I have been meaning to write about this topic for a long time and can’t wait any longer since I am getting almost daily inquiries on how to start a company in Switzerland. By answering the most frequent questions I hope to be able to help more quickly in the future. So let’s dig in and get to the FAQ around founding a Swiss business.
Basics on how to start a business
I am assuming that you have a business idea and have made (some kind of) a business plan, even if it is just on a napkin. Ideally you have already started and have a pilot version of your product or you have beta-tested your service. In this post I will not cover the importance of a well thought-through business plan, marketing plan and sales plan as well as a clear vision, mission, strategy, goals etc. Just let me say this, that you should have the foundation in place before you start the process of founding a company.
Legal Structures for a business in Switzerland
The biggest decision you take when registering your business is picking the legal structure. There are basically three main legal structures for Swiss businesses.
CLICK HERE to download the “Swiss Business Structures” PDF.
Procedure for starting a Swiss company
Depending on the type of legal structure you choose the procedure is quite different. Here I will only highlight the difference between sole proprietorship and limited liability company.
Sole Proprietorship
Most entrepreneurs start with a sole proprietorship (SP) as this is the cheapest and simplest way to start a business. You can later on change a SP into a limited liability company (LLC). The social insurances registry (SVA) assumes that you start your business and then register it after you have acquired a few customers and are earning more than CHF 2’300 per year. As soon as you earn more than CHF 2’300 you are required to pay social insurances from your income. Since the registry works hard to eliminate fake self-employment you have to fill out a detailed form on your business and name a few customers (at least three) in order to prove that you are not just working for one customer. If the registry is in any doubt about your business purpose then they can decline your application. The founder of the SP does not have to live in Switzerland but needs to have a work and residence permit.
Here is an example from Zurich for registering a SP with the social insurances registry of canton Zurich which is the mandatory piece of the registration. Registering with the trade register is optional for SP earning less than CHF 100’000 revenue but it can be beneficial to have your business publicly listed especially if you import any goods.
Documents that may be required to prove that you are not entering a fake self-employment:
- Business plan
- Offers to customers
- Rental agreements
- Marketing material
- Customer contracts
- Supplier contracts
Limited Liability Company
More and more entrepreneurs choose a limited liability company (LLC) as they can choose a name independent of their family name and there is no application process with the social insurances registry. Basically the registry assumes that if you are willing to invest CHF 20’000 capital (or equally valuable assets) you are probably not a case for fake self-employment. Still if you don’t show any profits after three years in business they will inquire about your purpose and you may have to prove that you have at least three customers. The registration process with the official company registry (Handelsregister) is a simple application after you have prepared your documents which include founding documents with company bylaws, all stamped from a notary. Before the notary stamps your documents you will have to have a proof that you paid the share capital into a temporary holding account at your bank (banking fee CHF 200). At least one representative (with signing rights) of the company has to live and have a work and residence permit in Switzerland.
Here is an example from Aargau for registering a LLC with the company registry of canton Aargau.
Required documents
- Confirmation from your bank on paid share capital and/or confirmation from a notary on the value of your assets
- Founding documents stamped by notary
- Company bylaws stamped by notary
Documents that are good to have but generally not required
- Business plan
Foreign Nationals
EFTA/EU
If you are an EFTA or EU citizen with a working permit in Switzerland there is no limitation for you founding a company in Switzerland. Coming from an EFTA country myself I founded my LLC very easily just showing my passport and my B EU/EFTA permit and did not have to show any other documents except the ones I have already mentioned above. If you have a B permit then I recommend you found your company while you still have a valid permit. When renewing your permit you may have to proof that you have the financial means to live in Switzerland if you are not employed or married to someone with a valid permit. This may pose a problem if you are renewing your permit in the starting phases of your boot-strapped business.
