Setting up your company in Switzerland: the 5 essential steps
You're there: you have decided to start your own business. But you still have a lot of questions, which is quite alright: there are many things to know before you start, and it can be difficult to think of everything.
Choice of status, business plan, market analysis, marketing strategy... Often, when you decide to start your own business, you are overwhelmed and don't know where to start. So, to do it right, here is our guide to the essential things to know to launch yourself methodically and efficiently into the adventure of entrepreneurship!
1st step: Choosing the legal form
Depending on the activity you have decided to engage in, there are two paths open to you. The four types of legal forms most frequently used for setting up a business in Switzerland are:
The Sole Proprietorship: made up of one person, it does not require minimum capital and requires registration in the commercial register if the turnover exceeds CHF 100'000.-. However, you must register with the OASI (AVS/AHV) to obtain your self-employed status.
General partnership: Composed of two or more natural persons, this legal status does not require minimum capital. You must, however, register your company in the commercial register.
The Limited Liability Company (LLC): It is made up of one or more natural or legal persons. It is formed at a constituent meeting before a notary. You must also make an entry in the commercial register and have a minimum capital of CHF 20'000.- to create it.
The Limited Company (LTD): It is made up of one or more natural or legal persons, and the minimum capital required to create it is CHF 100'000.-. It is taxed on the profits and dividends of the shareholders. This type of company is also created at a constituent meeting with a notary and requires registration into the commercial register.
In short, to make the right choice, analyze all the advantages and disadvantages and remember one thing: there is no such thing as a bad legal status. It simply has to fit your plans!
Step 2: Drawing up a business plan
The business plan is actually the development plan of your company.
It will help you project yourself to understand whether or not the activity you wish to develop is feasible.
It also helps you to evaluate the viability of your project through the study of several aspects.
It is organized into several parts:
The descriptive part will allow you to gather the information you will have collected during your market analysis.
The business model. It will also allow you to explain what you plan to apply by talking about market opportunities, needs and demand, and your solution's benefit.
Then, present your team, its skills, and the path you want to follow.
Then, describe your products, services, and the competition around you.
A financial section with figures will transcribe your analyses by estimating the possible financing needs.
Thanks to this, you will then be able to define your competitive advantages and your marketing strategy precisely.
In preparing your business plan, be careful not to be too optimistic. You should not underestimate how long it will take to launch your business.
Similarly, do not underestimate specific expenses, and do not overestimate particular sources of income.
The good trick is to plan for different scenarios to be ready, no matter what happens.
To carry out your business plan, use computer tools designed for this purpose.
The challenge here is to be as precise as possible, leaving out no details.
Everything must be taken into account: salaries, social insurance, maintenance costs, communication and marketing budget, rent for the business premises, taxes, interest, etc.
In short, be exhaustive, and above all, realistic, and do not hesitate to call on professionals to have your business plan drawn up or checked!
Step 3: The foundation of your company
If you wish to become self-employed, you will need to fill out an affiliation form, which you can find on the compensation fund's website. You will have to provide supporting documents such as copies of invoices already drawn up, agreements concluded, offers made, your letterhead, the lease of your rent, or Liability insurance.
Check the availability of the company name you wish to establish.
Deposit the capital with a bank in a consignment account. For a LTD, the minimum capital amount is CHF 100'000.-. For a LLC, the share capital is CHF 20'000.-. Then, through a certificate, the bank will certify that the capital has been paid in.
The founder(s) of the company sign(s) the deed with a notary. They declare that they are founding a Limited Company or a LLC and agree on the text of the articles of association they have chosen.
For a LTD, it is also essential to appoint the board of directors as well as the auditors. However, with all shareholders' agreements, the company can waive the requirement for a limited audit if it has no more than 10 full-time employees: this is known as an Opting-Out.
For a limited liability company (LLC), it is necessary to appoint the managing partner or the managing director as well as the auditor. As with a LTD, it is possible to carry out an opting-out.
You must then register within the Commercial register. To do so, the director(s) affix their signature(s) to the application for registration, which will be sent to the Commercial register. It is indeed thanks to this registration in the Commercial register that your company will acquire legal personality.
As soon as the extract from the Commercial register is received, the company has its paid-up capital at its disposal and can use it immediately for the payment of rent, salaries, charges, etc.
To complete these 5 steps without any problems, let NewCo guide you! In the beginning, all you have to do is fill in an interactive form from your home in a few minutes to explain your project. You will then have access to a dashboard where you will be fully guided through the steps to be taken. In 7 days, your company will be formed, without any hassle and above all, without any false administrative notes.
4th step: Taking out insurance for the employees and the company
When building your business, you will need to appeal to and choose social and business insurance to ensure your employees and your business
You will be asked to choose and register as an employer with a compensation fund (AVS/AHV) with:
a Disability Insurance;
an Earnings Loss Allowance;
an Unemployment Insurance.
You will then have to register all your employees and also yourself if you are a manager.
If salaries exceed the annual amount of CHF 21'150.-, you will be obliged to register your employees with a 2nd pillar pension fund (BVG/LPP).
If your employees work less than 8 hours a week, you will only have to subscribe to the Federal Law on Occupational Accidents (UVG/LAA).
However, if their working hours are equal to or greater than 8 hours per week, you will have to take out a UVG/LAA for occupational and non-occupational accidents.
You will also have to take out several insurances for your company:
Daily allowance insurance in case of illness;
Property insurance (fire, theft, water damage, glass breakage);
The objective? To protect you at all costs from the slightest unforeseen event so that your business is not jeopardized or in trouble!
5th step: Bookkeeping
If there's one area that often scares entrepreneurs, it's accounting!
However, bookkeeping is a legal obligation and a must for your management.
Accounting rules and procedures are essential for monitoring and measuring the growth and economic results of your business.
And indeed, clear accounting allows you to manage your business correctly.
It helps you make the most judicious choices, according to the economic situation, because the slightest decision you make must be based on real facts and genuine figures.
Accounting information must be perfectly established because the stakes are high.
If you are not comfortable with numbers, you must surround yourself with professionals from the outset. They will help you draw up budgets, follow your expenses' evolution, and balance your results to make your business sustainable.
However, please note: that if your company has a turnover of more than CHF 100'000.- per year, you must declare yourself to the VAT authorities and draw up quarterly or half-yearly accounts.
Furthermore, as soon as you start your activity, remember to keep all the invoices, even if they are made shortly before the formation of the company.
You will find it is essential to keep regular bookkeeping throughout the year: each year, you will have to close the accounts, and prepare a balance sheet and a profit and loss statement. No information should be omitted or left to chance. Always keep in mind that accuracy is your watchword! It should also be noted that limited companies will have to draw up an accounting appendix to complete the P&L. Finally, once you have completed this closing, you must file your tax return.
True, there are many accounting formalities. And even if there is a lot of information to remember, you will see that you are not alone in managing everything. You can easily turn to turnkey solutions that help you with this management, allowing you to relieve yourself of certain burdens and devote more time to your business!
You got it! To form your company, it is essential to get to grips with a few crucial points. But be careful not to see these various steps as constraints! On the contrary, they help you see clearly and refine the details of your project. In this way, you will be able to set up a business that suits you and has a real chance of success in the long term.