Starting a sole proprietorship in Switzerland: the easiest way to become self-employed (Guide 2026)

What does it mean to set up a sole proprietorship in Switzerland?

Anyone setting up a sole proprietorship in Switzerland is choosing the simplest and most common form of self-employment. Unlike a limited company, a sole proprietorship is not a separate legal entity; it is run by a natural person. The entrepreneur and the company are considered a single legal entity. While this structure makes it easy to start your own business, it also comes with a high level of personal responsibility. It is particularly suitable for people who work alone and want to build their business without complex structures. Due to the low formal requirements, it is the first step into entrepreneurship for many people.

Why is the sole proprietorship the most popular legal form in Switzerland?

The sole proprietorship is the most common legal structure in Switzerland. A significant proportion of all new companies are set up as such. This is mainly due to the low entry threshold: no minimum capital is required, administration is straightforward, and the company can be set up quickly. In addition, a sole proprietorship offers a high degree of entrepreneurial flexibility. Decisions can be made independently, without the involvement of third parties, and the accounting requirements are straightforward, particularly for low turnover. This makes sole proprietorships particularly attractive for individuals who want to implement their business idea independently initially.

For whom is a sole proprietorship particularly suitable?

Sole proprietorships are particularly suitable for the following groups of people:

• Self-employed persons without business partners
• Craftsmen and women
• Freelancers such as consultants, coaches, or trustees
• Creative professions, for example in the fields of design, writing, or photography
• Small business owners with personal customer contact

A sole proprietorship is a particularly suitable legal form if no investors are to be involved and the entrepreneurial risk remains manageable.

What requirements must be met to set up a sole proprietorship?

Setting up a sole proprietorship in Switzerland is straightforward. The founder must have legal capacity and be self-employed. No start-up capital is required, and the sole proprietorship is legally established as soon as business activities commence. However, if annual sales exceed CHF 100,000, it must be entered in the commercial register.

Is entry in the commercial register mandatory?

Entry in the commercial register is only mandatory for sole proprietorships with annual sales of CHF 100,000 or more. Regardless of this, voluntary entry may be advisable, particularly for the following reasons:

• Increased credibility with customers and business partners
• Simplified dealings with banks and authorities
• Extended protection of the company name

Many entrepreneurs therefore decide to register in the commercial register at an early stage, even if this is not yet required by law.

What rules apply to the company name of a sole proprietorship?

There are clear legal requirements for the name of a sole proprietorship. The owner's surname must be included in the company name and match the details on their official ID. First names may be included, but this is not mandatory. Additionally, descriptions of activities or imaginative names can be included, provided the company name is truthful and does not mislead. To avoid legal issues, it is advisable to check the availability of the proposed name in advance using the Central Company Index (ZEFIX) and relevant trademark registers.

How does the establishment of a sole proprietorship work in practice?

The process of setting up a sole proprietorship is simple. If the founder decides to register the company in the commercial register, the process usually involves the following steps:

1. Decision to set up the company and choose a company name
2. Preparation of the necessary founding documents
3. Public certification of the signature
4. Registration with the relevant commercial register office
5. Registration with the relevant compensation office (SVA or SUVA)

Without a commercial register entry, the process is essentially limited to registration with the compensation office.

What documents are required to set up a business?

The required documents depend on whether a commercial register entry is made.

Without a commercial register entry:

• Registration with the compensation office as a self-employed person

With commercial register entry:

• Commercial register registration
• Certified signature
• If applicable, a declaration of domicile

The administrative effort remains low overall and is also easily manageable for first-time founders.

What are the costs of setting up a sole proprietorship?

The costs of setting up a sole proprietorship are very low compared to other legal forms.

• Without a commercial register entry, there are usually no direct start-up costs.
• With a commercial register entry, fees of around CHF 200 to CHF 300 apply, depending on the canton.

Additional costs may be incurred in connection with consulting, insurance, or accounting, but these are not necessarily part of the start-up costs.

How is liability regulated for a sole proprietorship?

When setting up a sole proprietorship, it is important to consider the issue of liability. The owner is liable for all liabilities of the company with their entire private assets, meaning business risks can directly impact their personal finances. For this reason, careful risk assessment and adequate protection are of the utmost importance.

What insurance is required for owners of sole proprietorships?

After starting self-employment, it is necessary to register with the relevant social insurance institution (SVA) or SUVA. Only after being recognized as self-employed can social insurance contributions be settled independently.

Contributions to AHV, IV, and EO are mandatory. Depending on the industry and personal situation, additional insurance may be advisable, such as:

• Accident insurance
• Business liability insurance
• Daily sickness allowance insurance
• Occupational disability insurance

What accounting obligations apply to sole proprietorships?

The accounting obligations depend on the annual turnover of the sole proprietorship:

• Up to CHF 500,000 annual turnover:
• Simple accounting in the form of an income and expenditure account with a statement of assets
• From CHF 500,000 annual turnover:
• Obligation to use double-entry bookkeeping with a balance sheet, income statement, and notes in accordance with Art. 957 ff. OR

This regulation contributes significantly to the attractiveness of sole proprietorships in the start-up phase.

How are sole proprietorships taxed?

Sole proprietorships are not subject to double taxation. The profit generated is considered the owner's income for tax purposes and is taxed as part of their personal tax return. Business assets are also added to private assets, making this tax treatment particularly simple and transparent in the initial phase.

Is growth possible with a sole proprietorship?

In principle, it is possible to hire employees and expand business operations. However, third-party participation is not possible, as the sole proprietorship is inseparably linked to the owner.

As soon as partners or investors are to be involved or a limitation of liability is sought, it is advisable to convert to another legal form, such as a limited liability company (GmbH) or a public limited company (AG).

What are the advantages of a sole proprietorship?

The most important advantages of a sole proprietorship can be summarized as follows:

• Very simple and quick to set up
• No minimum capital required
• Low start-up costs
• Full entrepreneurial freedom of decision-making
• No double taxation
• Simplified accounting for low turnover

What disadvantages should be considered?

The advantages are offset by a number of disadvantages:

• Unlimited personal liability
• No possibility of third-party participation
• Regionally limited protection of the company name
• Partially lower perception of professionalism
• More difficult to raise capital

These aspects become particularly important as the company grows.

Can the legal form be changed at a later date?

It is possible to change the legal form of a company at any time, and this is often done in practice. For example, many entrepreneurs first set up a sole proprietorship, before converting it into a limited liability company (LLC) or public limited company (PLC) once their business model has been established and their company has started to grow.

Why is a sole proprietorship a suitable way to start your own business?

For many founders, setting up a sole proprietorship in Switzerland is the most pragmatic way to start their own business. The low administrative effort, low costs, and high flexibility enable efficient implementation and gradual development of business ideas.

Conclusion: Setting up a sole proprietorship in Switzerland

A sole proprietorship is the ideal legal form for anyone who wants to start their own business in an uncomplicated and cost-effective way. It offers maximum freedom, but also requires a high degree of personal responsibility. If you take these aspects into account, a sole proprietorship can provide a solid foundation for entrepreneurial success in Switzerland.