Setting up a business in Switzerland Ė key aspects

Many foreign entrepreneurs and companies are interested to start conducting business operations in Switzerland and that is for a reason. Switzerland is considered one of the best European locations for setting up a business and one of the most attractive business locations in the world. With a solid economy, great government policies regarding the business environment, highly developed infrastructure, a favorable taxation system and highly skilled workforce, itís no surprise that there a many advantages when setting up a business in Switzerland.

Choose a name for your business

When setting up a business in Switzerland, you have to consider that in some case itís necessary to establish right from the start a name for your business. For example, in Switzerland all companies that are registered as GmbHs must have the word “GmbH” in the ending of the name.

Whichever type of business structure you choose, there canít be two companies with the same name in Switzerland, and therefore you must check first if the desired name is not already taken. All registered business names are listed in the Federal Registry.

Choose the most suitable business structure

The next step is to decide which type of business structure is the most suitable for your needs. The most common business structures used in Switzerland are the AG and the GmbH.

The GmbH is similar in structure with the private limited company. It can be founded by one or more individuals or legal entities. The founders donít have to be Swiss citizens or be residents of Switzerland, but they must have a Swiss representative in front of authorities, clients and business partners. For a GmbH, the minimum required share capital is 20,000 CHF, which must be paid up upon the companyís registration. The articles of association of the company must be notarized and the necessary paperwork include identification documents, proof of residence and a bank statement obtained from a Swiss bank after the share capital is deposited. Shareholders are listed into a public registry.

On the other hand, a Swiss AG has a structure similar to a corporation, meaning that it can be used for various business purposes, including commercial activities, company subsidiaries, company branches or multinationals. The founder or founders may be foreign citizens, but half of the companyís board of directors must be formed by Swiss residents. The minimum required share capital is 100,000 CHF, from which 50,000 CHF or at least 20% must be paid up upon registration. The shareholders are not listed into a public registry.

In addition, individuals interested in setting up a business in Switzerland should know that they can also form other business structures, such as sole proprietorships, general partnerships and limited partnerships. These types of business structures donít require a minimum capital, but the founders or partners have full liability.

Documentation needed for setting up a business in Switzerland

One of the great advantages of setting up a business in Switzerland is the fact that the company formation process involves simplified bureaucratic procedures. The basic documents needed to incorporate in Switzerland are identification documents, proof or residence (usually utility bills no older than 3 months) and a bank statement. To prevent money laundering, the share capital must be deposited with a Swiss bank and the bank may require further documentation regarding the origin of the funds.

The articles of association must be drafted in the presence of a registered Swiss notary. After the drafting of the documents necessary for the newly-established company, an application is sent to the Swiss Register of Commerce, to complete the registration process. In addition, depending on the type of company and business activities, it may be required to apply for VAT.

If your plans for the nearest future include setting up a business in Switzerland, keep in minds to focus on a solid tax planning strategy which can help you benefit from important tax advantages in the country and avoid double taxation.