Company incorporation in Switzerland

Why do companies incorporate in Switzerland?

Switzerland is a recognized authority at the international market, the country with the highest living standard and population welfare. Switzerland is a federation and consists of 26 cantons, each of them has its own constitution, legislation and tax system. A developed economy, a stable legal, political and banking system, as well as government support for business make Switzerland incorporation one of the best jurisdictions for entrepreneurial activities.

Due to high standards in all spheres of life, Switzerland is included in the list of the most expensive countries of the world; therefore, Switzerland business registration is preferable for large business, investment activity and cryptocurrency business

Benefits for IT companies

Registration of IT company in Switzerland provides you with the following benefits:

  • Swiss company incorporation ensures the country with excellent reputation, which is always appreciated by international partners.
  • Strict confidentiality and security guaranteed by Swiss banks to their clients. But it is worth considering that in order to open an account, most banks require a certain deposit amount, which, depending on the bank, may exceed CHF 500,000 (EUR 463,000), as well as the amount of the required cash balance.
  • For company incorporation, Switzerland is an attractive option due to the absence of corruption and transparent legislative regulation.
  • Avoidance of double taxation with many countries.
  • IT company in Switzerland has an opportunity to choose the canton with the most favorable taxation system, since each canton enjoys tax autonomy (according to the 2020 tax reform, the lowest corporate tax rate is set in the canton of Nidwalden – 11.97%, in the canton of Zug – 9%, in Geneva – 13.99%).
  • Switzerland incorporation guarantee one of the lowest VAT rates in Europe –7%.
  • Opportunity to use Patent Box – the preferential tax treatment, which allows you to exempt from taxation up to 90% of profits from software and intellectual property.
  • Switzerland business registration provides an opportunity to conduct legal activities in the field of cryptocurrencies.
  • Absence of exchange controls.

Aforementioned benefits plainly explain why you should choose Switzerland to incorporate a company. 

The most acceptable organizational and legal forms of conducting business in Switzerland are:

  • Joint Stock Company (AG);
  • Private Limited Liability Company (GmbH);
  • Private Entrepreneur (Einzelfirma).

The most popular for small and medium-sized company incorporation Switzerland and at the same time the easiest form for registration is GmbH. In such a company, the shareholders’ liability is limited by the amount of their contributions to the authorized capital, and in the case of the company debts, the personal assets of shareholders are not affected in any way.

Features of GmbH:

  • Minimum authorized capital is CHF 20,000 (EUR 18,000), and at the time of registration at least 50% of the declared authorized capital must be paid.
  • Maximum authorized capital is CHF 2,000,000 (EUR 1,850,000).
  • In order to deposit the authorized capital a technical account must be opened.
  • Availability of a registered legal address in Switzerland is obligatory.
  • A shareholder can be an individual or a legal entity, regardless of residency.
  • Director – one individual resident in Switzerland or several directors, most of whom are residents.
  • A secretary is not required, but if a secretary is presupposed – only an individual.
  • Providing a Switzerland incorporation services, cantonal legislation must be taken into account upon registration.
  • You can register a company in the business register of Switzerland remotely, but in order to open an account, you will most likely have to personally visit the bank.

How do I incorporate a business in Switzerland?

Company registration in Switzerland includes the following stages:

  • choice and verification of the name uniqueness;
  • preparation of documents;
  • contribution of the authorized capital;
  • company registration in company register of Switzerland.

What do you need for a company registration in company register of Switzerland:

  • unique name;
  • copies of passports of beneficiary, shareholders, director;
  • if a shareholder is a legal entity, then copies of constituent documents;
  • proof of permanent address (for example, a utility bill).

How can a foreigner register a company in Switzerland?

Foreigner may proceed with the Swiss company incorporation in one of the following ways:

  1. Person who has a Swiss resident card and is not a citizen of Switzerland may register a company;
  2. Company may be registered by one of the spouse who is a citizen of Switzerland or who has Swiss resident card (it is possible to open a joint company with Swiss citizen/resident);
  3. Person may file an application to any of the respective canton authorities specifying its professional experience and skills, approximate number of working places to be created, importance and value of its business, estimated investments etc. to receive a permit for incorporation. 

Tax Law in Switzerland

Tax law in Switzerland depends on the canton where the company is founded. The average corporate tax rate in Switzerland is 16.6%. The best canton for foreign companies taking into account the tax burden is Nidwalden: it provides 10.1% income tax. Geneva established the highest corporate tax rate in Switzerland, namely 21.4%.

How we can help?

For working with Switzerland it is not enough just to know the legal requirements, it is advisable to have long-term partnerships with local lawyers. VigoLex has been working with this jurisdiction for more than one year and is well acquainted with consultants in different cantons of Switzerland, therefore, it can help the client make a choice and start a business in this country.

Our specialists will gladly provide a Switzerland incorporation services to you, consult you on the matters related to the business register of Switzerland and other aspects of Swiss company incorporation explaining you why you should choose Switzerland to incorporate a company.

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