Switzerland is a cornerstone of the world economy. The wide diffusion of banks and trusts make it one of the planet's largest financial centres. Running somewhat against the global crisis, Switzerland offers the opportunity for all EU citizens (with the exception of those from Romania and Bulgaria) to live and work in the country. It follows that all EU citizens can set up their own business and start a company in Switzerland, such as cross-border companies for which the previous obligations of staying no longer apply. A Swiss company can also be established through dedicated services without moving and leaving one's own country.

Establishment is fairly easy. There are few professions that require special permits, except for some federally-regulated (healthcare, pedagogical professions, social sectors) and cantonal (road traffic, architecture, legal professions, etc.) sectors.

The first step for starting one's own business in Switzerland is the choice of corporate form, which clearly depends on business needs, economic needs and costs, and the level of liability one intends to take on. The three most common forms for SMEs in Switzerland are: the individual firm, the anonymous company (SA) and the limited liability company (Sagl).

individual company form

It is clearly the simplest and most economical and is suitable for entrepreneurs who want to start a small business in person. However, the person required to be domiciled in Switzerland must have a valid residence and work permit for Switzerland. The name of the company must include the name of the founder. Individual firms whose turnover does not exceed CHF 500,000 must keep simplified accounting that only entails revenues, expenditures and assets. Individual firms with a turnover of CHF 500,000 or more during the last financial year must keep accounts and submit accounts in accordance with the rules set out in the Code of Obligations (Article 957 et seq.).

Advantages Disadvantages
wide business freedom liability: the owner is liable with entire private assets and entire commercial substance
capital: at least in theory, an individual firm can be established without capital. In practice, however, minimum initial capital is necessary publicity: ownership relations are known (unlike the SA)
taxes: no double taxation, neither on the company's income nor on the entrepreneur's income or assets. Generally speaking, therefore, the founders of an individual firm enjoy benefits in terms of taxation company name: cannot be chosen freely, the name of the owner must be contained in the name of the firm
establishment: no formalities, few expenses (only for eventual registration in the Commercial Register) requirements on financial statements: individual firms entered in the Commercial Register are subject to the obligation to keep accounts, although the criteria are less rigid than those for SAs and Sagls
administrative expenditure: lower costs than for SAs and Sagls taxes: no separate taxation on commercial substance, private income and private assets. Disadvantages in the field of progressive taxation, since the entire income goes on private tax
liability limited to sole owner
ordinary procedure in case of bankruptcy: rigid procedure on the debtor's entire assets (if the firm is registered in the Commercial Register)

General Partnership

The General Partnership, consisting of two or more natural persons, does not have any legal personality, so it is not a legal person. In trade relations, however, it can present itself externally and acquire rights, establish commitments or sue under its name.

As a business, it is not subject to taxes; however, each individual partner is subject to tax on the basis of wages, share of profits, interest on own funds and assets.

Liability requirements entail risks for partners: they are jointly and severally liable without limitations for up to 5 years from dissolution of the company. However, individual partners are only required to pay if the general partnership has been managed without success.

The general partnership requires the signing of a social contract among partners. Those opting for this legal form are strongly advised to have the social contract examined by an expert. For general partnerships, registration in the trade register is mandatory.

Advantages Disadvantages
no initial capital required Liability: partners are jointly and severally liable without limitations.
simple constitution mutual dependence among partners
simple organisation (depending on number of partners) little flexibility for partners (e.g. prohibition of competition)

Limited Partnership

The Limited Partnership, similar to the homologous Italian form, permits the raising of funds without having to involve a new partner. The limited partnership plays only a secondary role in the Swiss economy. Two or more natural persons are needed to found a limited partnership. The limited partnership is started through a social contract among the founders. Registration in the Commercial Register is mandatory. At least one of the partners, the so-called active partner, is liable with his/her private assets without limit for the company's commitments. The other partners, the so-called limited partners, are only liable up to a given asset contribution, called limited capital. Limited partners can also be legal persons. However, they cannot be vested with management of the company, have only limited control rights and are often subject to a share in profits and losses which differs from that of active partners. The limited partnership is usually chosen when an individual firm or a general partnership needs additional own funds without wanting the company's management to be enlarged by a new member.

