Register Company in Switzerland

• Prior to Swiss offshore company formation, it is essential to pick the correct type of company.
• Based on your business structure and long-term goals, Tetra Consultants will advise you on the most optimum business form, paid up share capital, corporate structure and business licenses if applicable.
• Generally, Tetra Consultants would recommend setting up a Limited Liability Company as it is the most common business structure in Switzerland.

• Before Tetra Consultants proceed to register company in Switzerland, we will search and reserve your company name through the Commercial Registry. The Swiss trade register, also known as the Registries of Commerce of Switzerland, will contain a list of businesses registered in Switzerland.

• Before Tetra Consultants can incorporate your company in Switzerland with the Swiss business registry, you are required to provide a list of required KYC articles. These include the names of directors, company’s resolution and identification proof.
• Based on the information provided, Tetra Consultants will draft and notarize the Memorandum and Articles of Association, business plan and other incorporation articles.
• Upon successful registration of the company with the Commercial Registry, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association and other corporate articles to your preferred address.

• Depending on the business structure you have chosen to register company in Switzerland, the articles required to open a corporate bank account will be slightly different.
• Tetra Consultants will help in consolidating the necessary details and opening a corporate bank account with a reputable bank of your choice.
• Typically, directors and shareholders are not required to travel to Switzerland to open the corporate bank account. However, if travel is required, we will have a representative accompany you to the bank meeting. Alternatively, our team will negotiate with the banks to conduct a conference call instead or to request for a waiver.
• Once the bank account has been successfully opened, Tetra Consultants will courier the internet banking token and access codes to your preferred address.

Post-registration compliance for Switzerland company registration 

Tax registration 

• VAT registration: If the annual revenue of the company exceeds CHF 100,000, it should register for VAT. The registration needs to be done within 30 days after the limit is crossed. 

• Corporate taxes: A firm is expected to know the corporate tax in each canton. Income tax, capital gains tax, and other obligatory local taxes fall under this category. 

Accounting and financial reporting 

• Bookkeeping: Every Swiss business must maintain accurate financial records. This includes bookkeeping practices in line with Swiss accounting standards. 

• Annual Financial Statements: Annual financial statements must be prepared by corporations. Their audit is required in cases according to size of the company and legal form (e.g., AG or GmbH). 

Corporate governance 

• Board meetings: Meetings of the Board should be held regularly, and the minutes must be recorded to comply with corporate governance standards. 

• Shareholder meetings: Annual general meetings (AGMs) are compulsory for corporations; at such meetings, shareholders can discuss the company’s performance and thus make important decisions. 

Changes in company structure 

• Any alteration to the structure of a company that involves change of directors, shareholder, or registered office must be filed at the Swiss Commercial Register. The public record is thus kept current and accurate. 

Licenses and permits 

• Additional licenses or permits may be needed, depending on business activities. Companies should ensure they possess all necessary operational licenses in order not to suffer penalties. 

Employment regulations 

• If hiring employees, companies must comply with Swiss labor laws, including employment contracts, social security contributions, and occupational health regulations. 

Data protection compliance 

• Companies are obliged to respect data protection as provided by the Federal Act on Data Protection (FADP), which implies handling personal data appropriately and privacy policy in place. 

Swiss Financial License

• In 2020, new regulations were enacted under the Financial Services Act (FinSA) and Financial Institutions Act (FinIA) to introduce new licensing requirements for finance companies operating in Switzerland.
• The FinIA lists five categories of financial institutions: portfolio managers, trustees, managers of collective assets, fund management companies and securities firms.
• Previously, some categories of financial institutions such as portfolio managers did not need a license to operate. Instead, they operate under the supervision of a self-regulating organization or the Swiss Financial Markets Supervisory Authority (FINMA).
• With the enactment of the new regulations, all financial institutions are required to obtain a license from FINMA to engage in financial-market related activities.
• Under the new Act, all financial entities must also adhere strictly to the financial, organisational and risk-minimisation requirements stipulated by FINMA.
• In 2019, Switzerland introduced a new FinTech license[LYX2]  for financial enterprises. The FinTech licence allows companies to receive public deposits of up to CHF 100 million if these deposits are not invested and no interest is paid on them.
• Since the FinTech license is not designed for a specific financial activity, it provides fintech businesses with greater opportunities, while allowing them to enjoy the relaxed requirements of the FinTech license.
• Based on your business activity, Tetra Consultants will apply for the relevant financial license if applicable.