Non-EFTA/EU
Non-EFTA/EU citizens who have a C permit or are married to a Swiss citizen have the right to register a company in Switzerland. Everybody else will have to apply for the right to found a Swiss company. You should inquire about the necessary documentation and funds with the migration authorities in your canton. Most cantons require non-EFTA/EU employees (also self-employed) to have minimum salary of CHF 120’000 to get a B permit. Assuming you cannot pay yourself a salary in the beginning you may at least have to prove that you have the funds to provide for yourself. Once you have all the necessary documents together then you should let the migration authorities go through the application with you. The authorities will want you to prove that your intended business will have a “lasting positive impact in the Swiss labor market”. The best way to be accepted is to have a detailed business plan as well as the documents often required for sole proprietorship, see above.
Update: Not living in Switzerland
If you are a foreign national, don’t live in Switzerland, and don’t have a Swiss residence permit then it will be very difficult for you start a company in Switzerland. The only way I know is to find someone else to start the company for you. There are lawyers that can help with this kind of structure but only if you have the funds necessary to pay for very expensive legal services and maintenance of the company.
What to do when I leave the country
This is a question I often hear from expats who want to start a business in Switzerland but are wondering if it is worth registering a business for a limited time. Well, you basically don’t have a choice. If you are earning more than CHF 2’300 from your business, you are required to register and pay social insurances. The best way is probably to register a sole proprietorship and then to close down your business when you leave as you can not sell a SP. If the company is location-independent then you can take the assets/idea with you and start a new business in a different country and your customers will not know that anything has changed. If the company on the other hand is location-dependent, you could either consider selling the assets and/or the idea before you leave or you change it into a LLC and have a representative run it for you, this person needs to live and have a work permit for Switzerland.
Resources
For further information I recommend gruenden.ch (in German and English) where the whole spectrum of starting a business in Switzerland is covered in detail (supplied by the canton of Zurich). The Swiss Federation also has good information on its KMU Portal (in German, Italian and French).
If you have a relatively simple business then you can prepare your founding documents and company bylaws online with StartBiz (in German, Italian, French and English). A lawyer will charge you at least CHF 500 for preparing these documents for a LLC and stamping them as a notary. I paid CHF 800 myself for a local lawyer but I had gotten an offer for CHF 500 from another lawyer in a different canton. Today I would prepare these documents myself and only get a notary to stamp them. Here is a list of online notary services.
My Background
If you are wondering why I know so much about Swiss startups then here are few facts:
- I have been running companies over 12 years
- I have been managing director for three different Swiss startups
- I was involved in starting one company from A to Z and then 2 years later I started my own company (GmbH).
- I have done a Swiss startup course on top of the startup courses I have done in other countries plus I have an MBA
Next Steps
Are you ready to start your company and want some business mentoring? Then check out my Work with Me page.
Update: Note, if you don’t have Swiss residence permit then I can’t give you any advice beyond what is written here above. I am not a lawyer and cannot help foreigners who don’t have a Swiss residence permit start a company in Switzerland.
Hello,
For an Italian passport would like to start business permit to work what would be the procedure?
This article is written for people who are living in Switzerland. If you don’t have Swiss residence permit then I can’t give you any advice beyond what is written here above.
thanks for all the information, it is very helpful.
My question is that is it possible to start a company in CH with a student B permi?
Thanks for your answer!
B Permits that are based on study or working for a particular company are not like regular B Permits and are therefore not good enough for you to found a company in Switzerland.
Hi, great write-up. I’m considering starting a small on-line store in Switzerland. I’m not Swiss, but I have a B permit and I’m an EU national. Which company set-up would you recommend?
You have to decide what is best for your particular situation. I wrote in the article what I did.
Dear Sigrun, I’m portuguese thus EU national, have a B permit but don’t work for the time being. Just my wife works in Switzerland. I occasionally receive assignments as educational consultant, or as evaluator, for short term duration or to conduct specific tasks. Recently i encountered one problem with a french institution since we elaborated a contract for a specific task but the institution cannot send money to an individual person. should I register as sole proprietorship? but i don’t have any business plans, etc… what would you recommend in this case?
thanks a lot
Carlos Machado
The comment section is for general questions and answers that apply to many, for individual answers I advise you to get consulting, either from me or somebody else who is an expert on this matter.
