If you are interested in running your business from Switzerland or starting one over there, the first thing you must consider carefully is business structure. The type of business you want to run and your business activities will dictate the structure that will suit you best.
Additionally, it is best to find out the type of companies available before you set your up. This is necessary because the type of legal fees and amount of paperwork vary from company to company.
Types of Companies
The types of companies available include the following:
- Sole proprietorship
- General partnership
- Branch
- Limited partnership
- Subsidiary
- Corporation or Joint-stock company
Sole Proprietorship
A sole proprietorship is run by one individual who must reside in Switzerland. Most companies fall in the corporation category with the sole proprietorship coming in a close second. This is the most appropriate type of business for individual business owners.
Liability is unlimited in this type of enterprise. The name of the business owner must be part of the business name. You are required to register with the Chamber of Commerce if your sales go beyond CHF 100,000. How the Swiss taxation rules apply to you.
The incentives that Switzerland offers the business sector make not only business relocation to Switzerland enticing but also attracts a lot of startups.
General Partnership
The only difference between a general partnership and a sole proprietorship is that in the former, more people are involved. When two or more people own or operate a company jointly, they form a general partnership.
There is no limited capital required but the company owners should be residents of Switzerland with the company having a Swiss address. One of the partners must lend his or her name to the company so that it appears as part of the company name. The rest of the partners are represented by the ‘and Co’ that completes the name of the company.
Liability is equal to all the partners and the company must be registered with the following bodies:
- The Chamber of Commerce
- Commercial Registry
A general partnership is not considered an incorporated enterprise. As such, it has no legal entity. However, it can prosecute as well as get prosecuted under its name. Once registration is done fully, the company must henceforth keep statements profits and losses made.
Subsidiary and Branch
A subsidiary is a company that is legally independent and affiliated to an entity that is foreign. A branch is legally dependent but financially independent. It belongs to a head office which operates out of the country.
A subsidiary may take the form of a corporation or a limited company. With a branch, the head office is liable but the branch is taxed in Switzerland. There must be at least one legal Swiss resident available but the lawyer needs not be a Swiss national.
Limited Partnership
General partners have unlimited liability in this type of company. Limited ones are liable up to an amount agreed upon. It must be registered with the Chamber of Commerce.
Corporation or Joint-Stock Company (AG/SA)
The AG/SA form is taken by most companies as it is considered a legal entity that is independent. Legal requirements include at least 3 original shareholders in order to form a corporation.
Liability depends on the value of the company’s assets. CHF 100,000 is the least amount of shareholder’s equity acceptable and half of that must be paid for fully. The company is also expected to observe formal incorporation procedures and pay fees for legal advice as well as taxation.
All types of companies are required to maintain proper accounting and keep records and other related documents for a period of 10 years.
Conclusion
There are very competitive investment incentives at cantonal as well as federal levels. New ventures may even be awarded tax incentives which are availed to foreign businesses as well as local ones. Switzerland is very attractive for enterprise and many businesses are expanding into the country. New businesses are also coming up all the time because of the attractive incentives.
