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MAY 21, 2024

THE ULTIMATE GUIDE TO COMPANY FORMATION IN SWITZERLAND IN 2024

BUSINESS REGISTRATION IN SWITZERLAND 2024. WHAT YOU NEED TO KNOW ABOUT BEFORE SETTING UP A COMPANY IN SWITZERLAND AS A FOREIGNER.


Embarking on a business venture in Switzerland demands meticulous planning. To ensure every step is taken with precision and to maximize your business's potential for growth, here's a comprehensive guide outlining essential prerequisites.

MAY 21, 2024

WHY TO START A COMPANY SWITZERLAND?

STARTING A BUSINESS IN SWITZERLAND CAN BE ATTRACTIVE FOR SEVERAL REASONS:



  • Strong Economy: Switzerland has a stable and prosperous economy with low unemployment rates and a high standard of living. Its economy is known for its resilience and diversity, offering opportunities across various sectors.
  • Political stability: Switzerland is politically stable with a long-standing tradition of neutrality. This stability provides a conducive environment for business operations and investments.
  • Business-Friendly Environment: The Swiss government offers various incentives and support for entrepreneurs and businesses. The regulatory environment is generally favorable, with efficient bureaucracy and a transparent legal system
  • Access to Talent: Switzerland is home to a highly skilled and educated workforce. Its universities and research institutions produce top talent in various fields, making it easier for businesses to find qualified employees.
  • Global Connectivity: Switzerland's central location in Europe provides excellent access to major markets. Its well-developed infrastructure, including modern transportation and communication networks, facilitates international trade and business connections.
  • Tax Benefits: While Switzerland is known for its relatively high living costs, it also offers attractive tax benefits for businesses. Certain cantons (regions) offer preferential tax regimes for companies, making it a tax-efficient location for business operations.
  • Quality of Life: Switzerland is renowned for its high quality of life, scenic landscapes, and excellent healthcare and education systems. This makes it an attractive destination for entrepreneurs and employees looking for a favorable work-life balance.
  • Innovation Hub: Switzerland is a leading hub for innovation and research, particularly in fields like biotechnology, pharmaceuticals, finance, and engineering. The presence of multinational corporations, research institutions, and startup incubators fosters a culture of innovation and entrepreneurship.
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Overall, the combination of economic stability, political neutrality, business-friendly policies, access to talent, global connectivity, tax benefits, quality of life, and innovation makes Switzerland an appealing destination for starting company in Switzerland.

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WHY TO START A COMPANY SWITZERLAND?

In Switzerland, the eligibility requirements to open a company in Switzerland depend on the type of Swiss business entity you wish to establish and other factors such as residency status. Here's an overview:

  • Legal Status:You must have the legal right to establish a business in Switzerland. Swiss citizens, foreign nationals with Swiss residency permits, and non-residents may all be eligible to register a swiss company, but the requirements and procedures may differ.
  • Business Structure: Switzerland offers various business structures, including sole proprietorships, partnerships, Swiss limited liability companies (GmbH/Sàrl), and Swiss stock corporations (AG/SA). The eligibility criteria and requirements vary depending on the chosen structure. For example: GmbH and AG require a minimum share capital (20’000 CHF and 50’000 CHF respectfully) to be paid before the incorporation, and at least one Swiss resident board member must be appointed to form a company in Switzerland and maintain a legal entity in the Swiss Corporate Registry.
  • Residency and Swiss Work Permits: Non-Swiss residents who wish to establish a company in Switzerland may need to obtain the necessary residency permits or work permits, depending on their nationality and the type of business they intend to operate. The specific requirement is to have at least one Swiss resident board member to be appointed in the Swiss Commercial Register.
  • Business Purpose: You should have a clear business purpose or activity that complies with Swiss laws and regulations. Certain business activities may require special permits or business licence in Switzerland.
  • Capital Requirements: Depending on the business structure chosen, there may be minimum capital requirements. For example, Swiss GmbHs (Sarl) requires a minimum share capital of CHF 20,000, whereas AG (SA) requires a minimum share capital of CHF 100,000 with at least CHF 50’000 to be deposited before the registration of a Swiss company.
  • Compliance: You must comply with Swiss legal and regulatory requirements for business registration, taxation, accounting, and other relevant aspects. This includes registering your company with the Swiss Commercial Registry, obtaining a business license if required, and fulfilling tax obligations.
  • Financial Resources: You should have adequate financial resources to cover startup costs, initial expenses, and ongoing operational expenses to maintain a Swiss company. This may include personal funds, investments, loans, or other sources of financing.