Accounting and tax obligations

• Accounting and tax considerations are important factors when incorporating your company. By outsourcing your Swiss accounting and tax obligations to Tetra Consultants, you can be confident that you will be in the best hands. Our team of consultants will ensure that your firm’s financial statements, corporate tax returns and audits are timely completed without the need for you to travel.
• Additionally, outsourcing your accounting and tax needs to Tetra Consultants will allow you to reduce overhead costs while being ensured of timely reporting and filings. Before the start of the engagement, our accounting team will also keep you updated of all the required deadlines and expectations. Thereafter, we will prepare all required filings in advance to ensure that the stipulated deadlines are met.

Documents required to set up a company in Switzerland 

• Articles of Association 

• Business plan 

• Proof of registered office address 

• Shareholder agreement (if applicable) 

• Declaration of acceptance by directors 

• Valid copies of IDs or Passports of directors, shareholders and UBOs 

• Proof of residence for resident directors and shareholders 

• Curriculum Vitae (CV) or professional background information of directors of the company. 

• Shareholder Register (including details of share ownership) 

For corporate shareholders: 

• Certificate of Incorporation (or equivalent document) 

• Articles of Association of the corporate shareholder 

• Identification Documents for representatives acting on behalf of the corporate shareholder 

Common Challenges When Registering a Company in the Switzerland 

High costs 

• Entrepreneurship in Switzerland requires high costs. The minimum capital, for instance, varies depending on the kind of company: for GmbH (Limited Liability Company), one has to invest at least CHF 20,000, while AG corporations must invest at least CHF 100,000, with a guarantee of not less than CHF 50,000 paid at registration. Registration fees and notarial expenses, not to mention other operating expenses, may also increase the required amount. 

Complex legal requirements 

• Even the legal framework for the formation of a company in Switzerland is quite complex and requires compliance. The regulatory requirements for every business include appointing a director or a local representative. The process may often require legal expertise for the strict compliance of Swiss laws. Our experts will simplify this process and ensure that your business complies with the regulations. 

Language issues 

• Its multilingual setup can be quite arduous for international entrepreneurs, who have to deal with four official languages: German, French, Italian, and Romansh, speaking effectively to clients, employees, and local authorities can be very tough for non-native speakers. Tetra Consultants offers tailored support to help you bridge this language gap. 

Competitive market 

• Quality and innovation are considered to be Switzerland’s main competitive strengths. New businesses often find it hard to establish a competitive advantage by setting up a solid market position and an esteemed brand because of tough competition in the form of well-established players. 

Limited workforce 

• While the economy in Switzerland is strong, there is still a scarcity of highly skilled labor available for certain industries. Often, it is very difficult for new ventures to recruit competent people, especially those who are specialized in certain fields. 

Cost to open a company in Switzerland  

• The cost to open a company in Switzerland varies according to the kind of business entity and specific requirements. If you engage Tetra Consultants, we provide full transparency and a detailed breakdown of all costs before initiating the engagement and ensuring you understand every expense involved in the process. 

• In the case of GmbH, the minimum share capital is CHF 20,000. As part of the total cost, incorporation services, registered office services, government registration fees, and other miscellaneous expenses, including opening a corporate bank account and tax registration, are included. In the case of a Corporation, or AG, the minimum share capital is CHF 100,000, with at least CHF 50,000 paid up at registration. 

• Other costs include notary fees, commercial register entry fees, and professional services for legal and tax advice. Tetra Consultants takes the burden of Swiss company registration off your shoulders and helps you follow all the legal steps. 

• Tetra Consultants offers its end-to-end support whether you want to open a company in Switzerland as a non-resident or resident. You can thereby rely on our company for step-by-step guidance and ongoing support to make your experience smooth and highly efficient. 

Annual reporting requirements

• Typically, a Swiss company’s financial fiscal year is from 1 January to 31 December. Tax returns are required to be filed every year normally within 3 months upon the end of the tax period.
• Generally, most Switzerland-incorporated entities must maintain proper books of account and retain such records for a minimum of 10 years. This requirement is also applicable to Sole Enterprises and partnerships generating sales revenue of minimally Swiss franc 500,000 in the last financial year.
• Companies who exceed 2 of the following thresholds in 2 consecutive business years are also mandated to perform audits. Otherwise, they may opt out of the audit requirement. These requirements include:
  • A balance sheet total of Swiss franc 20 million;
  • A revenue of Swiss franc 40 million; and
  • An annual average of 250 full-time equivalent employees

Income Tax

• Corporate income tax is only placed on resident companies for their taxable profits sourced from Switzerland.
• For foreign investors, you may be subjected to a corporate income tax if you are partners of a Swiss business, own real estate in Switzerland or deal with a broker of Swiss real estate property. Otherwise, the tax will only be levied on your Swiss-sourced income.
• At a federal level, a flat rate of 8.5% is applicable on profit after tax. It is to note that at other cantonal and communal levels, laws will differ and so will the tax burden.

