Company Formation in Switzerland

October 26, 2022

There is a plethora of aspects about business opening, each businessperson should be mindful of prior to starting their own venture. Among them – key features of this country, entity organization and basic terms of company formation in Switzerland. Below are the basic details about how to open a company in Zug, Zurich – the most preferable hubs for investors.

General overview

Switzerland is a prestigious center for foreign businesspersons. It has many peculiarities:

  • A broad range of legal options, for example, peculiar regulative framework for DeFi firms;
  • Favorable taxes, particularly, in Zug, and a variety of double taxation agreements;
  • Stable political climate, business-friendly and well-established public administering;
  • Strong level of confidentiality for investing parties and their contributions (for instance, data about beneficial owners is not publicly disclosed);
  • In the case of a LLC, silent partners or participation loans are available through a contract, permitting investing parties to contribute to their entities without being disclosed.
  • In the case of a corporations, there may be some circumstances that put off a change of owners or voting rights.
  • Min. paid-up capital to open a company in Zug is 20%, however, a min. of 50.000 CHF for a joint stock entity and 20.000 CHF for LLC.

Forms of businesses

The most frequently used organizational and legal forms of legal entities are as follows:

  • LLC – shareowners’ data is available to the public;
  • Joint stock;
  • Branches of foreign corporations;
  • Sole Enterprise or Sole Trader;
  • Limited or general partnerships.

What is needed to form an entity?

Once you have chosen a legal form for your venture and decided on its name, you need to take care of the following:

  • Power of attorney to sign your papers at the Swiss notary;
  • Sample signature of each senior manager;
  • Charter documents;
  • Documents in the respect of an office (for instance, a rental contract);
  • Lex-Friedrich/ Stampa declarations;
  • Statements to waive the obligation for yearly audits;
  • Customer Due Diligence Form;
  • Request to the registering body;
  • Passport and proof of residence of each owner and director;
  • In case the owner is a legal entity, there should be provided appropriate papers and a statement of the board to set up subsidiaries.

Branches

One of the variants to set up a business in Zug/Zurich is to buy a ready-made firm. Such a venture can often be run once after the purchase, it is possible to choose another name. Similar to ready-made firms, opening branches of foreign organizations provides a range of opportunities to businesspersons. A branch operates like a company it can act as a holding company as well. The management of the parent entity can run it if a local resident with signatory rights is designated. A branch belongs to the same legal entity. Hence, the transferring of funds from the branch to the HQ is no dividend and there is no withholding tax on dividends and interests. But there are some limitations if the parent entity is offshore. The amount of min. paid-up capital for such kind of business organization is low, and the branch does not need any start-up capital.

These are the basic characteristics and conditions for Swiss entities. If you have any questions in terms of business setup in Switzerland, do not hesitate to contact us for further discussion.

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