I want to start a fast food restaurent in swizerland. But i am not swiz . Iam forginer but now i am in france.i just finished my MBA in international trade and now i working in fast food restaurent like kfc . Actually i come to my matter i want one swizz partner for start a business
As stated above, if you live outside Switzerland, then you need to seek advice elsewhere. My blog post is intended for people living in Switzerland.
Hello
Im living in swizerland with student visa. I have b permit for one year. L would like to start a super market in switzerland it s based on srilankan food product and others. I can show bank balance in my account.we r running a own business in srilanka. May i open a business in switzerland?is it possible? Please explain to me
I already gave an answer to a similar question before. Student visa is not enough to start a company in Switzerland.
Hi I am Indian , I want start business in fruits and veritable wholesale in Switzerland .
can you give me idea .
As I said before, this blog post is written for people who are already living in Switzerland and want to start a business.
Thanks for the help with that website, I appreciate it 🙂
I am an EU passport holder and work for a Brazilian company, my plan is:
To live in Switzerland and set up a company there.
Keep working remotely for my company in Brazil but living in switzerland.
I can work from home but I want to pay my taxes and everything else.
Is that possible to do that?
Set up a company > Live in switzerland > Pay my taxes?
Thanks for the help.
Marcus
The tax law in Europe requires you to pay taxes in the country where you are legally registered and where you spend most of your time. You cannot pick and choose.
Hopefully this question isn’t stepping on your consulting toes, but which canton would be more favorable to a small business: Aargau or Zurich?
I’m not a tax advisor but Zug is the most popular one for businesses.
Hello and thank you for your informative article,
I was doing an internship in Switzerland last year and took on some freelance writing work to subsidize my stay. Because I crossed the CHF 2300 threshold I applied to set up a sole proprietorship company. I was successful in doing this ( I had an L-Permit at the time as an EU citizen) but have since left Switzerland. However, I have continued to provide writing services for the clients I amassed during my stay there and continue to receive payments into my Swiss bank account. With December 31 quickly approaching, I’m wondering if I’m allowed to continue my operation even if I no longer live in Switzerland. Any ideas or advice on here I can get some help with this. Above all else, I want to do things by the book. Thanks again
I suggest you talk to an accountant or a lawyer about this. I linked to a list of trusted fiduciaries in Switzerland in the article. Money earned in Switzerland while you live there should be taxed there but the law in Switzerland taxes you based on where you live on December 31st so if you have moved away you should put into the tax report of where you live on that date. For further clarification make sure you talk to an accountant.
Student B permit.I want to open a company with my friends one of them is swiss,me and my friend have a student permit.Can we be co-founder of company,maybe after a year apply for work permit?
A student permit is not good enough to start a company, you’ll have to find another way until you have a regular B permit.
Hello Sigrun!
I am an expat spouse & from a non eu nation. Have a B permit. Have been pursuing my passion here by providing workshops through my son’s school occassionally.
I have just landed myself with a onetime workshop assignment, that shall fetch me more than chf 2300 early next year.
Could/ should I file for a SP? And is it usually granted for non eu expat spouses?
You can and should apply. Start by talking to the SVA office in your community. Different communities want different informations. As a spouse with a B permit you should be eligible but final decision is with your community.
Dear Sigrun
Thanks for sharing your expertise.
I am an EU citizen living in CH for the past 6 years with a valid B permit. Company is moving out of CH and they would like to use my expertise through a consultancy. agreement. Can I set up my company (SP or LLC) in CH, pay taxes and SS here whilst providing services to them outside of CH?
thanks in advance
The simple answer is yes. My clients are all over the world, my company is based in Switzerland.
Many thanks for a great article with a lot helpful information, very generous of you. I have one question please, I’m an EU citizen, with a G permit as I live in France and cross the border everyday for my day job, I plan to establish a company in Basel Stadt besides my normal daily job in Basel, Am I allowed to do this?