Before starting a business in Switzerland, it's essential to thoroughly research and understand the legal, financial, and regulatory requirements specific to your situation and business plans. Consulting with experts and relevant authorities can help you navigate the process more effectively.

MOST COMMON LEGAL FORMS FOR COMPANIES IN SWITZERLAND:
GMBH VS AG / SARL VS SA

This table offers a simplified overview of the main distinctions between legal forms companies in Switzerland: AG and GmbH (Sarl and SA) Swiss structures, aiding entrepreneurs in making informed decisions based on their specific needs and aspirations.

Features AG/SA (Joint-Stock Company) GmbH/Sarl (Limited Liability Company)
Legal Structure Public limited company Limited liability company
Name Requirements Any name not already registered, must specify legal form Any name not already registered, must specify legal form
Minimum Capital CHF 100,000. CHF 50,000 minimum to be deposited prior to the registration CHF 20,000 to be deposited prior to the registration.
Anonymity of Shareholders Not disclosed in the Swiss commercial register Disclosed in the Swiss company register
Governing Bodies General Meeting of Shareholders and Board of Directors Company Meeting and Managing Directors
Directors At least one member domiciled in Switzerland At least one member domiciled in Switzerland
Liability for Company Debts The company bears exclusive liability The company bears exclusive liability
Taxation Corporate tax rates apply Corporate tax rates apply
Shares Minimum value of CHF 0.01 per share, 20% paid in (minimum CHF 50,000 total) No shares, minimum value of each shareholder's portion is CHF 100
Transfer of Shares Permissible without other shareholders' consent unless otherwise stipulated Requires consent in the Company Meeting unless otherwise specified in Articles of Association
Audit Requirements Regular audit required upon reaching certain thresholds; limited audit for companies with more than 10 employees Regular audit required upon reaching certain thresholds; limited audit for companies with more than 10 employees
Advantages Limited liability, easy share transfer Limited liability, low minimum capital requirements
Market Perception Often perceived as more prestigious Perceived as suitable for small to medium-sized businesses

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HOW TO OPEN A COMPANY IN SWITZERLAND? THE ULTIMATE GUIDE TO COMPANY REGISTRATION IN SWITZERLAND IN 2024.

