Register company in Switzerland: Introduction
To register company in Switzerland is hassle-free if you are familiar with the entire incorporation process. With Tetra Consultants at the wheel, you will be able to dedicate your time and resources to other more important channels. With our lean-and-mean mentality, you can rely on our team of experts to provide you a seamless experience throughout the whole process to register company in Switzerland. Our ultimate goal is for your Switzerland company to be operationally ready within the stipulated time frame. Our service package includes everything you will require to register company in Switzerland:
- Register company in Switzerland with Commercial Registry Office
- Professional Switzerland nominee director service
- Local company secretary and registered address
- Corporate bank account opening
- Financial license application (if applicable)
- Annual accounting and tax services
How long to register company in Switzerland and open corporate bank account?
- Tetra Consultants team of experts will complete the process of offshore company registration in Switzerland through a seamless and fuss-free procedure.
- Upon receiving the required due diligence documents of the directors and shareholders, Tetra Consultants will conduct Switzerland company registration search to check the availability of your preferred company name.
- The process to register company in Switzerland with the Commercial Registry Office can be carried out remotely and you will not be required to travel to Switzerland during the registration process.
- Within 3 weeks, you can expect to receive the documents of your new company including Certificate of Incorporation, Memorandum of Association (MoA) and Articles of Association (AoA).
- After successful company formation, Tetra Consultants will assist to open a corporate bank account with a local Switzerland bank or with an overseas global bank depending on your long-term goals and objectives. It will take around 4 weeks to open a corporate bank account.
- Consequently, you can expect to start operations and issue invoices with your Switzerland company within 7 weeks upon engaging Tetra Consultants.
- Tetra Consultants’ team of Chartered Accountants will ensure that your newly established company will continue to meet regulatory laws set by the Swiss Tax Administration. This includes providing you with monthly bookkeeping, preparation of financial statements and annual tax return filings.
Can a foreigner register company in Switzerland?
- Switzerland’s government offers foreign investors several options on the different company types in Switzerland to pick from when registering a company. Tetra Consultants will advise you on the steps and requirements for starting a business in Switzerland as a foreigner.
- Generally, you will need 1 shareholder and 1 director to open a limited liability company in Switzerland. While there are no nationality requirements for the director or shareholder, at least one of the directors in the company must reside in Switzerland.
- For LLCs, you must have a minimum share capital of Swiss franc 20,000.
- For partnerships, branch offices and representative offices, there is no minimum share capital requirement for setting up.
- Resident companies in Switzerland are required to pay a corporate income tax for their taxable profits sourced from Switzerland. This tax is levied at several levels: federal, cantonal and communal. While the federal tax rate is fixed at 8.5%, cantonal and communal tax rates can vary depending on the location of the company.
- There are many types of business structures in Switzerland. When deciding the most suitable structure, it is important to consider various factors that include but are not limited to availability of personal liability protection, tax ramifications, ownership and management flexibility as well as compliance requirements. Each business form will come with its distinctive features.
- Before the start of the engagement, Tetra Consultants will fully understand your business before recommending the most optimum business structure in Switzerland. Some considerations we take into account include the type of business activity, tax obligations and nationalities of shareholders and directors.
- Our consultants will also offer more information on the requirements imposed to set up these entities. Generally, for most companies in Switzerland, you will only require a director with Swiss permanent residency, a local registered address and registered agent to register the company in Switzerland
Types of business structure to consider when you register company in Switzerland
- Tetra Consultants will register company in Switzerland on your behalf. There are 4 main Swiss company types available for setting up in Switzerland, including: Limited Liability Company, Partnership, Branch Office and Representative Office.
Limited Liability Company (GmbH/SARL)
- Formed by one or more individuals, a limited liability company is its own legal entity.
- Commonly known as a Swiss LLC, in short GmbH/SARL, this structure serves different features from the others. By paying an initial share out of the predetermined capital, each partner’s liability is held liable only up to the predetermined nominal capital as per paid out by him.
- There are not many strict Swiss GmbH requirements imposed by the Government. Minimally, you will require a capital of Swiss franc 20,000 that is to be paid in full during the time of formation. All partners are required to be registered in the commercial register.
- According to the Swiss laws, all Switzerland companies are required to appoint at least one local resident director among the managing officers and the board of directors. However, there are no restrictions on the citizenship of the remaining partners and managers as well as the shared ownership.
