Company formation in Switzerland: The ultimate guide
Company formation in Switzerland requires meticulous planning. To not miss any step and give your business every chance of experiencing good development, here is the essential information to know before you start. Choice of legal form, business plan, market analysis, taxation, insurance, administrative procedures: to open the doors to success, here is what you need to know!
Why start a business in Switzerland?
There are numerous compelling reasons for starting a business in Switzerland. Switzerland is an appealing choice for entrepreneurs due to its stable economy, strong GDP, and central location in Europe, which opens up numerous commercial opportunities. The advantageous tax system allows some companies to enjoy exemptions for up to 10 years. The country supports technological development and innovation with its advanced IT infrastructure. Additionally, while salaries are high, overall labor costs are comparatively low due to minimal indirect costs and social insurance expenses.
Numerous organizations, including NewCo, provide support to individuals looking to start a company in Switzerland, ensuring a smooth launch of their activities.
Who can start a business in Switzerland?
Any person over 18 years old can set up a business in Switzerland. If you are not a Swiss national, you can start a business if you have the right of residence and work in Switzerland.
If you want to open an AG/SA or a GmbH/Sàrl in Switzerland and live abroad, at least one director authorized to sign must be domiciled in Switzerland. A local nominee director can fulfill this obligation.
The 3 main legal forms in Switzerland
To incorporate a company in Switzerland, you must select from several legal forms. Each of them is adapted to a particular type of project and has advantages and disadvantages. Let's look at each of the legal structures available to you.
1. The Swiss Limited Liability Company
The Limited Liability Company, known as GmbH in German and Sàrl in French, is a common choice for company incorporation in Switzerland. Therefore, if you plan to open a family business or an SME, the LLC can support your project and offers many advantages.
Advantages of the Swiss LLC
The GmbH/Sàrl does not impose personal liability for the debts: the liability is only guaranteed by the assets and the share capital or the shares of the company;
A low share capital: creating a GmbH/Sàrl requires a relatively low initial investment capital of CHF 20'000.-;
When creating a GmbH/Sàrl, you can freely choose the company's name, unlike a sole proprietorship, which requires you to mention your name.
Conditions for creating an LLC
The creation of a GmbH/Sàrl requires a capital of CHF 20'000.-. Also, note that the minimum value of a share is CHF 0.01. In addition, to create this type of legal form, it is required that at least one director resides in Switzerland. Finally, the name of the company you create must be distinguishable from any other company name in Switzerland. You can check the availability of the name with our tool. The choice of this company name is free, but you must add the indication of the legal form, here GmbH or Sàrl.
2. The Swiss Limited Company
The Limited Company (Aktiengesellschaft or AG in German / Société Anonyme or SA in French) can be created by one or more natural or legal persons. It is one of Switzerland's most famous legal forms, which convinces with its reliability. Let's take a look at the advantages of AG/SA.
Advantages of the Swiss LTD
It does not require personal liability: just as with the GmbH/Sàrl, the shareholders are only liable for their share of the share capital;
Thanks to the AG/SA, the anonymity of the shareholders is preserved;
The AG/SA may freely prescribe the transfer of shares. There is no restriction linked to the legal or statutory transferability of this type of legal form.
Conditions for creating an LTD
To create an AG/SA, several conditions are required: first, it is essential to note that a capital of CHF 100'000.- is necessary to create this legal form. An amount that can hold back some entrepreneurs. In addition, the minimum value of a share is CHF 0.01.
In addition, to create an AG/SA, it is also required that at least one director resides in Switzerland. Finally, in the context of creating an AG/SA, the company's name must be clearly distinguished from any other company name in Switzerland.
3. The sole proprietorship
The sole proprietorship ("Einzelunternehmen" in German / "Raison individuelle" in French) is the second most common legal form in Switzerland. It is recommended when a single natural person carries out commercial activity. The liberal professions, artisans, consultants, architects, doctors, and traders often use this legal form, since they exercise their activity alone.
