Legal and compliance for Swiss startups

Swiss startups must fulfill various legal and compliance requirements: commercial register entry, data protection (DPA), anti-money laundering law (AML), sector-specific regulations and labor law. Compliance is existential for business success.

The legal and regulatory environment for startups in Switzerland is complex and requires professional guidance. Here is a comprehensive overview:

Basic legal requirements:

Commercial register entry:

• Mandatory for: LLC, Corporation, cooperatives
• Sole proprietorships: From CHF 100,000 annual turnover
• Required documents: Articles of incorporation, identity documents, capital proof
• Processing time: 5-15 working days
• Costs: CHF 500-800 plus notary fees
• Publication: Swiss Official Gazette of Commerce

Articles of incorporation and bylaws:

• Notarial authentication: Mandatory for LLC and Corporation
• Minimum content: Purpose, domicile, capital, organs
• Amendments: Resolution and commercial register notification
• Costs: CHF 1,000-5,000 for drafting
• Adaptations: Required during business development

Data protection and information security:

Data Protection Act (DPA):

• Scope: All personal data processing
• Principles: Lawfulness, proportionality, transparency
• Information obligations: Clear privacy policy
• Data subject rights: Information, rectification, erasure
• Sanctions: Fines up to CHF 250,000
• Data protection officer: Required for high risks

EU GDPR compliance:

• Extraterritoriality: Also relevant for Swiss companies
• Market place principle: Applicable to EU customers
• Higher fines: Up to 4% of annual worldwide turnover
• Additional obligations: Privacy by Design, data protection impact assessment
• Representative: EU representative for direct processing

Anti-Money Laundering Act (AML):

Affected sectors:

• Financial service providers: Banks, insurance, fintech
• Financial intermediaries: Asset managers, fiduciaries
• Trade: Precious metals, luxury goods from CHF 100,000
• Real estate: Brokers, transactions
• Cryptocurrencies: Exchanges, wallets

Due diligence obligations:

• Customer identification: Know Your Customer (KYC)
• Beneficial owner: Economically entitled person
• Risk assessment: Continuous monitoring
• Reporting obligations: Suspicious transaction reports to MROS
• Documentation: 10-year retention
• Training: Regular employee training

Labor law:

Employment contracts:

• Written form: Recommended for legal certainty
• Minimum content: Parties, function, salary, working time
• Probation period: Maximum 3 months
• Dismissal protection: Observe blocking periods
• Collective agreements: Sector-specific regulations

Social insurance:

• Registration obligation: Within 30 days of employment start
• AHV/IV/EO: 10.6% contribution rate
• ALV: 2.2% up to CHF 148,200
• Accident insurance: Via private insurers
• Family allowance fund: Child allowances

Sector-specific regulations:

Fintech and banking:

• FINMA regulation: Financial market supervision
• Banking Act: Authorization requirement from certain thresholds
• Payment service providers: License required
• Cryptocurrencies: DLT Act and ordinance
• Crowdfunding: Prospectus obligation from CHF 8 million

Medtech and pharma:

• Swissmedic: Authorization authority for medical devices
• Therapeutic Products Act: Strict requirements
• Clinical trials: Ethics committee approval
• CE marking: European conformity
• Quality management: ISO 13485 standard

E-commerce and digital:

• Telecommunications Act: Telecommunications regulation
• E-commerce directive: Information obligations
• Copyright: Protect digital content
• Consumer protection: Right of withdrawal, T&C control
• Cookies: Consent required

Compliance management system:

Building a CMS:

• Risk analysis: Identification of relevant risks
• Policies: Develop internal guidelines
• Processes: Define clear procedures
• Training: Employee awareness
• Monitoring: Continuous surveillance
• Reporting: Regular reports

Documentation:

• Compliance manual: Central documentation
• Process instructions: Detailed procedures
• Checklists: Practical tools
• Training materials: Employee information
• Audit protocols: Evidence

Contract law:

Important contract types:

• Customer contracts: T&C, service contracts
• Supplier contracts: Procurement, SLAs
• Employment contracts: Employment, freelance
• IP contracts: Licensing, confidentiality
• Investor contracts: Financing, participation

Contract drafting:

• Clear definitions: Define terms unambiguously
• Service description: Fix scope precisely
• Liability regulation: Distribute risks appropriately
• Warranty: Realistic commitments
• Jurisdiction: Clarify competence

Intellectual property:

Protection rights:

• Trademarks: Registration with IPI
• Patents: Technical inventions
• Designs: External configuration
• Copyright: Automatic protection
• Trade secrets: Confidential information

IP strategy:

• Freedom to operate: Check existing rights
• Protection portfolio: Systematic construction
• Licensing: Commercial exploitation
• Enforcement: Legal pursuit
• International strategy: Worldwide protection

Costs and budgeting:

Legal costs for startups:

• Formation: CHF 3,000-10,000
• Ongoing advice: CHF 5,000-20,000 per year
• Compliance system: CHF 10,000-50,000
• