The basic idea in tax optimization of a business is to move taxable income into the most advantageous tax jurisdiction and to move to costs to the most disadvantageous one.
Switzerland is often considered one of the most suitable locations for incorporating an offshore company along with many other jurisdictions. However, it is a reputable and prestigious jurisdiction with a relatively low tax rate and especially a well-known reputation for the quality and security of its services and is located in the center of Europe.
Although not part of the European Union, it has concluded numerous treaties with the Union and a wide range of international treaties to avoid double taxation. That's why more and more international companies and also entrepreneurs choose Switzerland as a jurisdiction to set up a company.
Fiscal residency of the company
If you want to set up your own company in a favorable European tax regime, like Switzerland, you have to be very careful about some aspects. For the company in question to benefit from double taxation treaties, it must be a tax resident in that country.
This means that the registered office will be there, and the management decisions (issue-receipt invoices, signing contracts) will also be taken in Switzerland.
If tax inspectors find that the management is actually done in another country, then the taxes will be recalculated and penalties will be imposed because the tax residence will be considered as being in a foreign country.
Firms specializing in the establishment of Swiss offshore companies offer as directors and associates citizens of Switzerland as well as the secretariat of the company concerned, all of which are required by the Swiss legislation.
Under what conditions remain the shareholders anonymous?
Foreign citizens who are the real owners of the business do not appear in the company's acts if this service is requested. The real shareholder is not disclosed by the offshore director / associate, unless there are suspicions such as drug trafficking, arms, prostitution, etc.
The firm that performs the service - the only one that appears in the company's official documents - signs with the shareholder a statement of confidence in which it undertakes to perform only the operations ordered by the real shareholder. The contract also includes the email address from which the actual shareholder’s instructions are received.
Restrictions on the field of activity of Swiss offshore companies
A Swiss offshore company may not undertake banking, insurance, reinsurance, fund management, collective investment or any other activity that might suggest an association with the banking or financial industries.
Types of shares
Swiss offshore companies can issue several types of shares, being allowed as: bearer shares, registered shares, shares with or without voting rights and shares with or without value.
Taxation in Switzerland
The standard VAT rate for the profit made by a company incorporated in Switzerland is 8%, which may vary depending on cantonal taxation. There are also reduced VAT rates of 3.8% for hotels or 2.5% for basic food products.
Annual financial statements and other registers
Company accounting documents must be kept and filed with the competent authorities. There are also audit requirements for certain companies
Business operations with residents or Swiss companies
There are no activities allowed for trade on Swiss territory and there are not allowed, without a license, activities related to banking and insurance.
Types of Swiss offshore companies
Aktiengesellschaft (AG). This structure offers a combination of the advantages of a corporate structure with limited obligations and the flexibility of a partnership with tax benefits for all partners. Management is provided by members or owners, the management being different from the board of directors.
Private limited liability company (GmbH). This type of company offers its shareholders limited liability. Their liability is directly proportional to the contribution to the initial capital, thus protecting private assets in the company's insolvency.
Trust. An offshore trust is set up when assets are transferred to an administrator. The administrator becomes the legal owner and is responsible for managing the assets and distributing them to the trust's beneficiaries (which may include the person or company that transferred the assets to the administrator) in accordance with the terms of Deed of Trust.
Foundation. The structure of the foundation is more closely linked to that of a trust, but it also offers advantages similar to a company. The foundation is a hybrid between a trust and a company and combines the most favorable aspects of each of the two entities. It can be used as a more efficient and versatile tool for controlling and exercising the rights of shareholders, real estate ownership, family inheritance and real estate planning.
Consultancy provided by professionals in the field of Swiss offshore companies is the key to success! Tax optimization represents the use of legal methods at any time in the life of a business to pay as little tax as possible and reduce the tax burden. Furthermore, specialists will provide you with optimized and personalized solutions for your business to be fiscally competitive.