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Company Incorporation in Switzerland

Switzerland with its attractive business regulations for international investors is a gold standard for business incorporation. The country is home to well-known multinational corporations, but more than 99% of its companies are small and medium enterprises that employ less than 250 people. 83.9% of SMEs in Switzerland survive the first year, which is a very high rate for business. Switzerland seems to be a good luck charm that we invite you to try.

The general business incorporation procedure in Switzerland follows the same pattern in all cantons, but there are still some local peculiarities. The mission of the International Wealth team is to help you go through the business incorporation smoothly, with any arising issues addressed by specialists.

Firm in Switzerland - photo

The contacts above will allow you to quickly get in touch with the experts of the International Wealth portal, get advice, and order legal support for the procedure of business incorporation in Switzerland and opening a bank account.

Why Opt For Business Incorporation in Switzerland?

Switzerland ranks first on the list of business jurisdictions as one of the most stable and business-friendly countries in the world. Are you interested in holding, service, or trading business incorporation in the most advanced business environment? The incorporation of a company in Switzerland is definitely for you.

Switzerland offers limited quotas for foreign workforce moving to the country, and this restriction can be removed by business incorporation in Switzerland.

If you need help with the incorporation of your company in Switzerland, please contact International Wealth experts by email specified at the end of this article.

Study the list of rules and recommendations prior to business incorporation in Switzerland to be prepared to meet the requirements. Business incorporation implies careful planning. You should choose the company name and business structure, and then prepare the documents required for business incorporation.

Investors and business developers who choose Switzerland as a base for company incorporation can benefit from many advantages. Here are some of them:

  • The company will not be considered an offshore company at the time of incorporation even if it operates in such a status. Important business benefits and government assistance remain available.
  • Upon incorporation, companies in Switzerland get unhindered access to one of the most advanced and highly developed business markets in Europe. You can take advantage of the leading law companies, teams of accountants, and attractive tax systems.
  • Although the banking system of Switzerland has experienced some fluctuation in recent years, companies are still in a good position thanks to a stable and resilient economy.
  • The tax treaty network of Switzerland covers more than 100 countries. Companies do not need to worry about double taxation or technical subtleties if they do business in several countries.
  • There is no doubt that Switzerland is a safe and stable European country in terms of politics, banking and investment. Benefit from the country’s hard currency, as well as friendly and predictable public administration.
  • Legal opportunities, such as special regulations for ICO and crypto/blockchain companies.
  • Information confidentiality for business investors and their investment
  • Last but not least, Swiss image and Swiss quality!

In fact, the process of business incorporation in Switzerland does not take much time but may entail certain legal difficulties. Our experts can minimize them by providing professional assistance in filling out forms and drafting company constituent documents required for business incorporation.

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Is Switzerland a Tax-Free Haven?

Let’s get clear on what we mean by “tax haven.” It typically refers to a jurisdiction that offers minimal tax burden to foreign natural persons and companies, but the word “minimal” means that experts may have different opinions as to which countries to include in this list.

Switzerland is definitely NOT a tax-free jurisdiction, but it still can be considered a low-tax one – depending on the countries you choose for comparison! Here is an example of corporate tax rates in 2022:

  • Puerto Rico – 37%
  • Brazil – 34%
  • Portugal – 31%
  • Singapore – 17%
  • Hong Kong – 16%
  • Switzerland – 14.93%
  • Qatar – 10%
  • Hungary – 9%
  • Barbados – 5%
  • Bahamas – 0%
  • Dubai – 0%

What we can derive from this list is that Switzerland is an appealing country for business incorporation as the corporate tax is low as compared to other countries (and it is definitely attractive as compared to the countries with similar infrastructure and business conditions!), but it is not a zero-tax jurisdiction. There is no precise definition of “tax haven”, and so we cannot objectively say whether Switzerland falls into this category or not. 

You probably noticed the decimal fraction in the tax of Switzerland – 14.93. The matter is that the tax burden varies considerably from canton to canton, and this is where you can benefit from substantial tax relief. Contact our experts to select the best canton in terms of taxation for your business incorporation.

Advantages of Business Incorporation in Switzerland

Tax competition between cantons has led to a steady increase in the number of business incorporations by non-residents. The decision on business incorporation in Switzerland will give you a number of pleasant bonuses:

  • a possibility to open a company account in Switzerland
  • income growth due to an effective corporate tax rate
  • a possibility for businesses to get exclusive access to the international market by significantly reducing the cost of customs duties
  • extremely high stability of the local currency despite the challenges of the global financial market

Types of Companies Available for Incorporation in Switzerland

The government of Switzerland allows companies (both local and foreign ones) to operate in almost any way. However, there are some restrictions on legal and operational activities.