  • 1. Understand the Types of Companies in Switzerland: Ss foreigner you can form various types of companies. Most common legal forms are GmbH/Sàrl (Limited Liability Company and AG/SA (Public Limited Company, Corporation). Each has its own legal requirements and tax implications.
  • 2. Choose Your Business Structure: Decide which business structure suits your needs best. Consider factors like liability, capital requirements, and administrative burdens. GmbH and AG are popular choices due to limited liability.
  • 3. Select a Company Name: Your company name must be unique and not already registered. It should also not violate any trademarks. Verify its availability through the Swiss Commercial Registry https://www.zefix.ch/en/search/entity/welcome.
  • 4. Appoint Directors and Shareholders: at least one Director must be a Swiss resident. There is no restriction on the shareholder’s nationality and/or residency. It could be a private individual or legal entity.
  • 5. Prepare Articles of Association: Hire the Notary to draft articles outlining company details like purpose, share capital, shareholder rights, and operational procedures.
  • 6. Deposit Share Capital: AGs require a minimum share capital of CHF 100,000, with at least 50% paid prior to the incorporation. GmbHs need at least CHF 20,000, fully paid. The funds should be deposited into a consignment account in the Swiss bank.
  • 7. Appoint a Notary and Register Your Company in Swiss Business Registry: Submit incorporation documents to the Swiss Commercial Registry. This includes notarized articles, proof of share capital deposit, and director/shareholder information, etc.
  • 8. Obtain Necessary Permits and Licenses: Depending on your business activities, you might need specific permits or Swiss business licenses from specific authorities. This includes permits for specific industries or activities like finance, healthcare, or Employment of Record (EOR).
  • 9. Register for Value Added Tax Switzerland (Swiss VAT): If your annual turnover exceeds CHF 100,000, you must register for Value Added Tax (VAT) with the Swiss Federal Tax Administration (FTA).
  • 10. Open Swiss bank account: To conduct business in Switzerland, you'll need a bank account. Choose a reputable bank or financial institution (fintech) that suits your business needs. The corporate bank account can be opened in the Swiss bank or the bank of any other jurisdiction.
  • 11. Comply with Employment Regulations: If you plan to hire employees, ensure compliance with Swiss employment laws regarding contracts, working hours, wages, and social security contributions.
  • 12. Maintain Ongoing Compliance: Fulfil annual reporting requirements, including filing financial statements and paying taxes. Stay updated on changes in Swiss company law and adjust your operations accordingly. The Swiss company has a legal obligation to maintain the Shareholders Register as well as a list of the Ultimate Beneficial Owner up to date.
  • 13. Consider Tax Implications: Switzerland offers favorable tax rates, but they vary depending on the canton and company type. Consult with tax advisors to optimize your tax structure and comply with regulations.
  • 14. Protect Intellectual Property: Safeguard your intellectual property rights by registering trademarks, patents, and copyrights with the Swiss Federal Institute of Intellectual Property (IPI).
  • 15. Seek Professional Assistance for Swiss company formation and administration services: Consider hiring a Swiss attorney, accountant, or business advisor to guide you through the intricacies of company formation and compliance in Switzerland.
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By following these steps and seeking expert guidance, you can navigate the process of company formation in Switzerland efficiently and set your business up for success in the Swiss market.

HOW LONG WILL TAKE TO FORM A COMPANY IN SWITZERLAND? TIMEFRAMES OF THE COMPANY CREATION IN SWITZERLAND

The timeline for opening a company in Switzerland can vary depending on several factors, including the type of legal structure chosen and the efficiency of administrative processes. However, a general estimate is 2-3 WEEKS that involves:

  • Preparation: This involves drafting necessary documents like Articles of Association, which can take a few days depending on the complexity and legal advice needed.
  • Capital Deposit Account Opening in a Swiss bank: Opening a bank account for the company in formation can take a few days to a week, depending on the bank's procedures and requirements.
  • Notarization: if a shareholder is a legal entity, the legalized corporate registry extract with Apostille will be required, which might add a few days to the process.
  • Registration: Once documents are prepared, registration with the Swiss Commercial Registry Office can take a few days to a few weeks, depending on the workload and efficiency of the registry.

Overall, the process of business registration in Switzerland can typically take few weeks to complete all necessary steps and have the company fully operational. However, factors such as complexity of the company structure, specific requirements, and administrative workload can influence the timeline. It's advisable to work closely with legal and business advisors familiar with Swiss company formation processes to streamline the process as much as possible.

THINGS TO CONSIDER AFTER THE CREATION OF A COMPANY IN SWITZERLAND.
POST INCORPORATION COMPLIANCE.

Upon establishing your company in Switzerland, you are required to fulfil administrative obligations to safeguard your employees. This includes registering with OASI (AHV/AVS) and a pension fund (BVG/LPP). Additionally, acquiring accident insurance is necessary as all employed individuals in Switzerland must be covered against workplace accidents and occupational illnesses. For comprehensive coverage, it's advisable to also contemplate obtaining loss of earnings insurance.

Furthermore, Swiss-based companies must register for VAT. It's important to note that VAT registration becomes mandatory only when the annual turnover reaches CHF 100,000 or more.

Creating and maintaining an up-to-date Shareholder Register and Ultimate Beneficial Owner (UBO) list is mandatory.

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