Company registration in Switzerland

Switzerland is equally interesting both for starting a new business and for immigration. Entrepreneurs from all over the world are attracted by the economic prosperity of the country. Swiss companies get a lot of unique opportunities for development, the competent realisation of which, many times over, compensates for the costs of registering and running a business. And the peculiarities of the state structure allow an international company to significantly save on taxes. Below we will look at each advantage of this jurisdiction in more detail.

Why is it advantageous to register a company in Switzerland?

Prestige

Historically, Switzerland is associated in the popular mind with reliability, durability and high-quality standards.

Switzerland as the place of incorporation of your business will add respect for you and your company from business partners. It will be easier for you to conclude contracts, to obtain more favourable terms of cooperation and to receive the products you need for your work with deferred payment.

Tax optimisation

Many foreign entrepreneurs choose this jurisdiction to register their business, as in some cantons the tax burden on a company is much lower than in other European countries.

Favourable geographical position

Switzerland is located in the heart of Europe and neighbours France, Germany, Italy, Austria and Liechtenstein. Switzerland values its neutral status and does not seek to enter political-military alliances. But this does not prevent it from concluding border agreements with its neighbours and being a member of the Schengen Agreement. This, combined with a well-developed transport infrastructure, gives Swiss entrepreneurs not only access to European markets, but also the opportunity to hire qualified specialists from other countries.

Banking system

Swiss banks are characterised by high reliability and convenience, and the complete absence of currency controls greatly simplifies international settlements.

Confidentiality

Swiss corporate law does not prohibit foreign entrepreneurs from using nominee directors who are Swiss residents. However, in this country, the nominality of such a director will be very conditional, as he or she is responsible for the company’s activities and must read and sign corporate documents.

Quick procedure for registering a new company

It is relatively easy to open a company in Switzerland. The country’s authorities are interested in the development of private business as a source of new tax revenues. The Swiss do not impose excessive requirements on future entrepreneurs. With competent legal support of our specialists you will register a new company in 15 working days.

Residence permits and second citizenship

You will be granted a residence permit and the opportunity to move to Switzerland with your family if:

• You have invested heavily in the development of your Swiss company;

• Your business in the country will benefit substantially;

• You offer products or services that are unique to the Swiss market.

A long-term stay in Switzerland and a high degree of integration into local society are sufficient grounds for Swiss citizenship.

Each canton has its own nuances for obtaining a residence permit and second citizenship. To learn more about these nuances, we recommend that you consult our company’s specialists.

Which legal form should I choose to register a company in Switzerland?

Switzerland, like any other modern European country, gives entrepreneurs the opportunity to choose the most suitable type of company for launching a new business.

Most often, foreign businessmen opt for a joint-stock company and a limited liability company. However, if you wish, you can operate on the Swiss market as an individual entrepreneur (this option often attracts specialist professionals and freelancers). You can also conduct your business activities through a partnership.

AG / Aktiengesellschaft — joint-stock company

The AG is one of the two most common corporate forms in Switzerland. This type of company has a number of advantages:

• The liability of the shareholders and management of such a company is generally limited only to their share in the share capital;

• High level of confidentiality – information about the founders of Swiss AGs is not published in the trade register;

• Simple change of ownership procedure — you will not need the permission of other shareholders if you decide to sell your share in the company’s share capital;

• The founder of an AG can use effective tools to influence his company such as shares with preferential voting rights, share transfer restrictions, etc.;

• Joint stock companies have more access to additional investments and large contracts;

• This type of company is equally suitable for small, medium and large businesses.

One shareholder is sufficient to register a joint-stock company in Switzerland. This can be an individual or a legal entity, including another commercial firm. The Confederation has no restrictions on the nationality and tax affiliation of the founders of joint stock companies.

The AG will be considered open when:

• The founders agree on the statutory documents and have them notarised;

• The authorised capital will be deposited in whole or in part in the company’s bank account in Switzerland;

• The company will be registered in the Trade Register;

• The shareholders’ meeting will appoint the Board of Directors;

• A certificate of inspection by the supervisory authorities will be obtained.

The authorised capital of such a company must be at least CHF 100 000. This amount is paid in part or in full before the registration documents are filed by depositing it in a deposit account in a Swiss bank.

In the case of an AG such a deposit is CHF 50 000. If the founding capital of a joint stock company is significantly higher than the minimum, the founders of the company can only deposit 20 per cent of the declared amount. Shareholders only have access to this money once their company has been incorporated.

The share capital of a Swiss AG can be paid in foreign currency or by the transfer of tangible assets (e.g. a car or real estate) by the founder.