Here are the varieties of companies available for incorporation in Switzerland independently: trading, brokerage, investment companies, financial transaction processors, and legal offices.

There are several different organizational and legal structures to be used for company incorporation. The most popular ones are GmBH, AG, individual entrepreneurship, and Limited Partnership. You will have to meet a list of requirements to proceed with business incorporation.

Company Taxation in Switzerland

There are countless tax exemptions for companies, moreover – favorable exemptions for businesses that do not operate within Switzerland. Companies operating outside Switzerland but headquartered in the country are still entitled to tax relief.

One of the cantons that we recommend for business incorporation in Switzerland is Neuchâtel where the tax rate is similar to the world’s favorite – the canton of Zug. Neuchâtel’s current corporate tax rate is only 11%, being one of the lowest corporate rates in the world. An important advantage of Neuchâtel is that it is often used for high-tech business incorporation and receives the support of the global technology boom.

If you need help with company incorporation in Switzerland or want a qualified team to reduce the likelihood of risks and investment challenges, please contact International Wealth experts. You can find more information about our corporate services on the website.

Please choose the canton that suits your business best and contact us to find out the details of company incorporation in it.

Forms of Legal Ownership in Switzerland

The best way to go about selecting the right organizational and legal form to launch your business incorporation process is to provide full information to an expert who will match it with the existing possibilities and advise you on the consequences of each choice. Choosing the wrong form for business incorporation will entail extra requirements to meet without benefits to enjoy, so make this step reasonably.

GmbH

Company incorporation in Switzerland requires one important condition to be fulfilled: the management structure should consist of several participants and managers, and one of them must be ordinarily resident of Switzerland

The company’s paid-up capital has a lower limit of 20,000 Swiss francs. In the process of company incorporation, the capital is deposited on the account before the constituent documents are submitted. 

The company will be required to submit annual financial statements drawn up in accordance with all the rules of the canton’s jurisdiction. No audit of the statements is required provided that you meet at least 2 of the following conditions: less than 250 employees / assets below 20 million Swiss francs / turnover below 40 million Swiss francs.

The names of the GmbH members are listed in the public register. The legal form incorporation procedure requires the Articles of Association which should include the company’s purpose, business profile, management bodies, as well as information about the company’s founders and shareholders.

If you want more privacy, you can use silent partnerships or participating loans. These are good business instruments that enable investors to invest in an entity without being mentioned in the commercial register.

Joint-Stock Company (AG)

Directors and members of the management team are appointed by the company founder. The director’s position must be held by a resident of Switzerland. The incorporation of this legal form requires an issued capital of 100,000 to 500,000 Swiss francs. Keep in mind that at least 20% of the declared capital must be paid up before incorporation. The company’s financial statements are subject to a mandatory audit.

The authorized bodies should receive an annual report concerning accounting, as well as profit and commodity turnover reports of the Joint-Stock Company. Independent audit is assigned individually. This is the most common legal form in Switzerland for business incorporation as it is suitable for various economic activities, large companies, and transnational corporations.

AG shareholders are not listed in the public register. AG incorporation procedure requires Articles of Association to be drawn up, and they should contain information on the purpose of the legal entity, management bodies, and shareholders. One of AG’s advantages over GmbH is a simple ownership change procedure.

If you struggle with the choice of a legal form for business incorporation, contact our experts who will ask you the right questions.

Foreign Partnership Branch Incorporation

International companies may decide to expand their business into Switzerland by branch incorporation. A branch has separate accounts and operates under the same name, with the parent company being ultimately liable for any debts of the business. 

Here are some details about branch incorporation and operation you may want to know:

  • it is founded by the company’s head office
  • business incorporation is possible with any authorized capital
  • one of the directors should be ordinarily resident of Switzerland
  • business is registered with the authorities of Switzerland
  • branches operate as Swiss companies, keep accounts and pay taxes in Switzerland, but they can take advantage of certain tax relief and double taxation treaties right after incorporation
  • certified copies of the parent company Articles of Association can be used for branch incorporation
  • evidence of the resolution on branch incorporation in Switzerland should be provided
  • the company’s income generated from business activities inside and outside Switzerland is not subject to taxation if the head office is established in a country that is a party to a double taxation agreement with Switzerland

All further details of business incorporation can be clarified with the experts of the International Wealth portal.

