Switzerland presents an attractive destination for global entrepreneurs and corporations looking to expand their operations in Europe. With a stable economy, strategic location, and business-friendly environment, the country attracts lots of foreign investments. However, enterprises need to follow a meticulous process during company formation in Switzerland. To ensure compliance, it’s imperative to understand the process of incorporating your business in the country.
In 2023, the merchandise exports in Switzerland were valued at $420 billion, a 5.01% increase from 2022. Besides, the EU is the primary trading partner of Switzerland, accounting for 67% of its imports and 50% of its exports. In this comprehensive guide, we have explained how to register a company in Switzerland. This will help new businesses comply with the stringent legalities and ensure a smooth incorporation process in the country.
- Why to register a company in Switzerland?
- Who Can Register A Company In Switzerland?
- Different Business Structures for Company Formation in Switzerland
- Steps Involved In Company Formation in Switzerland
- Things to do after company formation in Switzerland
- How much does it cost to form a company in Switzerland?
- Time required to register a company in Switzerland
- Seek Expert Support for Ongoing Compliance and Management Requirements
Why to register a company in Switzerland?
Global enterprises are looking forward to setting up a company in Switzerland, considering the multiplicity of benefits of operating within its borders.
- The strong GDP and economic stability in the country make it an attractive and safe business avenue for international brands
- Since Switzerland is located centrally in Europe, businesses operating here enjoy a strategic position as it opens up expansive commercial opportunities across the continent
- Moreover, international businesses take advantage of the favourable tax system in Switzerland. It allows certain companies to enjoy exceptions for up to 10 years. This significantly slashes the initial operational costs
- The country fosters innovation and technological development, offering robust IT infrastructure to businesses
- In Switzerland, overall labour costs remain comparatively low due to minimal indirect costs and social insurance expenses
Who Can Register A Company In Switzerland?
Different Business Structures for Company Formation in Switzerland
1. Swiss Limited Liability Company (GmbH/Sàrl)
Advantages:
- No personal liability for debts, as the liability is limited to the share capital and assets of the company
- The initial investment is low, just a share capital of CHF 20,000
- Unlike a sole proprietorship, a GmbH/Sàrl allows businesses to choose their business name freely
Conditions:
- At least one director must reside in Switzerland
- The company name must be distinguishable from other registered names and include GmbH or Sàrl
2. Swiss Limited Company (AG/SA)
Advantages:
- No personal liability since shareholders remain liable only for their share of the capital
- The identities of shareholders aren’t disclosed publicly
- Shares can be transferred freely without legal or statutory restrictions
Conditions:
- Higher minimal capital of CHF 100,000, with shares valued at least CHF 0.01
- At least one director must reside in Switzerland
- The name of the business must be unique and include AG or SA
3. Sole Proprietorship
Advantages:
- Registration with the Commercial Register is necessary only if the annual income exceeds CHF 100,000
- No minimal capital required
- Sole proprietorships are not subject to corporate taxes, unlike AG/SA and GmbH/Sàrl
Conditions:
- The business name must include the last name of the owner
- The owner needs to register with the OASI (AHV/AVS) and obtain a work permit
Steps Involved in Company Formation in Switzerland
1. Select the right business structure
2. Choose a company name
3. Draft the articles of association
The Articles of Association refer to legal documents outlining the purpose, structure, operational guidelines, and governance of a company. Include relevant details in the document, including:
- The name of the company
- Share capital
- Registered office address
- Directorship roles
- Rights and obligations of shareholders
- Decision-making processes
4. Open a Swiss Bank Account
Opening a bank account is one of the most crucial steps during Swiss company incorporation. All the financial transactions and capital will be managed in the dedicated bank account.
Seek professional assistance to open the bank account and provide necessary documents. These include:
- The Articles of Association
- Identity proof
- Details of business registration
5. Deposit the Initial Share Capital
6. Register the Company
Register your company with the Swiss Commercial Register in the canton where your business will be headquartered. At this stage, you need to submit the necessary documents, including:
- Proof of share capital deposit
- The Articles of Association
- Details of directorship
Things to do after company formation in Switzerland
1. Obtain Necessary Permits and Licenses
2. Register for VAT and Social Insurance
In Switzerland, businesses with an annual turnover of CHF 100,000 or more need to pay VAT. Businesses reaching this threshold need to register with the Swiss Federal Tax Administration (FTA) for VAT purposes.
Businesses also need to register with social insurance authorities (OASI/AHV/AVS) in Switzerland for employee benefits, pension contributions, and other social security obligations. To avoid penalties, it’s imperative to remain informed about insurance and tax compliance.
3. Set Up Accounting and Reporting Systems
How much does it cost to form a company in Switzerland?
Business owners expanding to Switzerland must be aware of the different costs to be incurred during the company formation process.
- Commercial Register registration cost: Approximately CHF 520
- Bank costs: Around CHF 250
- Sole proprietorship services: From CHF 190
- Commercial Register costs for sole proprietorship: Approximately CHF 150
Time required to register a company in Switzerland
Seek Expert Support for Ongoing Compliance and Management Requirements
Even after a company formation in Switzerland, forward-thinking businesses seek a professional hand to ensure tax compliance and financial reporting as per Swiss laws. It’s imperative to regularly review and update the operational processes, corporate governance, and strategic plans to ensure sustainable growth.
It’s wise to have experts on your side when it comes to handling annual filings, balance sheets, income statements, and cash flow statements and submitting the documents to the Swiss Commercial Register. The IMC Group continues to be a leading service provider, assisting global brands file their tax returns and maintaining transparent VAT declarations as per the Swiss tax regulations within deadlines. Successful international brands habitually count on dedicated teams of legal counsellors and advisors to ensure compliance and sustained growth.
