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Switzerland - Self-Employment and Business Start Ups
Although there is no financial assistance in starting a business, a number of organisations offer practical assistance. You may start a business in Switzerland as a sole proprietorship, a general partnership (G: Kollektivgesellschaf), a limited company equivalent to a plc. or corp. (G: Aktiengesellschaft AG, F: SA), a limited partnership (G: Kommanditgesellschaft), or a private limited company (G: Gesellschaft mit beschränkter Haftun GmbH, F: Sàrl).
Setting up a limited company is more complex, although in the long-term does have tax advantages. A GmbH, which is equivalent to an LLC and is suitable for a small business, must also be registered in the Commercial Register and is required to have a minimum of one resident manager and at least one shareholder. The business name does not have to include an owner's surname. A board will be appointed and there will be other formal documents to complete. For an AG the start-up procedure is similar, and at least one board member must be resident in Switzerland. In both cases, start-up capital is required to provide for shares. For a GmbH, the start-up capital is CHF 20,000 minimum, rising to CHF 100,000 for an AG. This would be deposited in a locked bank account and can be arranged by your bank (charges apply).
You must apply for a permit before you can trade if you are starting a business in a regulated field. If you are unsure, the Federal Office for Professional Education and Technology can advise on whether this applies.
Whatever type of business you have, you will become liable for VAT (G: Mehrwertsteuer, F: TVA) if your annual turnover is greater than CHF 75,000. Once you reach this limit, you should register for VAT within 30 days with the Swiss Federal Tax Administration (G: Eidgenössische Steuerverwaltung ESTV, F: Administration fédérale des contributions).
You can buy a business in Switzerland, but are advised to carefully research the risk and potential of any business that is for sale. The Small and Medium Enterprise Portal includes a useful checklist (in German, French and Italian) of questions to ask, including the financial viability of the business, current satisfaction levels of customers, the potential for future growth, and whether existing contracts can be transferred to the new owner. See Useful Resources for link to the full checklist. You should also confirm whether buying a going-concern includes the business premises and not just stock and equipment. Note that separate regulations apply to the purchase of real estate in Switzerland.
How you will be taxed depends on the type of business you run. A sole proprietorship will be taxed as an individual. The tax calculation will take into account all private and business income, which will include profit, salaries and interest. Losses and business expenses can be applied as deductions in calculating tax liability. In a partnership, each partner likewise pays taxes according to the individual share of business income and assets, in addition to private income. Buildings and vehicles can only be treated as tax deductions after a year, and there must be a clear division between business and private use when claiming expenses, as only commercial use will be eligible as tax deductible.
By contrast, a limited company (including limited partnerships) will be taxed as a company, independent of the individual(s) who run it. The company will therefore be taxed on income and capital, and the individual(s) will be taxed on dividends and shares. The rate at which the company is taxed and the way in which tax liability is calculated vary at a cantonal level. As companies do not have the ability that individuals have to leave the church in their canton, in most cantons the company will also be charged for Church Tax.
Social insurance contributions are required by the self-employed as well as the employed, but they contribute to social insurance at different rates. The contribution to the old age pension (G: AHV, F: AVS) is 7.8%, plus a further 1.4% to disability insurance (G: IV, F: AI) and 0.5% to the loss of earnings compensation scheme (G: EO, F: APG). Note that this rate varies according to income, and the maximums have been quoted here. You will also be required to hold accident insurance (G: BU/NBU, F: AP/ANP) and this can be taken out via SUVA. With regard to the 2nd and 3rd pillar pensions, you have a couple of options. You can opt in to a 2nd pillar occupational scheme (and top up, if wished, with a 3rd pillar private pension) or you can simply make all your pension contributions to a 3rd pillar private pension. There can be significant tax savings to this approach as you will be able to pay in a greater amount each year than employed persons and these payments will reduce your annual taxable income. If you are a limited company, you will also need to set up an occupational pension for employees.
A detailed guide in English to starting a business in Switzerland is available from gruenden.ch (see Useful Resources). This includes a full directory of business networks, investors, potential grant providers, and business sponsorships and awards.
Accountancy is a regulated profession in Switzerland and you should not have difficulty in finding a good accountant. Many also speak English. There are a number of terms for accountants in German, including Finanzberater, Buchführer and Bilanzbuchhalter. The term Treuhand is also frequently used for finance professionals in Switzerland. A (chartered) accountant is un comptable (agréé) in French. An online register such as http://www.die-finanzberater.ch/ is an easy way to locate financial professionals in your location. However, you may feel more confident in selecting an accountant by first asking for recommendations from other local business owners or the expat community.
Gruenden 2.0 -- start-up guide
Although issued by the canton of Zurich, this free online guide is an invaluable source of information for anyone wishing to start a business in Switzerland
OSEC Business Network Switzerland
OSEC Zurich, Stampfenbachstrasse 85, P.O. Box 2407, CH 8021 Zurich
Tel: +41 (0)44 365 51 51
Email: [email protected]
Swiss Federal Tax Administration
Eidgenössische Steuerverwaltung ESTV, Hauptabteilung Mehrwertsteuer, Schwarztorstrasse 50, CH 3003 Bern
Tel: +41 (0)31 322 21 11
Email: [email protected]
For compulsory accident insurance
Suva Headquarter, Fluhmattstrasse 1, CH 6002 Luzern
Tel: +41 (0)848 820 820
Email: Use contact form
Federal Office for Professional Education and Technology (OPET)
For more information on regulated trades and professions
Federal Office for Professional Education and Technology OPET, Effingerstrasse 27, CH 3003 Berne
Tel: +41 (0)31 322 21 29
Email: [email protected]
State Secretariat for Economic Affairs: Commercial Athorisations
A full list of commercial activities requiring permits or special authorisation, with links to further information
Swiss SME Portal: Buying a business checklist
Online directory of finance professionals in Switzerland
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