Since 2003, Healy Consultants Group’s expert incorporation team has successfully assisted our Clients in starting their business in many Switzerland Cantons. By supplying complete one-stop-shop solutions in Switzerland, our Clients enjoy non-travel business support services from A to Z.

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Switzerland business setup summary

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• Benefits and problems

  Benefits of Switzerland company registration

  1. Switzerland is a great place to form a holding company, because:
     • A holding company registered in Switzerland can benefit from exemption on communal corporate tax if: i) the company’s operations only consist of managing long-term investments, or ii) equity investments of the holding company represent over 66% of its total assets, or iii) the income generated by such investments represent over 66% of the company’s annual income;
     • Dividends received from both resident and non-resident subsidiaries can be further exempt from federal income tax, provided that the investment represents either over i) CHF1 million or ii) 10% of the total capital of the companies distributing dividends;
     • Sales of shares are also exempt from capital gains tax, provided that such shares i) have been held for more than one year and ii) represent over 10% of the total share capital of the subsidiary;
     • Withholding tax on dividend distributions can be fully tax-exempt when i) the parent company holds at least 25% of the Swiss subsidiary and ii) has held this minimum percent for at least two years;
     • Swiss companies can also qualify for “domiciliary company status” allowing them to benefit from reduced corporate tax rates of up to 8.5%, provided over 80% of their sales and costs are generated outside of the country;
     • Our Clients forming a holding company in Switzerland will also enjoy benefits granted by the EU’s parent company directive, waiving withholding tax on dividends received from EU subsidiaries. They will also benefit from the country’s 100+ double taxation avoidance agreements.
  2. Switzerland is a low tax country in Europe, because:
     • Total effective corporate tax rate paid by a Swiss (non-holding) company can get as low as 11.9%;
     • According to the place of registration, local companies are subject to corporate tax paid i) to the federal authorities at a uniform 8.5% and ii) at the cantonal and communal levels, at variable rates which are at their lowest in the Cantons of i) Lucerne ii) Zug iii) Obwalden and iv) Nidwalden;
     • Switzerland has the lowest VAT rate (7.7%) in Europe. Companies are not required to register for VAT, if their annual turnover is below CHF100,000;
     • Employers’ social contributions represent approximately 5.5% of their employees’ gross salaries, one of the lowest proportions within most European countries;
     • On federal lever, there is no inheritance tax. In most cantons, immediate descendants are fully exempt from any inheritance tax;
     • There is no withholding taxation on interest paid to a non-resident from any nationality.
  3. Switzerland has a very business oriented government, because:
     • Doing business in Switzerland’s structurally weak regions of can enjoy 50% to 100% tax rebates on both federal and cantonal level. For example, a pharmaceutical firm setting up in the Berne canton will be granted a tax fee status for 10 years;
     • If certain conditions are met, a newly registered business in Switzerland can receive loans from the government worth US$1.03 million;
     • Government programs like the Blue Lion Initiative and Technopark offer new firms a chance to showcase their business ideas before experts in related fields and get free expert advice;
     • The Swiss government and specific Cantons will supply additional grants ranging from CHF 5,000 and CHF 10,000 to employers with more than 30 staff in their Canton;
     • Switzerland is one of the few crypto-friendly countries in Europe, and preferred country to register a new blockchain and ICO company.
  4. Switzerland is the best European distribution center, because:
     • Switzerland has the world’s 4^th highest rated infrastructure including high quality airports, rail and road services which facilitate easy transfer of goods;
     • The Swiss-EU-Free Trade Agreements (FTAs) offers the following benefits to Switzerland resident companies: i) duty-free trade of goods/services ii) free movement of capital and labor and iii) easy access to an integrated European consumer base of 500 million;
     • Switzerland operates free zones and bonded warehouses in i) Geneva ii) Zurich iii) Basel and iv) Chiasso. Foreign goods can be stored there without incurring duties for an unlimited time period.
  5. Business registration in Switzerland is ideal for R&D & high value-added manufacturing operations, because:
     • Switzerland-based businesses can also rely on excellent research infrastructure, ranked as the best in the world by the World Economic Forum;
     • There are multiple bank guarantees available new R&D companies up to CHF 500,000 which can be underwritten up to 65% of the debt exposure by the Switzerland government;
     • Switzerland boasts the one of the world’s most skilled labour force with i) 80% of the population holding a university or equivalent degree ii) the world’s best trained workers and iii) the 12^th most productive workforce in the world, with an average productivity of US$60 per hour.
  6. Switzerland is an ideal jurisdiction for companies belonging to the financial services sector because it is an important financial hub in the European Union as well as globally:
     • Geneva is the prime financial centre of Switzerland and has 260 banks (out of which 44% are foreign-owned), 200 insurance companies and 1,800 pension funds;
     • Further, Zurich and Geneva are the world’s 9^th most and 27^th most important financial centres respectively, as per 2018 Global Financial Centers Index;
     • The nation’s strong currency (Swiss Franc) along with its efficient financial infrastructure allows foreign investors to handle their assets and associated risks efficiently.

  Problems with Switzerland company registration

  1. At least one director of the company must be a Swiss citizen or a Swiss resident. If needed, Healy Consultants can assist our Clients to find a resident director in Switzerland, who will play no active role in the management decision making;
  2. Starting a company in Switzerland is expensive, because:
     • Minimum paid up share capital for an LLC is CHF20,000, paid before company formation;
     • Annual government renewal fees for incorporation are €1,850;
     • Purchasing employee health insurance is mandatory, increasing labor costs as Swiss insurance costs are the 3^rd highest in the world;
     • A Switzerland resident firm with more than 10 full-time annual employees must get its financial statements audited;
     • The country has one of the highest average wage rates in Europe. As a result, it is considerably expensive for foreign employers to hire skilled employees in Switzerland.
  3. It is difficult for non-EU citizens to secure residence visas following Switzerland business registration, because:
     • Only EU citizens can obtain a Switzerland entrepreneur work visa for self-employment. For instance, a USA citizen must have lived and worked in Switzerland for 5 years before he/she could be self-employed;
     • Non-EU nationals are granted employment visas based on a quota system for their country. Entry will also be based on the worker’s qualifications.

• Best uses for a Switzerland company

  1. Switzerland enjoys highly tax-efficient, yet reputable holding company regime, perfect for global parent vehicles and IP holding companies;
  2. Multiple government grants and abundant high-quality employees help Switzerland position itself as preferred R&D hub in Central Europe.