Guide to setting up a business in Switzerland
Interesting source : Business location
1. Why set up in Switzerland?
Switzerland is a preferred choice for foreign companies thanks to:
- 📈 A stable, prosperous economy: recognized for its global competitiveness and economic dynamism.
- 🌍 A strategic geographical position: at the heart of Europe, offering rapid access to the main European markets.
- 📜 An attractive tax framework: moderate tax rates and double taxation agreements.
- 🤝 Efficient, transparent administration: ease of setting up a business and legal certainty.
- 🏅 An environment conducive to innovation: research, development and cutting-edge technology.
2. The different types of legal entity in Switzerland
Before setting up a business, it's essential to choose the right legal structure:
Sole proprietorship
- 💼 Run by a single person.
- No minimum capital required.
- Unlimited liability on personal assets.
Limited liability company (SARL)
- 👥 Minimum: 1 partner (physical or moral).
- Minimum capital: CHF 20,000.
- Liability limited to capital invested.
Public limited company (SA)
- 👥 Minimum: 1 shareholder.
- Minimum capital: CHF 100,000 (paid up to CHF 50,000 minimum).
- Liability limited to share capital.
- Ideal for large companies looking to raise capital.
Branch
- 📍 Establishment of a foreign company in Switzerland.
- No capital required.
- Same legal personality as the parent company.
3. Steps involved in setting up a company in Switzerland
Stage 1: Project preparation
- Draw up a complete business plan: objectives, target market, sales strategy.
- Choose the appropriate legal form.
Step 2: Company registration
- Register in the Commercial Register.
- Obtain a company identification number (IDE).
- Register with cantonal and federal tax authorities.
Step 3: Opening a business bank account
- Deposit share capital (for SARLs and SAs).
- Provide required documents: articles of association, proof of domicile, ID.
Step 4: Work permits and authorizations
- Apply for residence permits for foreign executives.
- Compliance with local regulations for specific activities.
4. Swiss corporate tax system
Corporate taxation
- 📊 Direct federal tax: 8.5% on net profit.
- 📊 Ca ntonal and communal taxes: vary by region (generally between 11% and 24%).
- 📊 O verall effective rate: around 12% to 21% depending on canton.
Value-added tax (VAT)
- Standard rate: 7.7%.
- Reduced rate: 2.5% (food, books, medicines).
Double taxation agreements
- Switzerland has signed agreements with numerous countries to avoid double taxation.
5. Recruitment and employment in Switzerland
Employment regulations
- Written employment contracts recommended (although they may be verbal).
- Compliance with collective bargaining agreements in certain sectors.
Work permits for foreigners
- EU/EFTA: easy access to the labor market.
- Non-EU: work permits required (limited quotas).
Social security
- Compulsory membership of AVS (old-age and survivors' insurance).
- Social insurance (accident, unemployment, sickness).
6. Available grants and subsidies
- 💰 Cantonal support: tax incentives, innovation grants.
- 🤝 S et-up assistance: free advice from economic development agencies.
- 📊 S upport programs for research and innovation (Innosuisse).
7. Set-up costs
| Type of expense | Approximate cost |
|---|---|
| LLC registration | cHF 1,000 to 3,000 |
| Company registration | cHF 2,000 to CHF 4,000 |
| Annual accounting | cHF 3,000 to CHF 10,000 |
| Cantonal taxes | Varies by canton |
| Office rent | cHF 2,000 to 10,000/month |
8. Worth noting
Switzerland offers a favorable and stable environment for foreign companies wishing to establish themselves in a highly competitive market. However, the success of your project depends on careful preparation, a judicious choice of legal structure and an appropriate financial strategy.
Are you thinking of setting up a business in Switzerland? Contact PrestaFlex for assistance!
An article by Munur Aslan, Director of PrestaFlex
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