Switzerland remains a particularly interesting location for the creation and establishment of companies. In particular, many foreign companies from around the world have decided to set up a public limited company or a company branch in Switzerland.
If you have the intention to set up and grow your business in Switzerland, these tips will help you make the right decisions for your project.
1. The choice of the canton where to incorporate is essential
More than the canton, it is the environment that is important. If you are for example a company specializing in micro-plastics working for the pharmaceutical industry or Medtech (medical technologies), it might be wise to establish your company in a canton where there are already several companies of this type, which naturally will favor trade. The nature of your business can also play an important role in this choice: if, for example, you need to set up a plant or production units, some cantons will be more suitable than others. For example, the canton of Bern is home to the largest cluster of companies active in the medical field (around 400 companies).
2. Study the market and the environment of your activity in Switzerland
You are a professional and know your business perfectly but in Switzerland, it is likely, if not certain, that your business doesn’t work in the same way: there are most likely regulations and legislation specific to your business. The actors are not the same, the leading companies in Switzerland may be different, and the activity may be part of what is called a protected activity and so on. Basically, it is important to set up a precise market study, which will allow you to have a better knowledge of this new competitive environment, the potential of the market, and the legal constraints.
3. Think about relationships with schools and R & D
Research in Switzerland is often well integrated into an industrial activity. If your company develops value-added services or products in an industrial field, it may be interesting, as a company founder, to get closer to a school activating in this field, and to entrust them with a program of research. This will not only be appreciated by the local authorities, but also by any institutions or entities that will finance your activity.
4. Don’t rely on state aid
There is virtually no financial support for business creation from the Swiss authorities. However, the help you obtain from local authorities is more material and practical and will be offered in the form of tax deductions and other incentives. In concrete terms, this aid will consist of granting commercial premises or land if you have a factory to build, and enabling relationships with partners (suppliers or distributors for example) in the context of the establishment of an activity.
5. Get your finances in order
The creation of a company, in Switzerland or elsewhere, requires most of the time to have funds. These funds can be provided in part by the founders or by the foreign company that wants to set up in Switzerland. Swiss banks are not particularly open to financing foreign companies.
6. Pay attention to tax optimization
For many companies, incorporating in Switzerland means the formation of a company with a share capital. Depending on the legal form, the Swiss entity will have to raise part of its profits to a parent company located outside Switzerland (or vice versa, the entity in Switzerland, in the form of a holding company can raise the profits of these entities abroad). In any case, it is important to consider which type of company is more suitable for taxation purposes.
7. Don’t set your expectations too high
In many industries, the level of service is highly developed, and the arrival of a new player rarely radically changes the game. In short, you shouldn't expect to make a very big impact on a certain business sector, except in the case you have developed a very specific and unique product or technology.
8. Take culture clashes into account
The big trap for many foreign entrepreneurs starting their businesses in Switzerland is the temptation to believe that the mentalities are the same. However, mentalities are specific, both in business and in everyday life. For example, in most Swiss companies, little importance will be given to diplomas, and the focus is placed more on what you can do: your experiences and your skills. The biggest danger and the biggest set-up failures in Switzerland come from cultural inadequacy and a bad estimate of how things work locally.
9. Pay attention to the people with whom you associate
There is something specific to the Swiss culture: the importance of belonging to the group. In Switzerland, if people from the industry don’t know you (which is the case of the majority of foreign companies and entrepreneurs), you will be judged based on the group you belong to, the people who recommend you. The importance of the group, in the sense of community, is what can make the difference between a successful commercial takeoff or a real flop.
10. Carefully choose your management team
Management teams are a key element of your business in Switzerland. In addition to the fact that these managers must have real managerial skills, they must also have a thorough understanding of the country's codes and operations. A manager who dictates to their team what they must do without asking them their opinion is particularly pruned to isolation and losing all credibility.
Now that you know what you can do to grow your business in Switzerland, get in touch with our company formation experts to find out which steps you must take to incorporate in Switzerland.
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