Advantages of company formation in Switzerland

July 24, 2022

Switzerland is among the most preferable hubs for carrying out commercial activity. It features a reliable economy and has one of the best financial systems in the world. Known for its strong pharmaceutical or tourism domains, it has also recently introduced itself as a place for startups in the fields of Fintech or cryptocurrency. Operating a business here necessitates that businesses are duly formed, and adhere to the country’s laws and obligations. In this article, we review the core aspects of company formation in Switzerland and the key perks of operating here.

Overview of the Swiss economy

The Swiss sector of finances takes a high position in the EU and its cross-border trading relationships are also very well established. In fact, Germany is the leading partner for both export and import, while the Netherlands, United Kingdom, Austria, Luxembourg, and France are also great investors when it comes to foreign capital contribution. A reasonable argument for setting up a Swiss entity refers to the fact that this jurisdiction features well-developed infrastructure, with competitive cantons that contribute a lot to a market-oriented climate.

Types of Swiss business forms

Swiss law allows for a number of variants for opening a business. Generally, there are four types:

  • LLC– is formed by at least 2 individuals with a minimum capital of CHF 20,000. The management of the enterprise is set up by the general meeting of holders of shares and senior management.
  • Stock corporation– can be incorporated by three or more shareholders who will bring a share capital of CHF 100,000. The enterprise’s management is set up by the shareholders` general meeting and by a managers` board.
  • Sole tradership– is one of the simplest manners to enter the Swiss market, in which the founder is fully responsible for the company’s obligations. The necessity to register at the Trade Register is obligatory only if the yearly turnover is more than CHF 100,000.
  • General/limited partnerships– A general one can be organized by at least two members. No need to submit a minimum capital but the responsibility of the members on the entity’s debts is unlimited. A limited one is opened by at least one partner who has full responsibility and at least one partner with responsibility only up to his/her contribution to the entity.

Overview of company formation in Switzerland

Initially, opening a Swiss company may seem daunting, but you can use expert advice in this process. Overall, you will have to conduct the following steps:

  • Select the type of business;
  • Select a brandname for the enterprise – it should be unique;
  • Open an account in the local bank;
  • Prepare necessary documentation which includes but is not limited to corporate charter, an overview of planned activities, information on the physical office, Stampa, and Lex Friedrich Declarations Forms.
  • Send the documentation pack to the appropriate authority.

Core benefits of running a Swiss company

Strategic location – Swiss largest trading partner is the EU. 80% of Swiss imports come from the EU and about 60% of its exports go to various EU states. There are many side deals or bilateral contracts with the EU, which remove many barriers to the global market.

Industries with strong potential for growth – aside from the domain of finances which is the most developed here, Switzerland is notorious for healthcare, chemical industries, life sciences, and recently, Fintech and cryptocurrency.

Transparency – Although the country is divided into 26 cantons with varied legal frameworks, all of them ensure a business-friendly setting via the legal side and special tax incentives.

Reasonable taxing – Swiss jurisdiction applies some of the lowest value-added tax rates available at the EU level. The standard rate is only 7,7%. Overall, the Swiss jurisdiction features more than 70 double tax treaties in place, which makes it easier for entrepreneurs to take advantage of lower tax rates.

For detailed information regarding Swiss company formation, please reach out to our lawyers. We are at your service, ready to provide professional assistance.

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