Value-added tax

• A value-added tax will also apply for companies, based on the reported sale amount for goods and services. Typically, the Value-Added Tax is levied at a rate of 7.7%. However, for certain industries such as the hotel industry, you can expect a lower Value-Added Tax.
• Based on your business residence, Tetra Consultants will continue to advise you on your respective tax obligations.

Why register company in Switzerland?

• Before you register business in Switzerland, it is important to understand the business landscape of the jurisdiction. This is to ensure that your newly established company will be able to safely and legally conduct business, while striving towards your long-term business goals.

Political

• The political scene in Switzerland is met with great stability. Neutral in its political relationships with other countries, the local government in Switzerland is also a strong entity. All Swiss Cantons are met with their own legislatures and governments. This ensures that transparency and a form of check-and-balance is available in the country.
• According to Transparency International’s 2020 Corruption Perceptions Index, Switzerland is ranked 3rd among 180 countries when it comes to public sector corruption.
• With harsh rules against migrants, Switzerland’s policy and stance on asylum seekers and migrants have been heavily criticized by a human rights group, Amnesty International, in claims that it has been violating international legal principles.

Economic

• As a member of the European Free Trade Association, Switzerland benefits from several bilateral agreements that eliminate barriers to market access. Cross-border transactions are largely simplified, exempting goods from various charges or custom duty.
• According to the 2019 Global Competitiveness Report published by the World Economic Forum, Switzerland was ranked 5th among 141 countries when it comes to competitiveness.
• The Swiss franc is among the strongest, even so substantially against both the US dollars and the euro. The strong currency Switzerland possesses also indicates the strong economy Switzerland owns.

Social

• The 4 national languages of Switzerland include German, French, Italian and Romansh. Even so, according to the Education First English Proficiency Index, Switzerland is ranked 18th out of 100 countries when it comes to the level of English proficiency within its population. This means that you can expect close to no language barrier when doing business in Switzerland.
• According to the Statistical Office, while burglaries in Switzerland have dropped in 2019, fraud offences have instead more than doubled.
• According to the Organisation for Economic Co-operation and Development’s Better Life Index, the Swiss are in general more satisfied with their lives than the average measured by the Organisation for Economic Co-operation and Development

Technological

• According to the World Bank, in 2019, around 93.1% of its population is on the Internet. This suggests the great interaction between technology and the Swiss.
• The Swiss National Science Foundation supports 8,500 scientists annually. Its contribution has led to Swiss’ strong position within the research industry.
• According to the World Intellectual Property Organisation, Switzerland is ranked the world’s most innovative country in 2020.

Legal

• Switzerland has facilitated a business-friendly environment for businesses through its taxation laws. With great incentives offered by most Swiss Cantons to businesses, doing business in Switzerland is financially rewarding.
• The unified Federal Civil Procedure Code in force mandates that all Cantons provide for an expedited procedure where the amount at stake in commercial disputes does not exceed Swiss franc 30,000.
• In recent times, greater criticism has risen against Swiss supreme court judges who are said to be members of political parties and are reliant on their parties in their elections. This suggests that the judiciary may not be all that independent.

Environmental

• Switzerland adopts a diversified supply of energy to meet its needs. Its shift away depending on fossil fuels have helped combat environmental issues.
• Pledging its alliance in protecting the environment, Switzerland has reaffirmed its plan for climate action until 2030 under The Paris Agreement.
• The Swiss are increasingly recognising the importance of environmental conservation. This change in attitude is observed in a surprising outcome achieved at the Swiss 2019 elections where the Green parties managed to clinch an unprecedented share of the votes.

Looking to register company in Switzerland?

• Tetra Consultants will be your one-stop solution for all your concerns regarding how to register a company in Switzerland. Our services include company formation, registered agent, registered address and business bank account opening.
• Contact us to know more about how to register company in Switzerland. Our dedicated and experienced team will revert within the next 24 hours and answer all your queries.

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