Advantages of the sole proprietorship
The creation of a sole proprietorship requires few formalities. Only registration in the Commercial Register is necessary when the company is operated in commercial form, and the annual income exceeds CHF 100'000.-. It will suffice for the entrepreneur to notify the social organizations (AHV/AVS, accident insurance, etc.) of his project;
To create a sole prop, no minimum capital is required, unlike AG/SA and GmbH/Sàrl;
Sole proprietorships do not have to face the double taxation contrary to AG/SA and GmbH/Sàrl.
Conditions for creating a sole proprietorship
To create a sole proprietorship, you are not entirely free to choose your company name. However, you are indeed required to mention your last name.
In addition, to create this legal form, you must register with the OASI (AHV/AVS) and must have a work permit.
Procedure for setting up a business in Switzerland
To start your business in Switzerland, several steps are necessary: to set up your business calmly and efficiently, here are the essential steps.
Find a business name: If you have a sole prop, your name should be in your business name. If you have an AG/SA or a GmbH/Sàrl, you are free to choose your company name. When you have found it, check that the chosen name is not already exploited, and register your domain name to create a website that will carry your brand;
Choose the legal form: this choice will depend on your initial capital, the anonymity you wish to take advantage of, the level of responsibility you want to assume, but also the reputation you want to give to your company;
Choose the canton where your company's head office will be located: here, check the taxation in force in the canton you are targeting. But also pay attention to its geographical location, its proximity to your suppliers, your customers, and its commercial interest;
Open a consignment account: if you launch a GmbH/Sàrl or AG/SA, you will have to open an account on which you deposit the capital necessary to create your company. This is a transitory account: the funds in it will be released and transferred to the company's current account as soon as you have registered with the Commercial Register;
Prepare the constitutive documents: to create a GmbH/Sàrl or an AG/SA, you must draft your constitutive documents and articles of association, which must contain much information (legal form, company name, head office, amount of share capital or capital, purpose of the company, associates, shareholders, signature rights, powers of the members, conditions for holding general meetings, appointment of directors, appointment of the auditor, etc.). To ensure that these documents contain all the essential information, you can delegate their creation to dedicated companies, such as NewCo: the company drafts the legal documents you need for you in just 24 hours. This saves precious time;
Register the company in the Commercial Register: this step is mandatory if you want to form a Limited Liability Company (GmbH/Sàrl) or a Limited Company (AG/SA).
Costs of creating a business in Switzerland
There are several costs to consider when setting up your business. These costs strongly depend on the legal form and the related services.
If you're considering starting a company in Switzerland and want to establish a Limited Liability Company (GmbH/Sàrl) or a Limited Company (AG/SA), NewCo offers a comprehensive package for CHF 490.-, including legal advice and notarization.
In addition, you will also need to include the cost of registering with the Commercial Register, which is approximately CHF 520.-, as well as bank costs, which will be approximately CHF 250.-.
If you wish to create a sole proprietorship, NewCo can support you with its services from CHF 190.-. The costs to be allocated to the Commercial Register will amount to approximately CHF 150.-.
Timeframe for setting up a business in Switzerland
The process of company registration in Switzerland typically takes 2 to 3 weeks. To save time, you can choose to delegate the preparation of the constitutive documents and articles of association to a dedicated company: thanks to NewCo, the preparation of these documents takes a maximum of 24 hours. The partner notaries then send the documents to the Commercial Register within 48 hours: enough to save precious time to set up your business quickly and efficiently.
The opening of the deposit account with a bank and the transmission of the certificate takes about a week if the payment of the capital is made immediately.
Registration in the Commercial Register takes approximately 1 to 2 weeks, depending on the canton you are applying for.
Things to know before starting a business
Official documents are not the only ones to support you in building your business. To make the best decisions and keep your company towards the growth you dream of; several documents must also be produced: the business plan and the market study.
Market analysis is the work of collecting and analyzing essential information for your business. It helps you understand the needs of your market so that you can meet them accurately. Thanks to this crucial document, you reduce the risk of failure and offer a helpful product or service that meets a real customer's needs.