Joint-stock companies in Switzerland are managed by a director or by the Board of Directors if the company has more than one director. A shareholder or an employee can act as a director of an AG. Once a year, the AG must convene a shareholders’ meeting, but this does not mean that foreign owners must drop everything and come to Switzerland. The procedure can be conducted remotely via video link.

Since the Swiss cantons use at least two other languages in addition to German, the abbreviation SA from the French «Société anonyme» is also used to designate local joint-stock companies.

GmbH / Gesellschaft mit beschränkter Haftung — company with limited liability

According to official statistics, as of August 2023, there were more than 130 000 limited liability companies in Switzerland. This popularity is due to the fact that this legal form is excellent for registering family businesses, as well as small and medium-sized companies. Other advantages of the GmbH include:

• Limiting the liability of the founders for the debts and financial obligations of the company to the amount of the authorised capital;

• The size of the founding capital is relatively small compared to a joint-stock company;

• Ability to set up a single-founder limited company;

• Easier and less costly registration procedure;

• Possibility to transform a GmbH into an AG without liquidating the company.

The authorised or start-up capital of a Swiss limited liability company must be paid in full or covered by in-kind contributions from the founders (e.g. machinery or real estate). In the first case, this involves placing the funds of the shareholders of the GmbH in a specially opened consignment account in a Swiss bank.

The minimum amount of the founding capital of such a company is CHF 20 000. If the founders declare the amount of the start-up capital in a foreign currency, it must be equivalent to this minimum in Swiss francs.

In Swiss GmbHs, information on the founders and beneficiaries is not confidential and is publicly available on the Trade Register website.

In addition to GmbH, the name of Swiss limited liability companies can be abbreviated to the French “Société à responsabilité limitée”.

Directors and shareholders in corporate structures

There can be only one shareholder in a limited liability company and in a joint stock company. Swiss law does not prohibit the founders of a company from holding directorships in their own firm.

To manage an AG or GmbH in Switzerland, at least one director must be appointed. If your company has more than one director, a Board of Directors is set up and a chairman is elected.

A peculiarity of such Swiss legal forms as GmbH or AG in Switzerland is the necessity to have a Swiss director — a nominal manager from among local residents. In this case, not only Swiss citizens, but also holders of permanent residence permits and long-term B visas are considered residents of Switzerland.

Entrepreneurs are cautious about choosing a nominee director for their company. This is because the nominality of a Swiss director is rather conditional — he signs the accounting documentation and is responsible for the company’s performance on an equal footing with the rest of the management. As a rule, a person with a Swiss residence permit or citizenship is appointed to this position.

Unincorporated forms of doing business in Switzerland

Individual entrepreneur

Unfortunately, not all foreign nationals can do business in Switzerland individually. To do so, you must be married to a Swiss person or have a valid C-category residence permit.

Sole proprietorship status has several advantages over corporate forms of business and partnerships:

• You do not need to pay the authorised capital;

• Your bookkeeping and annual accounts will be much simpler than for AGs and GmbHs (as long as turnover does not exceed the CHF 500 000 mark);

• An individual entrepreneur may not register in the Commercial Register until his turnover reaches CHF 100 000;

• Under certain circumstances, a self-employed person in Switzerland can avoid double taxation and pay only income tax.

The disadvantages of this way of doing business are the full material responsibility of the entrepreneur for the results of commercial activity and the lack of anonymity, as he will be working on his own behalf.

Swiss partnerships

Also in Switzerland, you can do business through a general partnership and a limited partnership.

Full partnership

To register a general partnership, you will need at least 2 founders, who can only be natural persons. You do not need start-up capital, but all members of a Swiss general partnership will be fully jointly and severally liable for its debts.

Although general partnerships are registered in the Swiss Commercial Register on a declaratory basis, this type of organisation is not formally a legal entity and its profits are not taxed at the corporate level. All partners are privately taxed on their salaries, a share of the company’s distributable profits, and interest on the share capital.

Limited partnership

Similar to a general partnership, the establishment of such an organisation will require at least 2 natural person partners. One of them must be an active partner, i.e. a founder who is willing to be liable for the debts of the organisation with all its tangible assets.

Limited partnerships also include sponsor partners whose liability is limited only by the amount of their contribution to the general assets of the organisation. These partners generally do not participate in management and their share of profit sharing differs from that of the active partner.

In Switzerland, it is quite rare for businessmen to register limited partnerships. This form of doing business is usually resorted to when additional funding for a project is needed, but the entrepreneur is not prepared to give his investors the rights of full partners.