- Typically, an SARL is intended for small or medium-sized enterprises. Management of the company can be delegated to all members and there are no restrictions in transferring shares. Bigger enterprises tend to decide to incorporate a public Swiss limited company (AG/SA) instead. The main difference between SA and SARL is that an SA can be listed on the stock exchange and it has a higher minimum capital requirement. There are also stricter requirements for an SA with regards to shareholders’ access to information and management decisions of shareholders.
- You will also have to maintain an office and appoint a local registered agent whose main duty is to accept service of process and other official notices or announcements.
- With a SARL, only 1 shareholder is required to incorporate.
Partnership
- A partnership comprises 2 or more co-owners running a business together.
- Since a partnership is not a separate legal entity, each partner may be held liable for all the debts and liability incurred by the business. Each member of the partnership is also not a separate taxpayer and will have to pay taxes based on the particular partner’s share of the company’s earnings.
- There are two main types of partnerships, which are the General Partnership and the Limited Partnership.
- In a General Partnership, partners are liable jointly for the debts or profits of a partnership.
- On the other hand, in a Limited Partnership, there will be at least one limited partner and one general partner present. General partners shall be jointly and severally liable for the debt of the company while limited partners will only be liable to the extent of their capital contributions.
- To set up a partnership, there are no legal stipulations as to the amount of minimal capital. Minimally, you will require two persons with one at least being a permanent resident in Switzerland.
Branch Office
- Foreign companies incorporated outside of Switzerland can choose to incorporate a branch in Switzerland.
- The Switzerland branch must file annual tax returns and submit audited financial statements. However, the parent company will be held liable for the debt and liability incurred by the branch.
- The Switzerland branch will not be recognized as a separate legal entity from the parent company.
- There is no minimum capital requirement to set up a branch in Switzerland.
- A branch will be exempted from 35% withholding tax on payments to the parent company.
- A branch must have a local representative who resides in Switzerland.
Representative Office
- Foreign companies incorporated outside of Switzerland can decide to incorporate a representative office in Switzerland.
- The representative is not permitted to perform any income-generating business activities.
- Business owners may decide to incorporate a representative if their main purpose is to conduct market research and promote the activities of its parent company.
- A representative does not have the authority to negotiate contracts and its employees cannot bind the company.
- A representative office must have a local representative who resides in Switzerland.
How to register a company in Switzerland?
Tetra Consultants’ team of experts has outlined the prevalent steps required to register company in Switzerland. We recommend you to read through the steps before you advance to offshore company registration in Switzerland.
Step 1: Choosing an optimum business structure before you register company in Switzerland
- Prior to Swiss offshore company formation, it is essential to pick the correct type of company.
- Based on your business structure and long-term goals, Tetra Consultants will advise you on the most optimum business form, paid up share capital, corporate structure and business licenses if applicable.
- Generally, Tetra Consultants would recommend setting up a Limited Liability Company as it is the most common business structure in Switzerland.
Step 2: Reservation of company name
- Before Tetra Consultants proceed to register company in Switzerland, we will search and reserve your company name through the Commercial Registry. The Swiss trade register, also known as the Registries of Commerce of Switzerland, will contain a list of businesses registered in Switzerland.
Step 3: Preparation and submission of relevant documents to register company in Switzerland
- Before Tetra Consultants can incorporate your company in Switzerland with the Swiss business registry, you are required to provide a list of required KYC articles. These include the names of directors, company’s resolution and identification proof.
- Based on the information provided, Tetra Consultants will draft and notarize the Memorandum and Articles of Association, business plan and other incorporation articles.
- Upon successful registration of the company with the Commercial Registry, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association and other corporate articles to your preferred address.
Step 4: Corporate bank account opening after you register company in Switzerland
- Depending on the business structure you have chosen to register company in Switzerland, the articles required to open a corporate bank account will be slightly different.
- Tetra Consultants will help in consolidating the necessary details and opening a corporate bank account with a reputable bank of your choice.
- Typically, directors and shareholders are not required to travel to Switzerland to open the corporate bank account. However, if travel is required, we will have a representative accompany you to the bank meeting. Alternatively, our team will negotiate with the banks to conduct a conference call instead or to request for a waiver.
- Once the bank account has been successfully opened, Tetra Consultants will courier the internet banking token and access codes to your preferred address.
