How do I start a company in Switzerland?

Establishing a company in Switzerland requires attention to specific legal and administrative steps. Here is a structured guide:

1. Choose Legal Form

Sole Proprietorship (Einzelunternehmen)

• Persons: One natural person
• Minimum Capital: CHF 0
• Commercial Register Entry: Only required for turnover over CHF 100,000 per year
• AHV Registration: Required for self-employment status
• Suitable for: Smaller businesses with low liability risk

Limited Liability Company (GmbH)

• Persons: One or more natural/legal persons
• Minimum Capital: CHF 20,000
• Formation: Constituent meeting before notary required
• Commercial Register Entry: Mandatory
• Capital Payment: Full payment required at formation
• Suitable for: Medium-sized companies with limited liability

Corporation (Aktiengesellschaft/AG)

• Persons: One or more natural/legal persons
• Minimum Capital: CHF 100,000
• Formation: Constituent meeting before notary required
• Commercial Register Entry: Mandatory
• Taxation: Profits and dividends are taxed
• Suitable for: Larger companies with capital requirements

2. Execute Formation Process

For Sole Proprietorship:

• Complete registration form at compensation fund
• Submit required documents:
  • Copies of issued invoices
  • Concluded contracts
  • Offers
  • Letterhead
  • Lease agreement
  • Liability insurance

For LLC (GmbH) and Corporation (AG):

Step 1: Check Company Name Availability

Verify name availability through central company index and ensure uniqueness.

Step 2: Deposit Capital at Bank on Capital Payment Account

• AG: CHF 100,000
• GmbH: CHF 20,000

Step 3: Sign Public Deed Before Notary

Notarial certification of formation documents and articles of association.

Step 4: Determine Corporate Organs:

• AG: Board of Directors + Audit Body (except with opting-out)
• GmbH: Management + Audit Body (except with opting-out)

Step 5: Apply for Commercial Register Entry

Submit all required documents for official registration.

Opting-out possible: With fewer than 10 full-time employees

3. Conclude Insurance Policies

Employee Insurance:

• Choose AHV fund and register as employer

Mandatory Insurance:

• AHV (Old Age and Survivors' Insurance)
• IV (Disability Insurance)
• ALV (Unemployment Insurance)
• BVG (2nd Pillar): For annual salary over CHF 21,150
• Accident Insurance (UVG):
  • Under 8h/week: only occupational accidents
  • Over 8h/week: occupational and non-occupational accidents

Company Insurance:

• Liability Insurance
• Daily Allowance Insurance for illness
• Property Insurance (fire, theft, water damage, glass breakage)
• Legal Protection Insurance

4. Set Up Accounting

Basic Requirements:

• Legal Obligation: Bookkeeping is mandatory
• Value Added Tax: Registration required for turnover over CHF 100,000 per year
• Reporting: Quarterly or semi-annually
• Documents: Keep all invoices from business commencement

Annual Closings:

• Close accounts
• Create balance sheet
• Prepare profit and loss statement
• AG additionally: Notes to financial statements
• Prepare tax return

Recommendations:

• Professional help when lacking experience
• Use accounting software
• Continuous recording throughout the year

5. Create Business Plan

Structure of Business Plan:

Descriptive Part:

• Market Analysis
• Target Group
• Competitive Environment

Business Model:

• Market Opportunities
• Needs and Demand
• Benefits of Solution
• Team and Skills
• Products and Services

Financial Part:

• Financing Requirements
• Revenue Forecasts
• Cost Planning
• Various Scenarios

Important Cost Factors:

• Salaries and social contributions
• Maintenance costs
• Communication and marketing costs
• Rent for business premises
• Taxes and interest
• Insurance

Timeline and Costs

Formation Duration:

• Sole Proprietorship: 1-2 weeks
• LLC/Corporation: 7-14 days (with professional support)

Basic Costs:

• Sole Proprietorship: Minimal costs (mainly AHV registration)
• LLC: CHF 20,000 minimum capital + formation costs
• Corporation: CHF 100,000 minimum capital + formation costs

Detailed Cost Breakdown

Sole Proprietorship Formation Costs:

• AHV Registration: Free
• Commercial Register Entry: CHF 120-150 (optional)
• Insurance: CHF 500-2,000 annually
• Total Minimum: CHF 500-1,000

LLC Formation Costs:

• Share Capital: CHF 20,000
• Notary Fees: CHF 500-2,000
• Commercial Register: CHF 600-800
• Professional Support: CHF 500-2,000
• Total Minimum: CHF 21,500-25,000