Many thanks
You are welcome 🙂 Now that is a great question and honestly I have no idea. I wrote this blog post for people who live and work in Switzerland want to start a company. The best thing you can do is to go to the community where you want to set up a company (Gemeinde) and ask them directly. Every community is a bit different in what kind of information they want so it is best to ask them to get a clear answer. Good luck!
Dear Sigrun,
I am looking to start an IT and engineering services consultancy, I have a C permit , currently living in Switzerland. My question is I do not have 3 customers to start with and how then can I meet the requirements to start a SP or LLC.
Best regards
Ciji
You don’t need three customer to start a LLC, as the article states you only need this for SP. And for the SP you can start your business without registration and once you have some clients you register.
I am working over Switzerland and I would like to start hotel bussiness in Zurich
The article shares what you need before you can start a business in Switzerland.
Hi Sigrun,
Thanks for all your helpfull Information.
Im a American Citizen and i would like to open a company in Switzerland and also like to Move and live in Switzerland.
What i should do in the first place and what are the steps for me.
Thank You
Even though my article is written for those with a permit in Switzerland, I do already answer these questions there. For all further details I suggest you pay someone to advise you.
Hi Sigrun,
From your article i infer that i should only register the company AFTER i start earning the 2,300 CHF, Correct?
That is correct Cate. Make sure you have three customers first and then register.
I am a Swiss citizen living abroad, and want to open a company in Switzerland that would receive most (but not all of its income from abroad) and be 100% owned by a Panamanian company. Is this possible? What are the tax implications?
This question is beyond the scope of this article. I advise you to talk to Swiss lawyer and tax advisor on this matter.
Thanks a lot for your article!
I still have a quiestion. If I have a company in Switzerland, but it was deleted from the register (didn’t snow the activity), should I register a new company or there is some ways to recover this company?
That is out of scope of the blog post. I advise you to talk to your lawyer about this.
I want to start a online business and I have C permit. How should I go about it?
Developing an online business is like developing any other business. You start by solving a problem. If you want to know how to set up your online business you can join the LBA membership https://www.sigrun.com/lba/
Hey
I AM AN INDIAN
DOCTOR , RADIOLOGIST BY PROFESSION CAN I SET UP A DIAGNOSTIC CENTER IN SWITZERLAND
If you don’t fulfil the criteria above then no.
Hi Sigrun – I found your article extremely informative so many thanks for generously sharing your expertise with us. Please forgive my over simplification but, assuming the person wanting to set up a business can do so because they are either a Swiss citizen or an EU national with a B permit residing in Switzerland, then it appears the main differences between a SP and LLC is simply the first is cheaper, not automatically issued and I assume may take longer for them to set up if approved? I would welcome your view on buying an established business please … assuming (doing a lot of that in this post!), the business is profitable and has a good business plan, is there any reason why you would go down the route of LLC instead of the cheaper route of SP? Many thanks in advance.
Buying an established business can be better if it fits your vision and the history of the business is aligned with your values. In my case and in the case of most of my clients I recommend starting from scratch.
Hi. Thanks for a wonderful blog. I have a question. I work in Switzerland with L- work permit. Can I open a company (side business) without registering (as SP) and follow the process of registration only once I make more than CHF 2300 p.a.
Also, the definition of customer: On any website, if there are >3 registered users, do I need to register ?
L is not a valid permit to start a business as it is time-limited. Customer is a paying client, not registered user.
Hi, i m a British citizen and my brother is a swiss national. He is operating a company in Switzerland. I wanted to know if i can be a partner of his company?
I would recommend you talk to a lawyer about that.
Thanks for the article. One question on the SP that is probably relevant to others. You stated ‘ The founder of the SP does not have to live in Switzerland but needs to have a work and residence permit.’
I have a B permit that will turn into a C in July and am considering setting up a business here but then conducting much of my work physically from another country (France, 3km away from the Swiss border and the USA where my partner lives). Is this feasible based on what you wrote above? I am hoping my permit could then be renewed indefinitely if the business is based in Switzerland even though I will reside elsewhere.
Thanks alot for your help. Veronique