Steps Required for Business Incorporation in Switzerland

  • choose a company type that suits best your business needs
  • agree on the name selected for company incorporation
  • determine the company’s location
  • draw up a Memorandum of Association
  • open a bank account (this is a part of business incorporation process, not a separate step)
  • transfer the authorized capital to the account and receive a certificate from the bank that will be produced to complete the business incorporation process
  • register the company with a notary with an entry made in the state register
  • open a permanent business account
  • register the company for VAT

If the investor makes a decision on the incorporation of a GmbH or a Joint-Stock Company in Switzerland, several aspects should be taken into account:

  1. a unique brand name to be used for business incorporation that does not sound similar to an existing company name
  2. a bank account should be opened for future business transactions with the deposited minimum required capital

The company should also submit the Articles of Association to the notary who will confirm the authenticity of the Articles of Association and the Memorandum of Association. If you made a decision on business incorporation in Switzerland and its owner or CEO is a foreign investor, you will need to fill out a stamped Lex Friedrich declaration form that allows foreigners to acquire real estate in Switzerland.

And finally, the company incorporation in Switzerland is completed with the help of our team!

The Swiss Trade Register

The Swiss Trade Register is a business register with details of the registered address of each company. It is called Handelsregister (or HR), and it contains information about all types of companies in Switzerland, their addresses, shareholders, and other information. If an investor needs to know whether a trademark is already in use, he should submit a request to the Federal Commercial Register prior to business incorporation.

Company Registration in the Swiss Trade Register

You will need to gather shareholders for a meeting with a notary for business incorporation in Switzerland. Following this meeting, you will have to fill out an application and submit it to the commercial register in the area of the company’s location and incorporation. Other documents may also be required in addition to the application, such as the Memorandum of Association, a certified copy of the Articles of Association, and the application drawn up by the members of the Board of Directors and auditors. 

In accordance with the business incorporation procedure, all members authorized to act on behalf of the registered company sign an agreement to register the company with the Swiss Trade Register. Upon registration in the Commercial Register, a relevant notice is published in the Swiss Official Trade Gazette, and this is a mandatory step to make for business registration.

How do I Access the Swiss Trade Register?

The local government reserves the right to approve the name of the company seeking incorporation. You will need to obtain permission from the authorities of Switzerland to use the company name for incorporation and further commercial purposes. The procedure is required as a precaution, and it guarantees that all names are unique. You can easily check whether the selected name can be used for your business incorporation by accessing the Swiss Federal Register via the Internet.

Doing Business as an Individual Entrepreneur or Partnership in Switzerland

Entrepreneurs wishing to do business without a legal entity may do so as sole proprietors or as members of a limited or general partnership. Neither option requires any special formalities for incorporation. A legal entity with an annual income of CHF 100,000 or more should be registered in the Swiss Commercial Register.

Partnership Incorporation in Switzerland

In Switzerland, two or more entrepreneurs can join their efforts for business incorporation as a partnership. The partnerships typically consist of entrepreneurs or legal entities that offer similar products. Participants should draw up a partnership agreement and have it notarized. Partnership incorporation is possible with any minimum amount of the authorized capital. Participants are individually liable for debts and obligations of their business in the event of bankruptcy.

This legal form is not a corporate body, which means that incorporation is possible only for natural persons. The partnership (general or limited) must be registered in the Commercial Register of Switzerland.

The purpose of partnership incorporation in Switzerland is to carry out business activities, so it is liable to taxation and VAT registration in Switzerland. The good news is that the tax system applied in this case takes into account the personal income level, so the business partners will be liable for taxation but not the structure itself.

Swiss Trademarks

If your business is connected with intellectual property, you will have to register a Swiss trademark, which is valid for 10 years and can be extended for another 10 years upon expiration. Trademarks used outside Switzerland can be registered worldwide through WIPO headquartered in Geneva.

Despite the fact that the business incorporation in Switzerland is quite straightforward, we recommend that you contact experts who have experience in setting up companies in this country. International Wealth provides clients with assistance in managing processes related to legal requirements, paperwork, and any other issues they may encounter in the process of business incorporation in Switzerland.

In addition to business incorporation in Switzerland, we can help you with specific issues:

Engaging a professional is a good way to easily overcome the bureaucratic and legal hurdles associated with company incorporation in Switzerland. The experts of the International Wealth portal have a proven track record of business incorporation, and our services extend beyond that. Please get in touch with us at [email protected] to get advice and request a quote.

What company types are available for incorporation in Switzerland?

The types of companies available for incorporation in Switzerland include limited liability companies, public joint-stock companies, partnerships, and sole proprietorships.

What are the main steps for company incorporation in Switzerland?

First, investors or entrepreneurs should choose the appropriate form of doing business in Switzerland: a limited liability company, a public joint-stock company, or a partnership. After that, you need to choose a unique company name and open an account with a bank of Switzerland. The company’s documents should also be prepared for registration in the Swiss Trade Register. VAT registration may be required to complete the business incorporation procedure.

What are the tax rates of companies in Switzerland?

Switzerland has three levels of taxation: federal, cantonal and municipal. The national or federal corporate tax rate is 8.5% of net profit. In addition, there is stamp duty, property transfer tax, and property tax. The tax burden on business depends on the canton where it is based.

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