Registering a Swiss company: step-by-step instructions

Foreign entrepreneurs turn for help to experienced incorporation agents to save their time and money significantly. Therefore, we will consider such an algorithm of company registration in Switzerland, which implies active participation of Imperial & Legal specialists.

Step 1: Preparatory phase

The entrepreneur contacts our registration agents by making an appointment for a consultation by phone or on Imperial & Legal’s website.

At your first consultation, we will ask you to complete a questionnaire that will help our experienced team to obtain all the information they need to proceed.

At this stage the answers to the 3 key questions are formulated:

1. What will your Swiss firm do?

2. In which canton / municipality will it be registered?

3. What type of company will be registered?

As part of your preparation, you will also need to:

• To come up with a suitable name for your organisation, have it checked for suitability by our staff. As in other jurisdictions, in Switzerland it is not allowed to use existing Swiss business names or officially registered trademarks in the name of a new company;

• Decide on the structure of the future company. You will need to answer several important questions. How many founders will there be in the company? What will each person’s share in the share capital be? In what form will contributions be made? Who will manage the business? As a rule, the agreements reached between the owners are subsequently recorded in the charter documents and minutes of the company’s shareholders’ meeting.

We can help you draw up your memorandum and articles of association. You can use standard forms of memorandum and articles of association, or for an additional fee, we can draw up customised articles of association to take into account the specifics of your business;

• Rent a post office box or a fully-fledged office space in Switzerland, which will then be specified as the legal office in the incorporation documents and application for registration of your company. Also under Swiss corporate law, a local director will need to be appointed.

Step 2: Payment of authorised capital

In order for your Swiss company to be successfully incorporated, you must pay part (for AG) or all (for GmbH) of its authorised capital. We help the entrepreneur to open a special account at a local bank, where the required amount is then deposited.

The Swiss bank issues a certificate which confirms the fact of payment of the authorised capital.

Step 3: Notarisation of documents

A Swiss notary will be required to certify the statutory documents and the application for registration, which must be signed by the founders in his presence. It follows that the shareholders of a Swiss company must attend the meeting with the notary in person or send a representative with a power of attorney. The representative can be a lawyer or a future director of the company.

Step 4: Submission of the application and certified statutory documents of the company for registration

The registration fee is paid and the documents together with the application are submitted to the State Commercial Register. The legal support of Imperial & Legal specialists reduces the probability of rejection to zero. A favourable decision on your application is made within 15 working days, the Swiss authorities register your company and the information about it is entered in the Commercial Register. At the end of this stage, you will receive a certificate of incorporation and incorporation documents.

How long does it take to start a company in Switzerland?

The whole process from the moment you first contact us until your company is already registered in the state register takes approximately 4 weeks, of which about 15 days are spent on the consideration of your application.

How much money will an aspiring Swiss businessman need?

An exact figure can only be given in relation to specific circumstances. The amount will depend on:

• The type of company that will be registering;

• Start-up capital;

• The salary that your Swiss director will have;

• Office rental costs;

• The need for a licence to carry out the work, etc.

For more precise data, we recommend contacting our company’s specialists.

Corporate taxes in Switzerland

This country has a three-tier system of corporate taxation. A Swiss company pays three taxes on its income: confederation, canton and municipality.

Switzerland levies a direct federal corporate tax at a flat rate of 8.5%. However, to calculate the amount payable, the profit after tax at the canton or municipality level is taken into account. Since the tax base for the federal corporate tax will be less than the profits earned by the company, its rate before any taxes is approximately 7.83%.

Corporate tax rates at the level of individual cantons and municipalities may vary significantly and may even be charged on a progressive scale, depending on the amount of a firm’s income.

Therefore, the general approximate range of the maximum corporate income tax rate is between 11.9% and 21.0%, depending on where your business is registered.

VAT

Value added tax is charged in Switzerland on the sale of goods and services at a standard rate of 8.1 per cent.

A reduced VAT rate of 2.6 per cent applies to essential goods. Services related to the provision of accommodation are subject to VAT at the rate of 3.8%.

To find out exactly what taxes your company will pay in Switzerland and what legal tools are available to optimise your fiscal payments, contact our consultants.

How to register a company in Switzerland quickly and cost-effectively?

Imperial & Legal specialists are ready to assist future Swiss businessmen already at the stage of preparation for registration.

Our lawyers support their clients even after your company has been incorporated. We advise foreign entrepreneurs on issues such as:

• Opening a current account with a bank;

• Tax planning and tax optimisation;

• Annual Reporting;

• Business Plan Writing;

• Obtaining residence permit and citizenship for investments.