Set Up a Company in Switzerland

Switzerland has recently emerged as a hotspot for tech and blockchain startups. It's gaining recognition for producing unicorn businesses valued at $1 billion. This is because of the country’s tax-friendly policies and stable business and political landscape. Plus, the government has introduced economic measures designed to encourage foreign investors to open companies or subsidiaries in the country. All of these factors make Switzerland one of the best destinations for incorporating a company. 

If you want to set up a company in Switzerland, this article will explain everything you need to know to get started. Read on.

Setting Up 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.    

Sole Proprietorship 

The sole proprietorship is opened by a single individual who carries out his economic activity and is personally responsible for the business debts. However, your business name must include your surname. Even if it is a rare form of a legal entity, everyone can initiate and run independently their own business commercially, without fulfilling formalities related to incorporation, presentation in the trade authorities, social capital, and accounting. Setting up a sole proprietorship is simple and doesn't need much capital. Company formation is optional but becomes compulsory if annual revenues outweigh 100.000 CHF.

If you're a non-Swiss citizen, you must be an EU citizen and a local resident to run a sole proprietorship. Alternatively, you can appoint a Swiss resident with sole signature authority to avoid this residency requirement.

Limited Liability Company

The Swiss limited liability company  (Sàrl/GmbH) 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 acceptance in the Swiss Trade authorities, which is mandatory. The company's representatives must make business decisions at an annual general meeting. 

The Swiss LLC is common, offering owners protection and aiding fundraising. Yet forming one requires at least CHF 20,000 capital and involves more complex administrative steps than other business types, such as sole proprietorships or partnerships. 

Our team of Swiss consultants can help you with detailed information on setting up a limited liability company. Company taxation is made on profit and capital; for associates, it is done individually, on social shares (wealth) and distributed benefits (as income).

Stock Company

The stock company  (SA/AG) is a form of organization that completely separates the company's assets 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 must be notarized together with the constitutive act. The entry in the Trade Authorities is mandatory. The minimum share capital that is set by law is CHF 100,000. 

Under Swiss law, the board of directors must be mostly composed 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.

A key perk of SA/AG in Switzerland is shareholder anonymity in the commercial authorities. This secrecy can benefit those who prefer privacy or companies avoiding revealing ownership to competitors.

The directors' names are public, and the company holds shareholder details. However, confidentiality is not absolute; courts may demand disclosure in legal matters like investigations or trials.

Among the legal differences between the limited liability company and the stock company is that in the case of the first business structure, the shares of a limited liability company cannot be freely traded on the market. In contrast, the stocks of the second one can be transferred to the public through the stock market.

Two or more partners can form a general partnership or limited partnership in Switzerland. The main advantage of these legal entities is that no minimum capital for official set up is required. At the same time, the partners must sign an agreement to incorporate a partnership. 

Limited partnerships are formed by at least one general partner with full rights and at least one silent partner with 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.

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. However, when obtaining a permit in Switzerland, the entrepreneur must be able to provide evidence of gaining activity planning.

Establishing a company in Switzerland starts with opening a bank account and depositing the paid-up capital, after which a receipt will be received to set up the company. After this first step, the following requirements must be completed: signing the company’s articles of association to a notary public in Switzerland, authenticating the company's incorporation documents, and authenticating the association memorandum. You must also notarize company representatives' and corporate signatures on the application form.

In summary, to form a company in Switzerland:
 

• Choose a business structure: Decide on the type of company that aligns with your business objectives.
• Apply for your business name: Select and reserve a unique name for your company.
• Open a corporate bank account: Deposit the minimum required capital for your chosen business structure.
• Prepare incorporation documents: Draft articles of association and deed of incorporation, then sign them with a notary public.
• Complete necessary forms: Fill out the Stampa Declaration Form and Lex Friedrich Declaration Form.
• Present your business documents: Submit all required documents to the Swiss Trade Authorities.
   

All these documents must be submitted to the local commercial authorities to obtain legal status. After the Swiss Company authorities issues the incorporation certificate, the company must also apply for VAT and tax purposes. The last step is to apply your employees for with the social insurance system at federal and cantonal authorities.

Remember, while the SA/AG can help maintain shareholder confidentiality in the commercial authorities, other factors that may impact this confidentiality must also be considered.

Be sure to properly fulfill these requirements by appealing to specialized consultants in opening a legal entity in Switzerland.

Swiss Trade Register

It provides basic information about all Swiss companies, including addresses, shareholders, and others. It is a commercial authority in which each company is signed up in the district where it has its official headquarters. Moreover, this institution lets investors check whether their favorite business name is already taken.

To become a recognized legal entity in Switzerland, every company must apply with the Commercial authorities, the Swiss Federal Commercial Registry Office (FCRO). This involves applying along with a comprehensive set of legal documents, which provide detailed information about the business and its planned activities. This process can be complex and time-consuming. Seeking professional assistance is advisable to ensure a smooth formation process.

Formalities for starting a business in Switzerland

A Swiss company can be incorporated in about three weeks if the documents are presented properly and the minimum share capital is provided.

Additional legal documents and information needed for incorporating a Swiss company are straightforward:

• Notarized Company Representatives And Signatures: Ensure all signatures of managing board members (company secretary, directors, and shareholders/founders) are notarized.
  
   
• Declaration Forms: Stamp a Declaration Form and a Lex Friedrich Declaration Form as part of the process.
  
   
• Business Address: Furnish details about the firm's official address where official correspondence will be sent.
  
   
• Business Details: Provide information about social capital, business activities, and primary objectives to complete the incorporation process.

Companies should also keep financial records and 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 characterized by three distinct levels: federal, cantonal, and communal.

To open a company in Switzerland easily and quickly, it is advisable to seek help from a specialized firm that specializes in such procedures. Our company has an entire network of professionals with extensive experience and solid knowledge of Swiss and European legislation.

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 and all the necessary facilities for opening a virtual office.