How to Set Up a Business in Switzerland

How to Set Up a Business in Switzerland

Switzerland is one of the wealthiest nations in the world with an annual per capita income of almost CHF 80,000 (approx. US$82,140). Swiss industrial production per capita is higher than the US, China and Germany, focusing on the most complex and regulatory sensitive outputs.

Manufacturing is Switzerland’s strongest sector, particularly chemicals, pharmaceuticals and luxury consumer goods. It’s at the top of the Global Innovation Index league table, making it a great place for high-tech products or services.

The Swiss economy draws its strength from the country’s stable political environment, low taxes, highly skilled labor force, sophisticated financial markets and strong domestic purchasing power. Whilst Switzerland isn’t a member of the EU, it is a member of the European Free Trade Association (EFTA). It also has a global network of 28 free trade agreements with 38 partners outside of the EU.

Due to low crime rates and good infrastructure, Swiss cities often rank as some of the best places for expats to live – with over 24.6 percent of Switzerland’s 8.23 million population being non-Swiss.

However, there are certain issues to consider when choosing to set up a business in Switzerland.

Registering your Company

Do some research on potential competitors to see if your business plan is sustainable. You can see what company names are already registered by consulting Switzerland’s commercial register.

There are seven types of business structures you can choose from:

  1. Single-owner company or sole proprietorship: Suitable for sole owners of a company or professionals who work for themselves. The person running the business must be a Swiss resident.
  2. General partnership: Like a sole proprietorship but with two or more people jointly operating the company. Partners must be Swiss residents and the company must have a Swiss address.
  3. Limited partnership: A less common version of the general partnership where general partners have unlimited liability and limited partners may be liable up to an agreed amount.
  4. Corporate/Joint-stock company: The most common form of business; the corporation is considered a separate legal entity. A member of the board or director (or two members) must be Swiss residents and have sole (or joint) signatory rights.
  5. Limited liability company (GmbH/Sárl): These companies are also a legal entity, requiring a minimum shareholders’ equity of CHF20,000. At least one managing partner must be a Swiss resident.
  6. Subsidiary: A legally independent company affiliated to a foreign entity. Can take the form of a corporation or a limited liability company.
  7. Branch: A branch is a financially independent but legally dependent wing of a head office operating outside its home company. One Swiss resident with legal authority is required, and the branch is taxed in Switzerland as a Swiss company.

Explore the guidance and information given by the Swiss Federal Council here.

The World Bank provides detailed legal and bureaucratic steps to register a new legal entity in Switzerland.

Immigration and Visas

Before setting up a business as a foreigner, you must first become a Swiss resident. The three main resident and work permits issued to foreigners are:

  • Permit L: Short-term residence permit allowing you to stay in Switzerland for up to one year
  • Permit B: A temporary residence permit valid for one year but can be extended annually
  • Permit C: A settlement permit for people who have been living in Switzerland for at least 10 years. Canadian and US citizens only need to live in the country for five years to apply for this permit

EU/EFTA citizens can enter Switzerland freely but must apply for a work permit. Non-EU/EFTA citizens need to get a special residence permit with authorization to work in Switzerland. You must apply for an entry visa in your home country, then receive permits on arrival in Switzerland.

The Swiss authorities are strict when issuing work permits to non-EU/EFTA citizens, usually your request will only be granted if you are a manager, specialist or other qualified worker, and the established quotas allow it.

Generally, you can only work in Switzerland as a self-employed person if you hold a settlement permit. This rule doesn’t apply if you’re married to a Swiss citizen or you can prove your business will create jobs or some other economic benefit in Switzerland.

Contact the Federal Office for Migration (FOM), the Swiss embassy or consulate in your home country for advice.

Language

The Swiss Federal State consists of 26 distinct ‘cantons’ (regions), each with extensive political powers. Bern is the federal and administrative capital, though Zurich is the financial capital. Other major cities include Geneva, Basel and Lausanne.

Switzerland has four official national languages: German (spoken by 62.6 percent of the population), French (22.9 percent), Italian (8.2 percent) and Romansh (0.5 percent). Each canton can decide on their official language.

English is often used as the lingua franca in business, but it is helpful to know if clients will need translators, and it’s a sign of respect to speak to them in their own language. Owing to the diversity of languages and culture, Switzerland is a fantastic test market for businesses before going global.

Business Culture

Swiss business attitudes tend to be conservative, preferring to stick to the rules and valuing empirical thinking. Business has a strict hierarchical structure, with only the highest authority individuals making the final decisions.

The Swiss appreciate good timekeeping – arrive at least five minutes early for meetings. Being late is considered rude, but if you will be late for reasons outside your control, make sure to let whoever you’re meeting know.

Avoid asking personal questions as the Swiss tend to be quite private people. Other subjects to avoid are Swiss neutrality, the military, monopolies of industry and the history of voting rights for women in Switzerland.

Written by Julia Gilmore

Julia is a writer for TopMBA.com, publishing articles for business students and graduates across the world. A native Londoner, she holds an MSc in Marketing Strategy & Innovation from Cass Business School and a BA in Classical Studies & English from Newcastle University.

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