Business entities in Switzerland
Since 2003, Healy Consultants assists our Clients to set up their company in Switzerland and advise them regarding the optimum corporate structure for their business needs. There are several business entities available in Switzerland, the most commonly used being the limited liability company. Apart from Switzerland company setup, foreign corporates can also choose to register a branch or a representative in Switzerland.
The Switzerland limited liability company (GmbH)
- Our Clients can setup a limited liability company in Switzerland with only i) one shareholder ii) CHF20,000 of share capital, which must be fully paid-up at incorporation and iii) one director;
- At least one director must be ordinarily residing in Switzerland. If needed, Healy Consultants can assist our Clients to find a professional, passive nominee director to comply with this requirement;
- If the share capital requirement presents too large of an investment, our Clients can opt to establish a branch instead (see below);
- Switzerland is a civil law country, so all companies are set up by notarial deed. Thereafter, companies are registered in the Commercial Register;
- Because of this system, Swiss companies do not have certificates of incorporation. Instead, the trade registry extract is used to show all important company information;
- Foreign businesses seeking to establish a Swiss subsidiary must legalise or apostille their documentation before submission to the Commercial Register;
- Swiss corporate documents are in either German, French or Italian, depending on the Canton in which the company is incorporated;
- A Swiss company’s constitution, or governing document, is known as its “statutes”;
- According to its place of incorporation, Switzerland companies will be subject to different corporate tax rates, varying between 12.5% (Canton of Luzerne) and 25% (Geneva). Financial statements must be audited if the company exceeds two of the three following thresholds: i) assets over CHF20 million ii) annual income over CHF40 million and iii) over 250 employees.
The Switzerland public limited company (A.G.)
- This Switzerland business entity is used for opening for medium and large companies which can either be private or publicly listed. A Switzerland public limited company can be incorporated by one shareholder, who must however i) contribute at a minimum of US$107,000 (CHF100,000, with either 20% or CHF50,000 paid-up at incorporation) and appoint ii) at least three directors, including one ordinarily resident in Switzerland and iii) one auditor registered in Switzerland;
- All public limited companies registered in Switzerland have to submit annual audited financial statements.
The Switzerland holding company (Holding)
- A holding company in Switzerland is only allowed to hold and transfer shares of other Swiss and foreign companies. It cannot conduct commercial and productive operations. Incorporation requirements are similar to those of a standard limited liability entity (or public limited liability if such business entity is chosen to form the holding company);
- Switzerland holding companies benefit from exemption from corporate tax levied at the communal and canton levels, provided i) equity investments of the holding company represent over 66% of its total assets or ii) the income generated by such investments represent over 66% of the company’s annual income. Dividends received from subsidiaries are also exempt from federal income tax, if the investment of the holding company represents either over i) US$1.1 million (CHF 1 million) or ii) over 10% of the total capital of the companies distributing dividends;
- Companies not eligible as holding companies can still apply for i) domiciliary status if they do not run any commercial and productive operations in Switzerland or ii) auxiliary/mixed status if less than 20% of their sales are sourced from Swizterland. After Switzerland business setup, they usually can receive partial exemption from corporate tax, at a level varying according to the Canton of incorporation.
The Branch Office
- The Swiss Company Law stipulates that a branch office can be 100% foreign owned;
- Remaining part of the parent company, the branch is not autonomous. Consequently, the management and scope of operations will be defined by the parent company;
- A key benefit of using a branch in Switzerland is avoiding the need for CHF20,000 of share capital;
- A Swiss branch is a straightforward way to establish a physical business presence in Switzerland to serve local customers;
- Using a branch allows for easier consolidation of our Clients’ international business accounts;
- There are no withholding taxes on branch profits sent abroad. Instead, the branch pays corporate tax at the local rate on its Swiss income. This is advantageous when compared to using a company, which may pay dividend withholding tax;
- Unlike a company, a Swiss branch is not registered with the assistance of a notary;
- Swiss branches of foreign companies require a resident branch manager living in Switzerland, just as Swiss companies require a resident director; and
- All parent company documentation must be legalised and translated into the language of the Canton in which the branch is registered (either German, French or Italian).
The Representative office (bureau de liaison)
While the representative office can be 100% foreign owned, it is not allowed to pursue production-related or commercial activities. Please note that the representative office is required to get its account audited and that compliance requirements are similar to those of a branch, including the need to appoint one resident representative.
Switzerland turnkey company
- Healy Consultants expert global solutions team is happy to assist our international entrepreneurs looking for quick and cost-efficient solutions in Switzerland a complete turnkey solution including:
- A Swiss ready-made GmbH and pre-registered corporate tax number;
- Corporate bank account already approved;
- Legal registered Switzerland address.
- With this strategy, Healy Consultants can efficiently supply to our Client within a week i) an existing dormant company and tax registration number and ii) an already approved corporate bank account number with a reputable international bank and iii) a registered business address;
- Unfortunately, the alternative is to set up a new Switzerland company and corporate bank account, which takes one month. Some of our Clients purchase Swiss turnkey solutions if they i) want a company registration number fast ii) require a corporate bank account number to immediately receive sales income and iii) to immediately close an important deal.
Table of Comparison between Switzerland business entities
|Also known as:||GmbH||A.G.||Holding||Succursale||Bureau de liaison|
|How long to set the company up?||3 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Wholly foreign owned?||Yes||Yes||Yes||Yes||Yes|
|Minimum share capital?||US$21,500||US$107,000||US$21,500||N/A||N/A|
|File annual tax return?||Yes||Yes||Yes||Yes||Yes|
|Corporate bank account?||Citibank||Standard Chartered||Barclays||HSBC||BNP Paribas|
|Does our Client need to travel?||No||No||No||No||No|
|Resident director/representative required?||Yes||Yes||Yes||Yes||Yes|
|Minimum directors/representatives required?||1||3||1||1||1|
|Company secretary required?||No||No||No||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes||Yes|
|Corporate tax rate at the federal level?||8.50%||8.50%||8.50%||8.50%||0%|
|Corporate tax rate at the canton level?||Variable||Variable||Variable||Variable||Variable|
|Total effective corporate tax rate?||See this link||See this link||See this link||See this link||See this link|
|Annual financial statements required?||Yes||Yes||Yes||Yes||Yes|
|Statutory audit always required?||No||Yes||Yes||Yes||Yes|
|Allowed to issue sales invoices in Switzerland?||Yes||Yes||No||Yes||No|
|Allowed to sign contracts with Switzerland entities?||Yes||Yes||Yes||Yes||Yes|
|Allowed to import and export goods?||Yes||Yes||No||Yes||No|
|Can rent an office in Switzerland?||Yes||Yes||Yes||Yes||Yes|
|Can buy Switzerland property?||Yes||Yes||Yes||Yes||No|
|Can own equity in other Switzerland companies?||Yes||Yes||Yes||Yes||No|
|Total Switzerland business setup costs in Yr. 1||€18,650||€21,640||€20,300|
|Subsequent annual costs (excl. accounting and tax fee)||€3,500||€10,900||€9,900|
|Sample engagement fee invoice|
Frequently asked questions
Do I need local shareholders for Switzerland business setup?No. Our Clients can setup a business in Switzerland that is fully foreign owned. A Swiss LLC can be setup with only 1 shareholder and 1 director. The director however, must be resident in Switzerland.
Will I have to travel to start a Switzerland business?No. Healy Consultants can provide Switzerland business setup services without our Client having to travel to Switzerland.