One of the first decisions you need to make is what legal structure you want for your business. Your choice will depend on many factors, including the number of business partners you have, the amount of risk and liability you are willing to take on, and how much capital you have to invest.
The different types of legal structures available in Switzerland are set forth in the Swiss Code of Obligations. In general there are two types of companies: unincorporated companies (sole proprietorships and general partnerships) and incorporated companies (limited liability companies and corporations). Unincorporated companies are inseparable from their founders; the founders are the company, and the founders’ assets are inseparable from those of the company. Incorporated companies have their own legal personality; their assets are completely separate from those of the owners.
The legal structure you decide on will determine the steps you need to take to register the company, as well as the tax and accounting procedures you will have to follow. So it’s important to get familiar with the different types of structures available so you can make the right decision. The following table compares the main features of each one:
choix-forme-juridique.pdf (in french) (864.7 kB)
You will have to go through various administrative steps to create your company, such as requesting any necessary permits, selecting a name, and protecting your intellectual property.
Some types of businesses are regulated in Switzerland and require a special permit or that you hold specific academic credentials. Check with the cantonal police office covering commercial activities (the Office de la police cantonale du commerce) to see if there any such requirements for your business.
Portal of authorizations and regulated professions in Switzerland at the federal, cantonal and communal levels: www.autorisations.admin.ch.
There are some legal rules you have to follow when selecting a name for your company. For example, the name cannot contain any false information or be misleading as to what kind of business you perform. If you set up a sole proprietorship, your last name must be part of the company name. And if you set up an incorporated company, the name must indicate whether it is a limited liability company or a corporation.
If your business will be registered in the Swiss commercial register, you can do a search of the register to check whether another company is already using the name you want. Once you have settled on a name, the commercial registrar will have to approve it.
Database of company names already in use: www.zefix.ch.
If your business is based on an original idea, you will want to make sure that nobody copies it. Switzerland has passed a series of laws to protect intellectual property such as a patent, trademark, design or copyright.
You can also take advantage of legal protection for your company name and logo, or a process or model. The Swiss Federal Institute for Intellectual Property and the World Intellectual Property Organization are a good starting point.
When selecting a site for your company, there are two things to keep in mind. First, the size and capacity you need (like surface area, volume, height, and bearable weight), and second, specific criteria related to your business (like tax rates, labor pool, equipment suppliers, infrastructure, and transportation links).
Before embarking on the long and costly process of purchasing, building or renovating your business premises, make sure your plans comply with local zoning laws. Each municipality (commune) has a zoning plan that specifies which plots can be used for what purposes. If your plans don’t comply with the local zoning laws, you can apply to the municipality for a variance.
The process for formalizing your company’s founding will depend on the legal structure you choose. Sole proprietorships typically just need to sign up with a social security fund. The process for setting up a limited liability company (société à responsabilité limitée) or corporation (société anonyme) is more complicated and requires a notary.
Sole proprietorships are not required to register with the local commercial register unless their full-year revenue exceeds CHF 100,000. But it is usually a good idea to register so that your business activities are on record. Business registries are in the public domain and protect the names of the companies registered with them. Since they let anyone view the full details about a company and are a reliable source of information, some organizations require that the businesses they work with be registered. Banks also require companies to be registered in order to qualify for a business loan.
If you decide to create a limited liability company or a corporation, you will need to:
Limited liability companies must, upon creation, issue shares worth at least their par value (minimum CHF 20,000). Corporations must be created with capital of at least CHF 100,000, of which at least 20% (minimum CHF 50,000) is actually paid in.
Set-up fees for a new business include:
Beware of private commercial registers! These registries are not official. The law recognizes only each canton’s official commercial register. Registration with any other commercial register is optional. Be sure it’s worth the cost before accepting any of these offers.
Sole proprietors pay taxes on income from their business and on their total assets, including any capital invested in the sole proprietorship. Limited liability companies and corporations are taxed as individual entities separate from their owners and managers.
As an entrepreneur in Switzerland, you will have to pay value added tax (VAT) to the federal government. But you can recover any VAT that you pay to other businesses, such as when you purchase supplies and services. The purpose of VAT is to tax end consumption. There are four VAT rate categories depending on the type of product or service:
Even if your new company doesn’t reach CHF 100,000 of revenues during the start-up period and subsequent years, you may want to register for VAT voluntarily if you plan to spend a lot of money to build your premises and purchase capital equipment. That will let you deduct the entire amount of the VAT you pay on those expenses.
By the same token, if your company carries out some activities that are excluded from VAT (such as organizing cultural events or leasing property to taxpayers), you may want to voluntarily register those activities for VAT so that you can deduct the VAT on your business expenses.
If you register your company with the local commercial register, then you will have to keep a set of books. That will involve preparing an inventory and balance sheet when you first start out, and then preparing an inventory, balance sheet and income statement at the end of each fiscal year.
The purpose of this bookkeeping is to enhance transparency and provide information on your company’s financial position and earnings.
The income statement lists your income and expenses over a given period, while the balance sheet lists your current assets, fixed assets, liabilities, and equity at a given date. They must be prepared in accordance with the accounting rules in the Swiss Code of Obligations.
Those rules are based on the following accounting principles:
For more information, see Tools > Accounting
Limited liability companies and corporations must have their accounts audited. The type of audit (ordinary or limited) depends on the number of employees and total assets the company has.
In Switzerland, tax and accounting services are commonly provided by a fiduciaire (a job title that has no defined qualifications). The same holds true for other accounting job titles - such as comptable, expert-comptable, fiscaliste, and expert fiscal. Be sure the accountant and auditor you use are fully qualified and, preferably, members of their professional organizations.
All businesses must pay Swiss social security contributions, which consist of unemployment insurance, old-age and survivors’ insurance (assurance vieillesse et survivants, AVS), disability insurance (assurance invalidité, AI), loss-of-income insurance (assurance perte de gain, APG), and an occupational pension fund. You may also have to pay family allowances and purchase accident, health, and/or maternity insurance.
If you hire staff, you will have to become familiar with the part of Swiss law applicable to employment contracts.
Once the trial period is over, employees cannot be dismissed under the following circumstances: while carrying out military service (or four weeks before or after); in the event of total or partial inability to work (from 30 to 180 days, depending on the number of years employed); during pregnancy and for 16 weeks after giving birth; or if engaged in foreign assistance on behalf of the federal government.
Vaud Canton offers various forms of financial assistance to companies in the manufacturing industry, manufacturing-related services and high-tech industry. This assistance, provided by the Vaud Office of Economic Promotion and Commerce (Service de la promotion économique et du commerce, or SPECo), is available to start-ups and small and medium-sized businesses in the canton that are seeking to expand.
Several kinds of financial assistance are available: