is a commercial register in which each company is registered in the district where it has its official headquarters. Moreover, through this institution, investors can check whether their favorite business name is already registered or not.
Formalities for starting a business in Switzerland
If the documents are presented properly and the minimum share capital is provided, a Swiss company can be incorporated in about three weeks.
Then, companies should keep financial records and must submit annual financial statements following the accounting procedures applicable in this country. Besides, some businesses need to obtain special licenses or permits depending on the type of activity they carry out. The tax system in Switzerland is very complex and is characterized by the existence of three distinct levels: federal, cantonal and communal.
To open a company in Switzerland in an easy and fast way, it is advisable to ask for help from a specialized firm in such procedures. Our company has an entire network of professionals with extensive experience and solid knowledge of Swiss and European legislation.
Also, you can also benefit from other services such as tax planning, accounting, or corporate administration services for companies established in Switzerland. If necessary, our clients are also offered the possibility of renting office spaces in a Swiss business center, as well as all the necessary facilities for opening a virtual office.