Company Formation in Switzerland
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Swiss Company Formation
Incorporating Your Business
So you've decided to start a business in Switzerland and researched your market. Now it's time to decide how you will register and set up a business in Switzerland. What is the best, most viable option for your company, your products, and yourself? Which is the path of least resistance?
Here are your typical options when starting a business in Switzerland:
The formation of a corporation requires the following:
- Incorporators: Three persons or entities must act as incorporators and initial shareholders; they need not be Swiss citizens or residents
- Capital: a corporation must have a share capital of at least CHF 100,000
- Articles of Incorporation: This must state the company's name, domicile, purpose, share capital, and the basic organization of the corporation
- Board of Directors: The majority of the members must be Swiss citizens or citizens of a member state of the EU or the EFTA and must be domiciled in Switzerland
- Auditors: The incorporators must appoint one or more auditors. At least one auditor must have its domicile in Switzerland
After an incorporators' meeting has been held, an application for the registration of the corporation must be filed with the Office of the Commercial Register alongside the following documents:
- The notarised deed of incorporation
- A certified copy of the Articles of Incorporation
- Declarations of acceptance from the initial board members and auditors
- A confirmation by a Swiss bank that the initial share capital has been paid in
- A board resolution concerning the constitution of the board of directors
The application must be signed by all the persons authorized to act on behalf of the corporation who have signatory power for the corporation. The corporation becomes a legal entity once it has been registered in the Commercial Register.
Registration in Switzerland is as 6-stage process, which is as follows:
- In the presence of a notary public, draft the articles of association, who will notarise the signatures on the form, and authenticate the articles of association and deed of incorporation. This takes 7 days and costs approximately 0.1% of capital.
- Deposit the capital into a bank account. This takes a day.
- Submit the deed which certifies the articles of association to the local commercial register, which takes 9 days and costs approximately 600 CHF plus 0.02% of capital.
- After receiving an assessment in the mail, pay stamp tax at either the post office or a bank. This takes 1 day and costs approximately 1% of capital.
- Register with the Federal Tax Administration for VAT. This takes one day.
- Register employees with the social insurance system. This takes one day.
The following types of companies are available in Switzerland:
This is the most favoured form of company after a standard corporation or joint-stock company. It is most suited to sole owners of a business, or for other professionals who work in their own name, such as freelancers. There is unlimited liability and the individual's name has to appear in the business. Registration with the Chamber of Commerce is compulsory if yearly sales are in excess of CHF 100,000. Additionally, the sole trader has to be a Swiss resident.
Implemented when two or more people unite to run a business. The name of one of the partners has to appear in the business name of the company. All partners have unlimited liability and registration with the Chamber of Commerce is compulsory. All such partners have to be residents and the company needs to have a national address.
A less common derivative of a General partnership. Some of the partners (general partners) have unlimited liability, whereas others (limited partners) could be liable up to a specified amount. Registration with the Chamber of Commerce is compulsory.
Corporation or joint-stock company (AG/SA)
This is an independent legal entity, and is most common form taken by companies. Liability is limited to the value of the business's assets, and the minimum amount of equity is CHF 100,000. A minimum of three original shareholders is required . The business has a compliance obligation to formal incorporation procedures for which it must pay fees. These include stamp duty and legal advice. Commonly, the registration process takes between two weeks and a month to process, which thereafter the company is a legally acknowledged entity.
Swiss or European citizens residents must constitute the majority of the board. The board members can be individually liable for the payment of Swiss taxes and social security.
Limited liability company (GmbH/Sarl)
A legal entity requiring a minimum shareholders' equity of CHF 20,000. At least one managing director must be a Swiss resident, and the company must have a minimum of two original shareholders. These founders are permitted to perform the duties of governing bodies. Whereas these businesses are less expensive to establish than a limited company, it is more difficult to transfer shares. The incorporation of a Limited Liability Company requires two persons or legal entities acting as incorporators and initial quota holders. Incorporation procedures for LLC's are the same as for corporations.
By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of itsoperations. Offshore companies are traditionally, but not exclusively,incorporated for lower fees and taxes. Business owners must abide theregulations of the offshore jurisdiction, and must not trade within thejurisdiction.
The benefits are vast. As aforesaid, reduced tax and fees are oftenbig factors when considering offshore incorporation. A company may alsochoose and offshore location to:
- Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
- Assume anonymity - the names of owners and directors are not forpublic record, and references to the company may only be made in itsregistered agent
- Ensure legal protection - for instance, some jurisdictions favourcorporate governance, meaning a company is only liable to offshore lawsas opposed to those in its areas of operation
- Protect assets - business owners may opt to arrange their assetsand transactions in such a way that protects them from liability
Characteristics of an offshore company:
- Memorandum and Articles of Association
- Certificate of Incorporation
- Registered Office/Agent
- Shareholders / Members
- Directors / Managers
- Company secretary
- Statutory Register
Traditional locations for offshore incorporation are tax havens,such as the British Virgin Islands, Panama and Monaco. Other favouredareas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus,Seychelles, Marshall islands, Delaware, Turks & Caicos Islands,Hong Kong, Jersey, Guernsey and the Isle of Man.
A legally independent business, but which is affiliated to a foreign parent. It can take the form of a Corporation or of a Limited liability company.
A branch is a legally dependent subsidiary of a head office that operates outside the parent country. At a financial level, however, it operates independently.
The entire incorporation process normally takes approximately two to three weeks from the date of the incorporators' meeting.
Organisations that can assist with Company Formation
Sovereign offers a range of advisory and support services to assist companies of all sizes to establish successful business operations in foreign markets.
We are the Market leader for business start-ups in Switzerland with Extensive Experience and own Experts
Specialists in Swiss Company Formation and Administration