Setting Up A Business In Switzerland

In the article I share what I learned about Setting Up A Business In Switzerland. The Swiss constitution guarantees the freedom of trade and industry and extends this to foreign nationals that desire to set up and operate a business in the country. Many entrepreneurs prefer to set up a business in Switzerland because of numerous benefits and the easy incorporation of a business. In addition, the formalities involved are much less as compared to other European companies like Germany, UK, and France.

Setting Up A Business In Switzerland

Entrepreneurs have the option of forming a:

– Joint Stock Company or Corporation

– Limited Liability Company

– Branch of a foreign company

Most foreign companies choose a joint stock company or corporation for their Swiss subsidiary. In order to form a corporation you are required to produce 100,000 Swiss francs as registered capital and deposit 50,000 francs at the time of incorporation. The amount of liability is limited to the corporation’s assets. Some of the main advantages of a corporation are that the investors can retain anonymity and shares are easily transferable. One drawback is that corporations attract double taxation in the form on income from the corporation and dividends from shareholders.

You also have the option of forming a limited liability company with one or more persons. The minimum requirement is a registered capital of 20,000 Swiss francs and the company’s liability is limited to the amount of registered capital. It is the most convenient form of business entity that can be established and is less expensive as well.

Most small and medium-sized companies opt to form a limited liability company. The main advantage of a limited liability company is the low costs involved to set up. However, you ought to note that the transfer of shares can be more complicated.

Foreign companies are allowed to open a branch in Switzerland on the basis of an endowment capital that is determined by the mother company. The major advantage is the no own capital is required. However, no legal creditor or debtor relationship can be established between the mother company and its branch.

One of the most attractive benefits of doing business in Switzerland is that Swiss taxes are lower than other European nations. Maximum tax rates are 25% which is much less thatn the 30 – 55% tax rates across other countries. In addition, taxes can be deducted as an expense from your income, which reduces the effective tax rate significantly.

Each region or Canton has their own tax laws, while all of them offer tax relief and exemptions in an effort to attract foreign companies as well as new startups. In addition, foreign companies are treated just the same was as national firms, barring a few restrictions on real estate purchase that does not really hamper business operations.

Apart from direct investments, many Swiss firms are open to joint-ventures. The Swiss franc has a high value which makes good business sense since they have a favorable cash flow position. So, if you are looking for a good business opportunity, you ought not to ignore Switzerland and the numerous benefits it offers to entrepreneurs.

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