Which legal structure should a cross-border worker choose?

What is the best legal structure for a cross-border worker setting up a company in Switzerland?

The answer depends on three main criteria: the capital you are prepared to invest, the level of liability you accept, and the intended size of your activity. For a simple solo activity, the sole proprietorship is the quickest and least costly solution. To protect your personal assets and bring in partners, the LLC or PLC are preferable. Here is a detailed analysis of each legal structure.

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The sole proprietorship: simplicity above all

The sole proprietorship is the simplest structure for carrying out a self-employed activity in Switzerland. It requires no minimum capital and registers with the Commercial Register only if annual turnover exceeds CHF 100,000. Registration is possible before this threshold on a voluntary basis. The sole proprietorship has no distinct legal personality: the entrepreneur and their company are merged legally and fiscally. This means that a creditor can seize the entrepreneur's personal assets in the event of professional debts. For a cross-border worker, the sole proprietorship is simple to manage but carries significant asset risks.

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The LLC: the ideal solution for small and medium-sized enterprises

The Limited Liability Company (LLC) is the most widespread structure in Switzerland for SMEs. It offers liability limited to the share capital (minimum CHF 20,000), thus protecting the personal assets of the partner. The LLC is managed by one or more managers; at least one manager must be domiciled in Switzerland. For a cross-border worker, this means they must either reside in Switzerland (which is not compatible with cross-border status), or appoint a co-manager domiciled in Switzerland, who may be a fiduciary or a trusted partner. The partners of the LLC are registered with the Commercial Register, which provides transparency on the shareholder structure.

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The PLC: for ambitious projects and fundraising

The Public Limited Company (PLC) is the reference legal structure for large companies and those that plan to raise funds. Its minimum capital is CHF 100,000, of which at least CHF 50,000 must be paid up at the time of incorporation. The PLC offers liability limited to shareholders' contributions. Shares may be registered or bearer shares (within certain limits). For a cross-border worker, the PLC is interesting because shareholders do not necessarily need to be domiciled in Switzerland. However, at least one member of the board of directors with individual signatory power must be domiciled in Switzerland. The PLC is more costly to incorporate and administer than the LLC.

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Comparative table of the three legal structures

• ‍Sole proprietorship: Minimum capital: none. Liability: unlimited on personal assets. Swiss domicile required: no, but the director must be active in Switzerland. Cost of incorporation: low (< CHF 1,000). Recommended for: low-risk activities, starting out.‍
• LLC: Minimum capital: CHF 20,000. Liability: limited to capital. Swiss domicile required: yes, for at least one manager. Cost of incorporation: CHF 2,000 to 4,000. Recommended for: SMEs, commercial activities, asset protection.‍
• PLC: Minimum capital: CHF 100,000 (CHF 50,000 paid up). Liability: limited to capital. Swiss domicile required: yes, for at least one director with individual signature. Cost of incorporation: CHF 3,000 to 6,000. Recommended for: ambitious projects, fundraising, international image.

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Our recommendation for a cross-border worker

For the majority of cross-border workers wishing to set up a first company in Switzerland, the LLC represents the best compromise between asset protection, reasonable incorporation cost and management simplicity. It is essential to plan from the outset for a manager domiciled in Switzerland, a role often entrusted to a partner fiduciary. If you have a more ambitious project requiring investors or a more scalable structure, the PLC will be more appropriate, despite its higher cost.

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FAQ - Which legal structure should a cross-border worker choose?

What is the difference between an LLC and a PLC in Switzerland?

The LLC (minimum capital CHF 20,000) is managed by managers whose names appear in the Commercial Register. The PLC (minimum capital CHF 100,000) is administered by a board of directors; shareholders are not necessarily registered with the CR. The PLC is better suited for attracting investors or issuing bonds. For a starting cross-border worker, the LLC is generally recommended.

Can I use my occupational pension (LPP/2nd pillar) as capital contribution to set up an LLC?

The LPP (2nd pillar) can be withdrawn early to finance a self-employed activity, under certain conditions. The 3rd pillar A can only be withdrawn in specific cases (retirement, property purchase, departure abroad). These funds can serve as cash contributions to share capital. It is strongly recommended to consult a specialist before any withdrawal process.

Can I contribute physical assets (vehicles, equipment) as capital for an LLC?

Yes, contributions in kind are possible to constitute the capital of an LLC or PLC. The assets must be valued by a recognised independent expert. A contribution report is required. The contributed assets become the property of the company (you no longer own them personally), but you can use them professionally according to the articles of association.

Is it more advantageous to set up my LLC in Vaud or Fribourg as a cross-border worker?

Both cantons are attractive. Vaud offers easy access to services and moderate taxation (effective rate around 14-15%). Fribourg is slightly cheaper fiscally and administratively. For a cross-border worker residing in France, the location of the registered office affects the company's taxation, but not necessarily your personal tax in France. A comparative analysis is recommended.

Is there a legal structure that does not require a Switzerland-domiciled manager?

No, neither the LLC nor the PLC allows you to avoid the requirement for a legally domiciled representative in Switzerland. For the LLC, at least one manager with representation power must be domiciled in Switzerland. For the PLC, at least one director with individual signature must be. The sole proprietorship does not involve this criterion, but it offers no personal asset protection.

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