Swiss Financial License
- In 2020, new regulations were enacted under the Financial Services Act (FinSA) and Financial Institutions Act (FinIA) to introduce new licensing requirements for finance companies operating in Switzerland.
- The FinIA lists five categories of financial institutions: portfolio managers, trustees, managers of collective assets, fund management companies and securities firms.
- Previously, some categories of financial institutions such as portfolio managers did not need a license to operate. Instead, they operate under the supervision of a self-regulating organization or the Swiss Financial Markets Supervisory Authority (FINMA).
- With the enactment of the new regulations, all financial institutions are required to obtain a license from FINMA to engage in financial-market related activities.
- Under the new Act, all financial entities must also adhere strictly to the financial, organisational and risk-minimisation requirements stipulated by FINMA.
- In 2019, Switzerland introduced a new FinTech license[LYX2] for financial enterprises. The FinTech licence allows companies to receive public deposits of up to CHF 100 million if these deposits are not invested and no interest is paid on them.
- Since the FinTech license is not designed for a specific financial activity, it provides fintech businesses with greater opportunities, while allowing them to enjoy the relaxed requirements of the FinTech license.
- Based on your business activity, Tetra Consultants will apply for the relevant financial license if applicable.
Accounting and tax obligations
- Accounting and tax considerations are important factors when incorporating your company. By outsourcing your Swiss accounting and tax obligations to Tetra Consultants, you can be confident that you will be in the best hands. Our team of consultants will ensure that your firm’s financial statements, corporate tax returns and audits are timely completed without the need for you to travel.
- Additionally, outsourcing your accounting and tax needs to Tetra Consultants will allow you to reduce overhead costs while being ensured of timely reporting and filings. Before the start of the engagement, our accounting team will also keep you updated of all the required deadlines and expectations. Thereafter, we will prepare all required filings in advance to ensure that the stipulated deadlines are met.
Annual reporting requirements
- Typically, a Swiss company’s financial fiscal year is from 1 January to 31 December. Tax returns are required to be filed every year normally within 3 months upon the end of the tax period.
- Generally, most Switzerland-incorporated entities must maintain proper books of account and retain such records for a minimum of 10 years. This requirement is also applicable to Sole Enterprises and partnerships generating sales revenue of minimally Swiss franc 500,000 in the last financial year.
- Companies who exceed 2 of the following thresholds in 2 consecutive business years are also mandated to perform audits. Otherwise, they may opt out of the audit requirement. These requirements include:
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- A balance sheet total of Swiss franc 20 million;
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- A revenue of Swiss franc 40 million; and
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- An annual average of 250 full-time equivalent employees
Income Tax
- Corporate income tax is only placed on resident companies for their taxable profits sourced from Switzerland.
- For foreign investors, you may be subjected to a corporate income tax if you are partners of a Swiss business, own real estate in Switzerland or deal with a broker of Swiss real estate property. Otherwise, the tax will only be levied on your Swiss-sourced income.
- At a federal level, a flat rate of 8.5% is applicable on profit after tax. It is to note that at other cantonal and communal levels, laws will differ and so will the tax burden.
Value-added tax
- A value-added tax will also apply for companies, based on the reported sale amount for goods and services. Typically, the Value-Added Tax is levied at a rate of 7.7%. However, for certain industries such as the hotel industry, you can expect a lower Value-Added Tax.
- Based on your business residence, Tetra Consultants will continue to advise you on your respective tax obligations.
Why register company in Switzerland?
- Before you register business in Switzerland, it is important to understand the business landscape of the jurisdiction. This is to ensure that your newly established company will be able to safely and legally conduct business, while striving towards your long-term business goals.
Political
- The political scene in Switzerland is met with great stability. Neutral in its political relationships with other countries, the local government in Switzerland is also a strong entity. All Swiss Cantons are met with their own legislatures and governments. This ensures that transparency and a form of check-and-balance is available in the country.
- According to Transparency International’s 2020 Corruption Perceptions Index, Switzerland is ranked 3rd among 180 countries when it comes to public sector corruption.
- With harsh rules against migrants, Switzerland’s policy and stance on asylum seekers and migrants have been heavily criticized by a human rights group, Amnesty International, in claims that it has been violating international legal principles.
