Opening a company in Switzerland
For many years, Switzerland has held the first place in world rankings in terms of economic and political stability, ease of doing business, development of healthcare and education, /span>quality life. Many non-resident companies are registered in the country, but no one associates the Swiss Confederation with the concept of “offshore”.
Opening a company in Switzerland is a way to a new level in business development, protection of personal assets, the key to gaining a reputation among business partners and a good way to diversify investments . Contrary to popular belief about the inaccessibility and high cost of registering a business in this jurisdiction, Switzerland is suitable for multinational startups, cryptocurrency firms and medium-sized businesses in almost any direction.
If we collect the truth bit by bit among the myths and personal opinions about doing business in Switzerland, it lies in the fact that you cannot do without qualified legal support to open a company in the country. It is almost impossible to independently solve the problem of going through the necessary registration procedures and opening an account in a local bank. But if you get the necessary legal support, we are ready to provide it experienced experts of JSC Lawrange – style own doing business in Switzerland is quick and easy.
Peculiarities of Switzerland as a jurisdiction for registering a business
Note! Switzerland is called “the only island in the world that is surrounded by land”, which is justified by the traditional policy of neutrality and national isolationism. Contrary to the persuasion of its neighbors, this Alpine Republic never became part of the European Union, which made it possible, as a result, not to become a hostage to economic measures that deprived some European countries of their financial independence. Against the backdrop of global economic and political upheavals, the state continues to be an island of material well-being and security.
Switzerland has long defended the principles of the highest priority of banking secrecy, and still leaves some opportunities for anonymity and confidentiality for clients of banking institutions.
By form of government, Switzerland is a confederation consisting of 26 cantons, sovereign subjects. The cantons enjoy broad financial and tax autonomy. In particular, tax rates for legal entities vary greatly, averaging 16.5%. If you choose the wrong canton for your business, corporate tax can reach 40%. However, you can choose cantons with a favorable tax environment (12% income tax).
Note! The most profitable option for registering a company today is the canton of Zug. The worst option is Neuchâtel, which has earned the reputation of “tax hell” in the business environment. The canton of Zurich deserves special attention, which, despite the average tax rates in Switzerland, is popular due to the high concentration of financial institutions and offices of eminent foreign companies.
Important! Taxation of legal entities in Switzerland is carried out at: a) federal, b) cantonal, c) municipal level. Federal taxes are the same for everyone, but at the local level, taxation regimes vary. Tax rates (including income tax and income tax) vary significantly not only by canton, but also within the canton by geminde (communities), of which there are about 2200 in total in the country. Municipal taxes on geminde go to the treasury of the locality.
Opening a business by a foreigner without a residence permit
Important! Contrary to popular belief, a foreigner has the right to establish a business, register a legal entity without a Swiss domicile.
***Note: Domicile (domicile, domicil) is the country or place of permanent residence of a person.
To open a company in Switzerland, a non-resident must fulfill the conditions. First of all – at least one of the directors with the right to sign in the newly formed company must be a Swiss or a resident of Switzerland (a person with a residence permit). At the same time, there is no requirement in the legislation that Swiss residents own the majority or any clearly defined share in the authorized capital / part shares of the company.
The need for the mandatory involvement of local residents in the management of international companies is caused by the peculiarities of the legislation:
- Firstly, when there is no residence permit and permission for employment, it is impossible to work legally in the country, especially in managerial positions (even if we are talking about our own company). A work permit can be obtained later, after the registration of the company. Then you can also apply for a residence permit. But at the stage of starting a business, a local resident is required.
- Secondly, by involving a local resident in the management of the company, the Swiss authorities take care of the possibility of holding this individual liable in the event that they have place where the law was broken.
Registration of a company in the canton of Zug
The most popular place to set up a multinational business in the Swiss Confederation is the canton of Zug. It is the smallest in area (only 239 square kilometers), but the richest and most populous sovereign subject of the country. Canton is famous for its excellent transport infrastructure, clean environment and a large concentration of foreign investors, in particular, funds are invested in the development of cryptocurrency projects. The reason for the influx of investors lies in the favorable tax climate that has been formed here for decades.
Important! For the period from 2021 to 2023, the effective tax burden on income has been reduced to 11.85% in the canton of Zug , and this is the lowest tax rate in the country. This circumstance is an excellent incentive for non-residents to register a business in this particular place.
