Switzerland is a commendable destination that provides a highly conducive operating environment for businesses. The country was ranked 81 among 190 countries in the Doing Business 2020 report regarding the ease of starting a business.

In addition, in 2020, the Swiss commercial authorities recorded a total of 46,842 newly created companies, an increase of 5,3% compared to the previous year. These statistics do not only prove that the number of incorporated companies are growing strong in this region, but also that the country is a preferred destination for investors. This article aims to inform you on how to go about the process for starting a company in Switzerland.

Why start a company in Switzerland?

The beauty of embarking on a business venture in Switzerland is that the Swiss Constitution allows both citizens and non-citizens to form a company there; however, at least one of the directors must be a Swiss citizen or a legal resident.

Also besides avoiding unnecessary bureaucracy, setting up a company in Switzerland makes good economic sense if you aim to obtain the following benefits:.

  • Ease of trading with European and American states.
  • A liberal labor market.
  • Favorable tax systems.
  • Impeccable financial systems.
  • Fair legislation.
  • Stable economic climate.

Types of Swiss legal entities

Now that you understand the perks of starting your business in Switzerland, knowing the different company forms is the next critical step. Companies are set up differently depending on the number of partners, the company's nature, and the minimum share capital. As such, your options include:

  • Limited liability companies These companies require a minimum number of two shareholders and a minimum capital requirement of CHF 20000. Partners may be non-Swiss citizens, but at least one managing officer must have Swiss citizenship or permanent residence.
  • Stock companies At least three individuals establish the Stock company with the company’s shares being easily transferable to the public through the stock market. A minimum capital requirement of CHF 100000 is necessary for forming this company.
  • Sole proprietorships Sole traders have the advantage of easy set-up and accounting procedures. In addition, it is formed by an individual who carries full responsibilities for the entity’s actions without any limitation.
  • Limited partnerships Limited partnerships are formed by a general partner with total liability without limitation and a limited partner with liability only up to the contribution initially brought to the entity.
  • General partnerships A minimum of two members can set this kind of partnership up. General partnerships are characterized by unlimited liability extended to the partners' personal assets.

Stages of the Company formation process

Once you know the kind of company you need for your business, you are good to go and ready for the formation process. Successfully creating a company takes approximately three weeks and here is what you are expected to do in the process:

  • Choose the right company type for your business needs
  • Select a distinctive company name that does not sound similar to an existing company name.
  • Open a bank account in which you deposit your minimum share capital.
  • Draft the articles of association and authenticate documents in the presence of a notary public.
  • Hand in documents to trade authorities by mail or through the website.
  • Pay stamp tax at the post office or bank
  • VAT Setup - After incorporating the company with the Commercial authorities, the company should apply with the Federal Tax Administration.
  • Sign up employees in the social insurance system - The company is responsible for signing up its employees for different types of insurance and pension.

Cost of starting a company

The cost of starting a company in Switzerland varies depending on the type of company formed and the Swiss canton you choose to incorporate in. However, the basic costs incurred when setting up a company include:

  • The government fee which varies depending on the type of company.
  • The minimum share capital required at incorporation as previously mentioned for the different companies.
  • Bank fees which can amount to approximately CHF 200 to CHF 2,000

Conclusion

Engaging a specialist team of professionals helps to ease the bureaucratic and legal hurdles associated with the formation process. At SIGTAX, we have a proven track record of making the process of starting a Swiss company as simple, quick and easy as possible for our clients. Our services also go beyond business formation and extend to accounting and taxation services. Get in touch with our team today to get information and request a quote.