In the article I’ll tell you about The Advantages Of Doing Business In Switzerland. Switzerland’s strategic location in the heart of Europe makes it one of the most attractive business locations in the Europe. Political and economic stability, a high standard of living, and a large experienced and skilled labor force makes for a favorable business environment. This is evident from the large number of international companies that have their headquarters in the country.
Low capital costs, a well controlled, low rate of inflation, and excellent infrastructure also make it a privileged business location. The country has excellent trade relations with its neighbors and has several bilateral agreements with members of the European Union. The government also welcomes foreign direct investments, and offers several tax incentives and credits to those who are keen on establishing businesses in the region.
The Swiss have a moderate tax system with a federal structure that features various taxes at the federal, cantonal and community level. This system creates a healthy competition among the cantons and municipalities where businesses tend to benefit by better tax rates. Cantons have a significantly low tax rate. Corporations and limited liability partnerships are taxed on their profits and capital. Most cantons have their own tax rates.
However, net taxable income is based on the profit and loss statement with adjustments made for losses or taxes paid. Tax rates on profits vary up to 17% while capital tax is usually 0.1%. Companies with headquarters in the country and those who make new investments are eligible for several tax incentives.
Individuals who are resident in Switzerland are liable to pay income tax at the cantonal and federal levels. One major incentive is that capital gains on movable property is tax free. Expatriates are required to pay a withholding tax that is levied directly from the employer. A federal withholding tax of 35% is levied on income accrued from interest on bonds or dividends. Switzerland also maintains double-taxation treaties with many other countries.
According to Swiss corporate law, you are entitled to establish a business in Switzerland as long as you set up a legal entity. The most common entities are corporations, limited liability company (GmbH), and stock corporation (AG).
To set up a stock corporation (AG) a minimum capital of 100,000 Swiss francs is required. The board of directors must also include a majority of people with Swiss citizenship or they must have a residence in Switzerland. However, holding companies can apply for certain exemptions. If you are looking to set up a limited liability company then you will need a minimum capital of 20,000 Swiss francs. In addition, it is mandatory for one of the officers to be resident in Switzerland. Once you sign the commercial register of the Canton you business comes is recognized as a legal entity. Formalities usually take a week to ten days to be completed.
As a foreigner, you are required to obtain a work and residence permit. Rules and regulations vary for different countries. You are allowed to purchase real estate to conduct a business as long as you hold the necessary permits. Those wishing to join the financial services sector as a broker, dealer, or fund distributor need to apply for a license from the Federal Banking Commission along with their business plan.