Recently, in addition to favorable taxation conditions, Zug has attracted foreign entrepreneurs with its loyalty to various types of cryptocurrency business. This the canton is now known in the world as the first real European “crypto valley”, in the “open spaces” of which hundreds of cryptocurrency companies operate. Since 2021, cryptocurrencies (Bitcoin and Ethereum) in the canton of Zug can even pay taxes. This opportunity is available to both individuals and legal entities, provided that the equivalent amount does not exceed 100,000 Swiss francs.
Registration of a company in the canton of Zurich
If you compare Zurich with Zug, the reasons for the attractiveness of registering a company in this canton are significantly different. Zug attracts non-residents with low tax rates, Zurich with a large number of banking institutions and prestige.
For your information! For 2022, the canton of Zurich has a corporate tax rate of 19.7% (subject to certain conditions can be reduced to 17.4%). We are talking about the amount of tax, which includes all three levels of taxation of companies.
The city of Zurich today is the world’s largest financial center, where the head offices of most Swiss banks are located. Here is the Swiss stock exchange, the fourth largest in the world. The city now has many representations and offices of foreign companies, as well as research centers. The advantage Zurich as a place of registration of a transnational business is an application for the respectability and authority of the company.
What are the forms of opening a company in Switzerland?
The goals of establishing a business in Switzerland are determined by the entrepreneur himself, but for choosing legal form (OLF) of this business, it is desirable to involve experts. The selected BPF will depend on: a) the registration procedure; b) further features of reporting and auditing.
Based on experience, Lawrange specialists recommend focusing your choice on two OPF businesses in Switzerland:
Limited Liability Company (GmbH)
Limited Liability Company (Gesellschaft mit baschrankter Haftung, GmbH) – analogue of Ltd and other similar organizational forms in other countries. Participants of the enterprise are liable for risks only by the size of their share in the authorized capital. The features of this OPF are as follows:
- minimum number of founders is one;
- the directors must include a resident of Switzerland;
- no citizenship/residency requirements for shareholders or investors;
- Founding Partner and Director can be the same person;
- Minimum share capital must be 20,000 Swiss francs (CHF) – approximately EUR 19,300;
- setting a condition on depositing capital until the end of the company registration procedure – submission of constituent documents;
- company must report annually according to cantonal regulations;
- Independent audit of the GmbH is not required.
Joint stock company (AG)
It is desirable for a non-resident to create open joint stock company (Aktiengesellschaft AG). According to the general legal characteristics, this is an analogue of similar forms in other countries, when shareholders do not bear personal responsibility for the obligations of the company. Features of this OPF:
- minimum number of shareholders is one;
- Shareholders can be individuals or legal entities (residents or non-residents of Switzerland);
- it is mandatory to appoint a resident of Switzerland as a director – an individual (this person has the right to simultaneously act as a shareholder in other companies);
- Minimum share capital must be 100,000 Swiss francs (CHF) – approximately EUR 96,400;
- 50% paid upon registration;
- Shares must have a par value of at least CHF 100;
- required legal Swiss address ;
- an annual report on accounting, turnover and profit of the company should be submitted to the authorized bodies;
- Independent AG audit is assigned individually – the probability of appointment increases with a large number of employees in the state and a high level of turnover.
For your information! Alternatively, such OPFs as a branch (representative office) can also be considered ), partnership, cooperative, self-employed.
Conditions for doing business in Switzerland
A non-resident founder setting up a company in Switzerland will require a representative in the country with a physical address. Official correspondence will be sent to this address, including from government agencies and local partners.
All Swiss companies are obligated to keep their books and records in the office. Both GmbH and AG are required to file profit and loss accounts every year. At the same time, accounting reports should be prepared in accordance with international standards (for example, IFRS). But bookkeeping is not public.
For your information! The organization of accounting support with the involvement of trusted Swiss partners in solving these problems is ready to be taken over by the Lawrange Lawyers Association.
Firms pass a standard audit if they meet several of these criteria:
- have an annual turnover in excess of 20 million Swiss francs (CHF);
- are engaged in fund activities – their shares are traded on the stock markets;
- have total assets of CHF 20 million or more;
- prepare consolidated financial statements;
- have over 50 employees.
