Are you thinking of setting up a business in Switzerland? Whether you’re a local citizen or foreign investor, Swiss business provides you with dynamic and competitive business culture.
Although, most European countries prohibit foreigners from setting up a business. But Swiss law allows foreign citizens legally to start a small business or form a company here. However, you need to meet certain requirements and a work permit.
Moreover, people prefer working here due to its stable political and economic business environment. In fact, the Swiss government also supports foreign entrepreneurs to incorporate their business idea in this country.
If you’re also looking for a business opportunity, let’s learn how to set up a company in Switzerland as a foreigner.
Benefits Of Starting A Business In Switzerland
As a foreigner getting a job or being self-employed in Switzerland can be beneficial for you in many ways. Here are some reasons you want to start a company here.
- Developed and continuous supply of workforce.
- Liberal labor market.
- Excellent infrastructure.
- Strong currency and economy.
- Easily available funding.
- Liberal tax system.
- Government support.
- Reliable administration.
How To Setup A Company In Switzerland As A Foreigner In 5 Steps?
Swiss business culture is attractive for any foreign investor. Thanks to the efficient finance and banking industry and especially, business-friendly registration process.
But before opening up a business, remember at least one Swiss partner must represent your company if you reside abroad. That person is the Resident Director in Switzerland who can be of any nationality but should be a Swiss resident.
Now let’s follow the easy five steps to set up a company as a foreigner in Switzerland.
1. Research the market
The first step is to research the market if it can help your business to grow. Find out about the major competitors, potential customers, which products/services you’ll offer, and the required skills.
Additionally, look for a company name and check if it’s already registered in Switzerland Commercial Registry. Also, don’t forget to acknowledge the business idea accordingly to market and resources.
2. Register company name
Once your business idea is convincing, you now need to register the company name. However, make sure you follow the Swiss company name registration law properly.
The registration procedure needs all your details like insurance, banking, plan of work etc. Then only the commercial registry will approve the name.
3. Select business structure
Before registering the company name in Switzerland, have you considered the business structure type? Along with a feasible business idea, you need a business structure to work with.
Foreigners planning to start a Swiss company have six different business entities in Switzerland.
- Sole Proprietorship: The company is owned by a single owner and doesn’t share any profit or loss, suitable for small businesses, freelancers, etc. There is unlimited liability, but if annual sales cross CHF 100,000, registration with the Chamber of Commerce is compulsory.
- Limited Liability Company: A Switzerland LLC requires a minimum paid-up capital of CHF 20,000 and one Swiss Resident Director is essential while other directors can reside overseas.
The major duties of a company’s resident director include handling international clients, financial planning, account supervision, appointing other company managers, preparing annual financial reports and submitting to the Swiss tax authority every year. The corporate tax rate is between 12.5%-24%.
- Limited Partnership: It’s a common legal structure where a general partnership requires extending the finance. General partners have unlimited liabilities, whereas limited partners (investors/creditors) are liable to an agreed amount.
- Public Shareholding Company: The liability of each partner is limited to the share capital deposited by them. The minimum required capital is CHF 200,000 and the corporate tax rate can be 8%-24%.
- Branch Office: The foreign company’s branch isn’t separate from its head office and is legally liable for all losses incurred by its Swiss branch. However, it doesn’t need capital to register but must appoint a local representative for the business. The tax rate is 12.5%-24%.
- Representative Office: Though Switzerland laws don’t differentiate branch and representative office (RO), but RO isn’t allowed to perform any commercial activities. Consequently, you don’t have to pay tax. So, if you don’t need a productive operation, register the company as RO to only conduct market research or employ staff.
4. Business registration
Here’s the process for registering the company in Switzerland when you’ve all the necessary documents ready.
- Fill an application form to set up a company in Switzerland as a foreigner.
- Draft the Articles of Association in the presence of the notary public.
- Open an escrow account for the paid-up capital.
- File the Articles of Association with the Switzerland Company Register to become a legal entity.
- Pay a stamp tax.
- Publication in the official journal.
- VAT registration.
- Enter your company’s employees into a social insurance scheme at a cantonment and federal level.
5. Register for tax
Finally, you need to apply to the Federal Tax Administration to register the business for taxation. In addition, foreign companies must have a tax representative in Switzerland. The tax rate will be depending on your business entity and business activities.
The company owner either receives remuneration as an employee or dividends from the business. In order to avoid double taxation, the taxable dividend amount for the shareholder is reduced by 40% at the federal as well as cantonment tax level.
On A Final Note
Switzerland is the home of some biggest multinational companies. The main reason is the administrative expense to set up a company here as a foreigner is comparatively low. Additionally, Swiss law has given the legal right to international citizens to establish a business here.
Even if you wish to get a job in this country, search online. Moreover, it isn’t very difficult to apply for a Switzerland work visa and get approval. After clarifying everything from conducting a business plan to selecting a business structure and name, you can launch the company.