Economic
- As a member of the European Free Trade Association, Switzerland benefits from several bilateral agreements that eliminate barriers to market access. Cross-border transactions are largely simplified, exempting goods from various charges or custom duty.
- According to the 2019 Global Competitiveness Report published by the World Economic Forum, Switzerland was ranked 5th among 141 countries when it comes to competitiveness.
- The Swiss franc is among the strongest, even so substantially against both the US dollars and the euro. The strong currency Switzerland possesses also indicates the strong economy Switzerland owns.
Social
- The 4 national languages of Switzerland include German, French, Italian and Romansh. Even so, according to the Education First English Proficiency Index, Switzerland is ranked 18th out of 100 countries when it comes to the level of English proficiency within its population. This means that you can expect close to no language barrier when doing business in Switzerland.
- According to the Statistical Office, while burglaries in Switzerland have dropped in 2019, fraud offences have instead more than doubled.
- According to the Organisation for Economic Co-operation and Development’s Better Life Index, the Swiss are in general more satisfied with their lives than the average measured by the Organisation for Economic Co-operation and Development
Technological
- According to the World Bank, in 2019, around 93.1% of its population is on the Internet. This suggests the great interaction between technology and the Swiss.
- The Swiss National Science Foundation supports 8,500 scientists annually. Its contribution has led to Swiss’ strong position within the research industry.
- According to the World Intellectual Property Organisation, Switzerland is ranked the world’s most innovative country in 2020.
Legal
- Switzerland has facilitated a business-friendly environment for businesses through its taxation laws. With great incentives offered by most Swiss Cantons to businesses, doing business in Switzerland is financially rewarding.
- The unified Federal Civil Procedure Code in force mandates that all Cantons provide for an expedited procedure where the amount at stake in commercial disputes does not exceed Swiss franc 30,000.
- In recent times, greater criticism has risen against Swiss supreme court judges who are said to be members of political parties and are reliant on their parties in their elections. This suggests that the judiciary may not be all that independent.
Environmental
- Switzerland adopts a diversified supply of energy to meet its needs. Its shift away depending on fossil fuels have helped combat environmental issues.
- Pledging its alliance in protecting the environment, Switzerland has reaffirmed its plan for climate action until 2030 under The Paris Agreement.
- The Swiss are increasingly recognising the importance of environmental conservation. This change in attitude is observed in a surprising outcome achieved at the Swiss 2019 elections where the Green parties managed to clinch an unprecedented share of the votes.
Looking to register company in Switzerland?
- Tetra Consultants will be your one-stop solution for all your concerns regarding how to register a company in Switzerland. Our services include company formation, registered agent, registered address and business bank account opening.
- Contact us to know more about how to register company in Switzerland. Our dedicated and experienced team will revert within the next 24 hours and answer all your queries.
FAQ
What is the best business to start in Switzerland?
- The manufacturing, financial and tourism sectors are the major sectors in Switzerland that one may consider setting up a business in.
- One of the major drivers of the Swiss economy, the manufacturing sector has a strong global presence due to the high levels of innovation and superb quality of goods. Switzerland’s main exports include machinery and equipment, watches, chocolate, medical products and clothing. Hence, it may be profitable to set up a business selling such products in Switzerland.
- Another major industry is the financial industry. Due to the strict requirements to set up a financial company and the strong regulatory laws, Switzerland financial entities are generally regarded to be more credible and secure. Client information is also kept strictly confidential in Switzerland, and it is a criminal offense to reveal any personal information about a client. One of the largest offshore financial centres, Switzerland is a reputable jurisdiction for financial entities. Hence, it is profitable to set up a financial business in Switzerland. The introduction of the new FinTech license also presents new business opportunities to start-ups.
- Lastly, the service sector, consisting of the financial and tourism industries, contributes to more than 70% of the GDP in Switzerland. Switzerland is an attractive tourist spot due to the beautiful scenery, nature parks and ski resorts. As such, starting a small business in Switzerland in the tourism industry may be profitable.
How much does it cost to start a business in Switzerland?
- The minimum capital requirement for a limited liability company in Switzerland is Swiss franc 20,000. There are no minimum capital requirements for a partnership, branch and representative office in Switzerland.
- As for Tetra Consultants’ engagement fees, this will depend on the exact services required from Tetra Consultants. Our fees are inclusive of government fees and all fees will be clearly stated in our engagement letter prior to the start of the engagement. Tetra Consultants believes in transparency with our valued clients and there are no hidden fees.