Swiss business advantages
Before the start of the total fight against offshore companies around the world, Switzerland had a “hothouse climate” for non-resident investors. In contrast to classical offshores, against the backdrop of an acceptable tax rate, Switzerland offered foreign entrepreneurs unprecedented economic stability and political tranquility. The international fight against offshore companies has made certain amendments to the regulation of the activities of foreign companies in the country. However, opening a company in Switzerland – both yesterday and today – is a promising, profitable and quite affordable solution.</span >
According to Lawrange specialists, Switzerland as a jurisdiction for opening an international company is distinguished by the following advantages:
- Belonging to the SEPA zone – despite the status of a country outside the European Union and the Eurozone, business entities in Switzerland have access to transactions at very favorable rates within the Single Payments Area in euros;
- double tax avoidance – Switzerland has double tax treaties with more than 100 countries;
- the availability of highly qualified personnel – among local residents you can choose professionals with the necessary professional skills in the field of finance, accounting support, management, marketing;</span >
- absence of corruption in state and local governments, as well as in regulatory and fiscal authorities;
- receipt of marketing bonuses – registering a company in Switzerland enhances the status of the brand and its owners in the eyes of customers and partners, Switzerland has long been strongly associated with respectability.
How to open a company in Switzerland
Important! To register a company in the Swiss Confederation, you have to follow a certain path, observing a number of reservations and nuances. This path can be facilitated by enlisting the support of representatives of JSC Lawrange. Legal support in the course of solving this problem covers both filling out forms and other current issues, as well as fundamentally important points, in particular, the development of constituent documents, the selection of a local director for the company.
Company registration steps look like this:
- Collection of documents and information, specifically follows:
– select 3 desired company names from least to highest priority;
– fill in the questionnaire;
– provide a company structure containing information about beneficiaries and shareholders (will be visible in the registry in case of GmbH, and hidden in case of AG);</span >
– define the desired location of the company’s office;
– develop a memorandum of association and articles of association.
- Opening a temporary (technical) account for depositing the authorized capital and obtaining the appropriate certificate from the bank:< /li>
– for GmbH from 20,000 Swiss francs (CHF);
– for AG a minimum of 50,000.00 Swiss francs (CHF), i.e. from 50% of the share capital.
- Sign and send documents original to Switzerland.
- Company formation procedure, which takes about one month in total, includes:
– making an appropriate entry in the state. registry;
– publication of information about the company in the Commercial Register (term – 10 days);
– opening a permanent bank account;
– social security registration;
– applying for a VAT number.
***Note: The Trade Register (Handelsregister) is a government register. a register containing information about all types of businesses and all companies in Switzerland, their addresses, shareholders.
Documents for registering a company in Switzerland
Personal documents of beneficiaries, founders, shareholders, directors, as well as corporate documentation are submitted to the registration authority:
- copies of internal and foreign passports – notarized;
- utility bill – proof of residential address;
- completed registrar application form and articles of association;
- bank statement (certificate) of authorized capital;
- a lease agreement for an office space.
The cost of registering a company in Switzerland
Lawrange Lawyers provides turnkey company formation services in Switzerland. Cost of such services:
- Registration of GmbH – 8950 EUR;
- AG registration – 9950 EUR.
- local director (resident of Switzerland ) for a period of 1 year (provided for the possibility of opening an account in a Swiss bank, can be removed as an option upon request);
- legal address for 1 year;
- payment of state fees and charges upon registration;
- notary fees;
- guided by our enrollment representative from start to finish.
***Note: Additional costs arise due to the need for a certain list of documents to be certified by a notary.
Switzerland has been and continues to be the “gold standard” for doing business in many areas, in particular for transnational business. Financial and economic potential, lack of political upheavals, acceptable tax rates, a stable banking system, as well as clear and understandable business regulations are excellent prerequisites in order to receive profit and not worry about the security of assets in the country.
With the experienced assistants of JSC Lawrange, you can speed up and simplify the procedure for registering a company in Switzerland. At the request of the client, the issue with the corporate bank account will be closed, as well as accounting support and assistance in organizing an audit (in those cases when required).
Can a foreign person register a company in Switzerland?
Yes. The legislation of the country does not restrict non-residents in the right to conduct business. However, when creating a company in Switzerland, a foreigner must comply with certain conditions. In particular, it is necessary to include a Swiss (Swiss citizen or resident) as a director.
What kind of business to do in Switzerland?
The country is well suited for a variety of businesses, from tourism to financial services. In recent years, Switzerland is ready to offer attractive conditions for startups who develop projects in various IT areas. Switzerland has created favorable conditions for cryptocurrency activities.
How much does it cost to open a business in Switzerland?
The basic cost of services for supporting the registration of a company in the form of GmbH is 8950 EUR, in the form – 9950 EUR. In addition, you should take into account the additional costs for certification of certain documents by a notary.