Furthermore, the analysis also helps you reassure the financial partners by proving that your project meets a real need and that your activity has every chance of being sustainable.
Market analysis gathers information such as:
The history of the market, its evolutions;
The actors who form the competitive territory, their strengths and their weaknesses;
Information on the target: buying behavior, habits and motivations;
The business plan is also a critical document when creating your business. It helps you understand whether your project can be profitable by combining several information:
The area of the activity;
Markets and customers;
The marketing strategy;
The characteristics of your product or service;
Direct and indirect competitors;
Prices, manufacturing costs;
Expenses, such as human resources, equipment, rent, etc.
Thanks to this crucial information, you will make financial forecasts over 3 or 5 years. This is what will make it easier for you to find investors, thanks to a viable and promising project.
Things to know after the creation of a company
When your company is created, you must carry out administrative formalities that protect your workers. You must register with the OASI (AHV/AVS) and with a pension fund (BVG/LPP).
You will also need to take out accident insurance. All salaried workers employed in Switzerland must be insured against accidents at work and occupational diseases. And to ensure that your business is well covered, you should also consider loss of earnings insurance.
Finally, companies with their headquarters in Switzerland will have to register for VAT. Note that the registration of a company for VAT is only compulsory from an annual turnover of CHF 100'000.-.
Frequently Asked Questions (FAQs)
How much does it cost to set up a company in Switzerland?
Setting up a company in Switzerland involves various costs, depending on the legal structure chosen. For instance, creating a Limited Liability Company (GmbH/Sàrl) through NewCo costs CHF 490.-, inclusive of legal advice and notarization. Additional costs include registration with the Commercial Register and bank fees.
Can a foreigner set up a company in Switzerland?
Yes, foreigners can start a business in Switzerland. If you're not a Swiss national, you can establish a business if you have the right of residence and work in the country. If you live abroad, you will need to appoint a director with residence in Switzerland, who will have individual signing rights.
How do I set up a Swiss company?
To set up a company in Switzerland, you need to choose a legal structure, find a unique company name, select the canton for your head office, appoint directors, open a bank account, and register with the Commercial Register. NewCo can guide you through these steps and ensure a smooth company registration in Switzerland.
What is the structure of a company in Switzerland?
Swiss companies can take several legal forms, such as a Limited Liability Company (GmbH/Sàrl), a Limited Company (AG/SA), or a sole proprietorship. Each structure has its own requirements and benefits.
What is the minimum capital for a company in Switzerland?
The minimum capital for a GmbH/Sàrl is CHF 20'000.-, while an AG/SA requires a minimum capital of CHF 100'000.-. Sole proprietorships do not require any minimum capital.
How much is company tax in Switzerland?
Company tax in Switzerland is levied at the federal, cantonal, and municipal levels. Some companies may also benefit from partial or total tax exemptions for a maximum period of 10 years.
How much does it cost to start an LLC in Switzerland?
Starting an LLC (GmbH/Sàrl) in Switzerland through NewCo costs CHF 490.-, which includes legal advice and notarization. Additional costs include registration and bank fees.
Is it easy to start a company in Switzerland?
Yes, with comprehensive guidance and support from NewCo, starting a company in Switzerland can be a seamless process. From company formation to obtaining a certificate of incorporation in Switzerland, we are here to assist you.
Find a company name
Choose the legal form
Choose the canton of the head office
Appoint the directors
Open a bank account
Register the company in the Commercial Register
Register the company for compulsory insurance
Register the company for VAT
When starting a business in Switzerland, there are numerous steps to follow. Creation of your market analysis, your business plan, implementation of your commercial and marketing strategy, choice of your company name, design of your website, your social networks: the points on which you dwell are numerous. However, to focus solely on your strategy and give your business every chance to grow, entrust the administrative procedures to dedicated companies.
For all queries related to company formation in Switzerland, NewCo is here to provide expert advice and support. This online service has already supported thousands of entrepreneurs in Switzerland! Why not you?