Do I need a company secretary to incorporate a company in Switzerland?
- No, a company secretary is not necessary to incorporate a company in Switzerland. However, Tetra Consultants can provide you with a local secretary to assist in the annual tax filing and accounting requirements.
Do I need a resident director to incorporate a company in Switzerland?
- Yes, a resident director is needed to incorporate a company in Switzerland. However, the resident director does not necessarily need to have Swiss citizenship. In the case of a partnership, at least one of the partners must be a Swiss resident. For branch and representative office, the company must elect one Swiss representative.
Are there any business restrictions for foreigners who incorporate in Switzerland?
- No, there are no restrictions on the type of business activities a foreign owned company can undertake in Switzerland. However, it may be necessary to obtain a license or further approval if your company is operating in certain regulated industries such as banking, transport, insurance, real estate, defence and media.
Do companies in Switzerland need to file accounts?
- All companies in Switzerland are required to maintain proper books of account and prepare an annual report every year. The records must be retained for at least 10 years and available to all shareholders of the company. However, it is not necessary for small businesses to file the annual report with the Commercial Registry.
- Only companies who exceed 2 of the following thresholds in 2 consecutive business years will be required to perform audits. Otherwise, they may opt out of the audit requirement. These requirements include:
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- A balance sheet total of Swiss franc 20 million;
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- A revenue of Swiss franc 40 million; and
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- An annual average of 250 full-time equivalent employees.
What is the regulatory environment in Switzerland?
- In Switzerland, all companies are subjected to both federal laws and canton laws. The judicial languages used in court are German, French or Italian, depending on the location the court is situated in. Each canton has its own regulation, laws and tax system.
- Generally, the federal government is only in charge of foreign affairs and some aspects of economic policy. The economic and social policy of a canton will depend largely on the respective cantonal authority. As such, it is important to understand the business law in the canton your company is incorporating in. Tetra Consultants will advise you on the regulations you should take note of before company incorporation.
What are the financial incentives available if I incorporate in Switzerland?
- The governments grant tax holidays for newly incorporated companies in Switzerland. Some cantons in Switzerland may also offer grants and allowance for training programs for new businesses that employ local workers.
- There may also be monetary incentives for companies that set up in specific industries such as the IT, tourist and technological industry, depending on the canton the company is incorporated in. Cantons also offer a more competitive corporate tax rate than the federal tax rate. Hence, it is important to consider the monetary and tax incentives when choosing the canton to incorporate your company in.
Where is company information kept in Switzerland?
- The commercial registry of businesses in Switzerland is held at the cantonal level. While most commercial laws are governed by the federal government, specific rules relating to business activity, company incorporation and tax incentives are governed by the respective canton.
- As such, the cantons are in charge of administering the commercial registry which is overseen by the federal government.
How to set up a company in Switzerland as an EU/non-EU citizen?
- The process of starting a business in Switzerland as an EU citizen and starting a business in Switzerland as a non-EU citizen is different if you do not wish to employ the services of a nominee resident director. Since a company in Switzerland requires at least one resident director, you will need to ensure that you have a resident permit if you wish to be considered the resident director of your company. There is no startup visa in Switzerland.
- If you are an EU citizen, you can opt to apply for a B permit. EU citizens do not have to be employed to apply for a B permit; they can procure a B permit as long as they prove that they have the financial capacity to support themselves.
- If you are a non-EU citizen, you can opt to apply for a B permit or a C permit. Non-EU citizens must have an employment contract to apply for a B permit. Alternatively, they can apply for a C permit if they have passed the language proficiency test and lived in Switzerland for at least 5 years.
How do I set up an LLC in Switzerland?
- To set up an LLC in Switzerland, you will need a shareholder and a director of any nationality. At least one of the directors must reside in Switzerland. You must also have a minimum share capital of Swiss franc 20,000.
- Tetra Consultants will assist you with the set up process. You will have to provide the necessary KYC documents. These include the names of directors, company’s resolution and identification proof. Based on the information provided, Tetra Consultants will draft and notarize the Memorandum and Articles of Association, business plan and other incorporation articles.
- Tetra Consultants will then proceed to incorporate your company. Upon successful registration of the company with the Commercial Registry, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association and other corporate articles to your preferred address.