Corporation Formation Costs:

• Share Capital: CHF 100,000 (minimum CHF 50,000 paid-in)
• Notary Fees: CHF 800-2,500
• Commercial Register: CHF 600-800
• Professional Support: CHF 1,000-4,000
• Total Minimum: CHF 52,500-58,000

Legal Form Comparison Matrix

| Feature                    | Sole Proprietorship | LLC (GmbH)      | Corporation (AG) |
|----------------------------|---------------------|-----------------|------------------|
| **Minimum Capital**        | CHF 0               | CHF 20,000      | CHF 100,000      |
| **Liability**              | Unlimited           | Limited         | Limited          |
| **Formation Complexity**   | Simple              | Medium          | Complex          |
| **Administrative Burden**  | Low                 | Medium          | High             |
| **Tax Treatment**          | Personal income     | Double taxation | Double taxation  |
| **Transferability**        | Difficult           | Moderate        | Easy             |
| **Investor Appeal**        | Low                 | Medium          | High             |

Important Tips for Successful Formation

Strategic Considerations:

• Choose legal form carefully: Based on business model and risks
• Professional advice: Especially for complex structures
• Realistic planning: Don't underestimate expenses, don't overestimate income

Operational Excellence:

• Documentation: Systematically collect all receipts and contracts
• Continuous accounting: Maintain proper records from the beginning
• Insurance coverage: Comprehensive protection for company and employees

Compliance Management:

• Legal obligations: Fulfill all regulatory requirements
• Tax planning: Optimize tax structure from formation
• Regular reviews: Monitor changing legal requirements

Step-by-Step Formation Checklist

Pre-Formation Phase:

• Develop business concept and plan
• Choose appropriate legal form
• Secure adequate financing
• Research market and competition
• Identify required permits and licenses

Formation Phase:

• Reserve company name
• Open capital payment account (LLC/AG)
• Prepare articles of association
• Complete notarial certification
• Submit Commercial Register application
• Register with tax authorities

Post-Formation Phase:

• Open business bank account
• Register for social insurance
• Set up accounting system
• Conclude necessary insurance policies
• Obtain business permits
• Register for VAT (if applicable)

Regulatory Compliance Requirements

Commercial Register Obligations:

• Mandatory registration for LLC and AG
• Optional registration for sole proprietorships over CHF 100,000 turnover
• Annual updates for changes in company information
• Publication requirements in Swiss Official Gazette

Tax Obligations:

• Corporate income tax for LLC and AG
• Personal income tax for sole proprietorships
• VAT registration from CHF 100,000 annual turnover
• Withholding tax on profit distributions

Social Insurance Requirements:

• AHV/IV/EO for all employees and self-employed
• Unemployment insurance for employees
• Occupational pension for qualifying salaries
• Accident insurance mandatory coverage

Professional Services and Support

When to Seek Professional Help:

• Complex business structures requiring specialized knowledge
• International operations with cross-border implications
• Regulated industries with specific licensing requirements
• Tax optimization strategies and planning

Types of Professional Support:

• Legal counsel for formation and compliance
• Tax advisors for optimization strategies
• Accounting services for bookkeeping and reporting
• Business consultants for strategic planning

Common Formation Mistakes to Avoid

Planning Errors:

• Insufficient capitalization beyond minimum requirements
• Unrealistic financial projections and market assumptions
• Inadequate risk assessment and mitigation planning

Legal and Compliance Issues:

• Incorrect legal form selection for business needs
• Missing permits and licenses for specific activities
• Inadequate corporate governance structure

Financial Management Problems:

• Poor accounting practices from inception
• Mixing personal and business finances
• Inadequate insurance coverage for risks

Conclusion

Company formation in Switzerland is a structured process that can be successfully completed with careful planning and implementation. The choice of appropriate legal form, proper formation steps, adequate insurance coverage, professional accounting, and a well-thought-out business plan are the cornerstones of successful business establishment.

Key Success Factors:

Strategic Foundation:

• Clear business vision and realistic market assessment
• Appropriate legal structure matching business needs
• Adequate capitalization for sustainable operations

Operational Excellence:

• Professional compliance with all legal requirements
• Robust financial management from day one
• Comprehensive risk management and insurance coverage

Growth Preparation:

• Scalable business processes and systems
• Professional advisory relationships for ongoing support
• Regular review and optimization of business structure

Switzerland offers an excellent business environment with stable legal framework, favorable tax conditions, and access to international markets. Success depends on thorough preparation, professional execution, and ongoing compliance with regulatory requirements.