If you would like to set up a small business in Switzerland but aren’t sure what kind or what is required, then read on.
Before you start formalising your company, it makes good sense to do a little market research and put together a business plan. There are a lot of templates available online to help you with this. Criteria to consider are: the necessary capital and costs involved, number of founders and the risks and liabilities.
The following describes the most popular types of companies:
An Einzelfirma (sole proprietor company) is the most straight forward and inexpensive form of corporation to start. This involves no initial investment and the only requirements are that your family name be in the business name and that you inform the AHV (State Pension Fund) and the local tax office of the creation of your company; in some cases it may be advisable to enter your company in the commercial registry but it is not necessary. You are personally held responsible for any debts and liabilities incurred. Any profit is taken into account in your personal taxes. This company type is recommended for most small businesses with sporadic sales and little risks involved.
A GmbH (Limited Liability Company) is well suited for companies with multiple founders, to separate your personal risks and liabilities from your company ones or to gain more credibility towards your customers and suppliers. You need to provide a minimum capital of CHF 20,000.-, part of which can be in investments into goods used for running your business. You need to establish your company with the help of a notary and have it entered into the commercial registry, creating additional start-up costs. As owner and employee of your GmbH you will be doubly taxed, first on the profit you make and secondly on your salary, which is not the case for an Einzelfirma. The canton of Luzern offers the lowest taxes on profits, making it the best place in Switzerland to incorporate your GmbH (or AG) from that point of view.
An AG (public limited company) issues shares that can be transferred easier than with a GmbH and again heightens your credibility as a business. The minimum equity required to establish an AG is CHF 100,000.- of which a minimum of CHF 50,000.- needs to be in cash or in investments into goods for running your business. Costs to run an AG are generally higher than with a GmbH.
Other points you need to look into are:
- VAT: Above a revenue of more than CHF 100,000.- you need to register with the VAT authorities, then charge and refund VAT
- Registering with the first pillar pension fund (AHV), second (Pensionskasse) and third pillar
- Insurances
- Salary administration (social security payments etc.) and accounting
Starting a company as a foreigner in Switzerland: if you come from an EU/UFTA country there are no requirements and people who have C Permits or whose spouses have C permits can also start a company without any further complication. If that is not your case you will have to make an application for a permit, justifying the positive impact of your company on the Swiss market and in some cases show five letters of intent from companies prepared to do business with you.
