Switzerland is renowned for its stable economy, business-friendly environment, and strategic location in the heart of Europe, making it an attractive destination for entrepreneurs looking to start a company. With competitive tax rates, a highly skilled workforce, and an advanced infrastructure, Switzerland offers numerous advantages for both local and international businesses. However, starting a business in Switzerland requires understanding the country’s specific registration process and regulatory requirements.

This article provides a detailed, step-by-step guide to Swiss company formation, covering everything from choosing the right legal structure to navigating regulatory obligations and securing permits.

Step 1: Decide on the Legal Structure of Your Company

The first and most crucial step in setting up a company in Switzerland is selecting the appropriate legal structure. Switzerland offers several business structures, each with its own implications for liability, taxation, and regulatory requirements. The most common types are:

• Sole Proprietorship: Ideal for individuals or freelancers who want a simple structure. It offers minimal registration requirements but comes with personal liability.
• Limited Liability Company (GmbH/SARL): Popular for small to medium-sized businesses, this structure limits personal liability for shareholders and requires a minimum share capital of CHF 20,000.
• Public Limited Company (AG/SA): Often chosen by larger businesses, this structure provides limited liability and has a minimum share capital of CHF 100,000.
• Branch Office: Suitable for foreign companies looking to expand into Switzerland without creating a separate legal entity.
• Choosing the right legal structure is essential, as it will influence your company’s tax obligations, liability, and regulatory requirements.

Step 2: Choose a Unique Company Name

After selecting the legal structure, the next step is to choose a unique name for your company. In Switzerland, business names are subject to specific rules and must be unique within the selected canton. Ensure that the name reflects your business’s nature and adheres to Swiss naming regulations.

To confirm availability, you can search the Swiss Commercial Register and verify that no other companies have registered the same name. Additionally, it’s wise to check domain availability if you plan to operate an online business.

Step 3: Draft the Articles of Association

The Articles of Association is a foundational document that outlines the internal regulations and governance structure of your company. It typically includes information on:

• The company’s purpose and business activities
• The legal structure and capital contributions
• Shareholder rights and responsibilities
• Management and board member duties
• Decision-making processes and voting rights
• Drafting the Articles of Association is crucial, as it sets out the company’s operations and guides internal decision-making. This document must be prepared and notarized, especially for limited liability companies (GmbH/SARL) and public limited companies (AG/SA).

Step 4: Secure the Minimum Share Capital

For limited liability companies (GmbH/SARL) and public limited companies (AG/SA), Swiss law requires a minimum share capital that must be deposited in a Swiss bank account before registration. The minimum capital requirements are:

• CHF 20,000 for a GmbH/SARL
• CHF 100,000 for an AG/SA, with at least CHF 50,000 paid in at the time of registration
• To proceed, open a temporary capital deposit account with a Swiss bank. The bank will issue a capital deposit certificate, which confirms the funds have been deposited and will be needed when you submit your application to the commercial registry.

Step 5: Notarize Company Documents

Certain company documents, including the Articles of Association and capital deposit certificate, must be notarized. In Switzerland, notarization is required for limited liability and public limited companies. The notary will authenticate the documents, ensuring they comply with legal requirements and accurately reflect the business’s structure and purpose.

During this step, you may also need to provide identification documents for shareholders and directors. Once notarized, these documents become official and can be submitted to the commercial registry.

Step 6: Register with the Swiss Commercial Register

The Swiss Commercial Register is a central registry where all businesses in Switzerland must be registered. This is a critical step, as it provides your business with legal status and allows you to operate as a recognized entity.

To register, submit the following documents to the commercial registry in the canton where your business is located:

• The notarized Articles of Association
• The capital deposit certificate
• Identification documents for shareholders and directors
• A signed application form

Once approved, your business will be assigned a unique commercial registration number and will appear in the official Swiss Commercial Gazette. Registration fees vary by canton and can range from CHF 600 to CHF 1,200.

Step 7: Apply for a VAT Number (If Applicable)

If your company’s annual revenue is expected to exceed CHF 100,000, you must register for Value Added Tax (VAT) with the Federal Tax Administration (FTA). Switzerland’s VAT rate is currently 7.7%, with reduced rates for certain goods and services.

To apply for a VAT number, submit an application to the FTA detailing your expected turnover, business activities, and company structure. Once registered, you’ll be required to collect VAT on applicable goods and services and submit periodic VAT returns.

If your company’s revenue is below CHF 100,000, VAT registration is optional but may be beneficial if you plan to claim VAT on business expenses.

Step 8: Obtain Necessary Permits and Licenses

Depending on the nature of your business, you may need specific permits or licenses to operate legally in Switzerland. Common industries requiring permits include:

• Healthcare and pharmaceuticals
• Food and beverage services
• Construction and engineering

Financial and insurance services

The type and complexity of permits required will depend on your business activities and location. It’s essential to research and apply for all necessary permits before commencing operations to avoid penalties. Local chambers of commerce and trade associations are valuable resources for understanding permit requirements in your industry.

Step 9: Set Up a Corporate Bank Account

Once your business is registered, you’ll need to open a corporate bank account to manage finances and conduct transactions. A corporate bank account is separate from the temporary capital deposit account used during the registration process. Having a Swiss corporate account also provides legitimacy to your business, making it easier to receive payments and manage expenses.

To open a corporate bank account, you will need to provide the following:

• Company registration documents from the Swiss Commercial Register
• Proof of address for the company’s registered office
• Identification documents for authorized signatories
• Swiss banks generally have stringent compliance standards, particularly for foreign-owned businesses, so be prepared to undergo thorough due diligence during the account opening process.

Step 10: Register for Social Security and Insurance

If your company will have employees, you must register with the Swiss social security system and arrange for insurance coverage. Swiss law requires employers to provide social security benefits, including contributions to old-age pensions, unemployment insurance, and accident insurance. The main social security contributions are:

• Old Age and Survivors Insurance (AHV/AVS)
• Disability Insurance (IV/AI)
• Accident Insurance (UVG/LAA)
• Additionally, certain industries may require occupational pension plans and health insurance coverage for employees. To ensure compliance, register with the social security authorities and obtain insurance from a licensed provider before hiring any staff.

Ongoing Compliance and Reporting Requirements

While these 10 steps cover the initial company registration process in Switzerland, it’s important to be aware of the ongoing compliance requirements for Swiss businesses. These include:

• Annual Financial Statements: Swiss companies must prepare and file annual financial statements, including balance sheets, profit and loss statements, and cash flow summaries.
• Auditing: Depending on your company’s size and structure, you may be required to conduct an annual audit. Limited liability and public limited companies exceeding certain thresholds are subject to audit requirements.
• Tax Filing: Corporate tax returns must be filed annually, and VAT returns must be submitted quarterly or annually, depending on your turnover.
• Renewal of Permits and Licenses: Ensure that any business permits or licenses are renewed as required to maintain compliance.
• Failure to meet these ongoing obligations can result in fines, penalties, or loss of business privileges, so staying on top of compliance is essential for long-term success.

Conclusion

Starting a business in Switzerland can be a rewarding endeavor, but the registration process requires careful planning and adherence to Swiss legal and regulatory standards. By following these 10 steps—from choosing the right legal structure to obtaining necessary permits and registering for social security—you can establish a solid foundation for your company’s success in one of the world’s most stable and business-friendly economies.

With its strong economy, skilled workforce, and access to European markets, Switzerland offers tremendous opportunities for entrepreneurs. Staying informed about compliance requirements and working with local professionals where needed will help ensure that your business is set up efficiently and ready to thrive in the Swiss market.