Advantages Disadvantages
No minimum capital is required for the establishment of a limited partnership. Active partners are liable in a subsidiary, joint and several manner without limitations.
If there are obligations, the company is liable in the first instance with corporate assets. Both active and limited partners are liable for five years after leaving the company.
Limited partners (investors and capital providers) are liable with subsidiary and joint and several liability, but only to the extent of limited capital. Active partners are subject to bankruptcy procedure.
Operational management is clearly differentiated from financial investors.

Anonymous Company (SA)

The Anonymous Company (SA), comprising one or more persons, including legal persons, is similar to the Italian S.r.l. and is the fastest and most effective solution for most entrepreneurs.

It can be established with a minimum capital of CHF 100,000, but at the time of formation it is possible to pay only 20% of the subscribed capital (with a minimum of at least CHF 50,000). Shares can be nominative or bearer shares.

At least one member of the Board of Directors or management must be resident or domiciled in Switzerland. The company can be trust administered.

In Ticino, the total tax on company profits is about 20%. However, there are special corporate tax forms that enjoy a lower tax burdens.

Advantages Disadvantages
liability: shareholders are liable only for their share of share capital; the management of the company (board of directors and management) is liable if there is an act of negligence or even a crime capital: a higher minimum initial capital (CHF 100,000) is required than that for the Sagl
publicity: ownership relations are not public (no registration of shareholders in the Commercial Register). Facilitated sale of company constitution: expensive formalities, high expenses
social benefits: shareholders employed in the company are considered as employees and therefore enjoy social security Double taxation on the revenue and capital of the SA, and on income (dividends) and shareholder assets
The name of the company can be chosen freely rigid requirements regarding financial statements: legal reserves, measures in the event of overdue debts, etc.
taxes: progressive taxation can be interrupted by profit splitting. Capital gains are tax-exempt high administrative costs: protocols, operating reports, accounting, general shareholders' meeting, tax forms, auditors, etc.
acquisition of influence possible: shares with voting rights, share constraint, distribution of shares in their environment

Limited Company (Sagl)

The Limited Company (Sagl) is a mixed form between anonymous companies and general partnerships. Over the years this form of company has witnessed a major development. It can be established with a minimum capital of CHF 20,000, which must be fully paid or covered in kind. Through total liberation of the share capital, there is no joint and several liability of the partners. Unlike the previous law, the new law on Sagls no longer envisages a maximum share for the share capital. The minimum share per partner, in cash or in kind, is CHF 100. Creating a Sagl is done by registering in the Commercial Register. As for the SA, its constitution takes place through a notary deed. The founders of the firm have to declare the foundation with a public deed, establish the statute and convene the bodies. Each partner has stock ownership in the share capital with at least one capital share. A written agreement signed by all parties concerned is sufficient for transferring capital shares; official certification is no longer necessary.

Advantages Disadvantages
relatively low initial capital is required (at least CHF 20,000) double taxation on the revenue and capital of the Sagl, and on income and shareholder assets
limited guarantee on share capital (paid in full) constitution: constitution costs higher than those for the individual firm
company name: free choice of name, "Sagl" must be added to the name publicity: bodies, capital and capital shares are made public through registration in the Commercial Register
founder: only one founder is needed high administrative costs: protocols, shareholders' meeting, tax forms, etc.
progressive taxation: profit splitting (in the case of the Sagl, the partner's salary counts as profit) can break the maximum of progression
sale of capital shares: the resulting capital gain is not subject to taxes


Switzerland Flag
Average start-up times

18 days

Availability of pre-established (ready-made) companies No
Accounting No
Secretary No
Nominee Shareholder Yes
Nominee Director Yes
Average taxation 12%
Published information about the company's directors

The names of executives appear in the public register (available on the Internet). The names of partners also appear for the SARL.

Accounting obligations Annual Auditor not required
Legislation and controls

The governing authority is the cantonal Business Register, which acts as a surveillance authority.

Confidentiality Bearer shares are permitted
Documents required
  • certified copy of passport or ID
  • certificate of residence dating back no more than three months
Time Zone UTC+1
Currency Swiss franc
Risk indicators Average political risk: 4%
  • Expropriation and breaches of contract: 4%
  • Risk of war and civil unrest: 8%
  • Transfer of capital and convertibility: 1%
Average credit risk: 10%
  • Failure to pay by sovereign counterpart: 1%
  • Failure to pay by bank counterpart: 12%
  • Failure to pay by corporate counterpart: 17%
GDP growth 1,3%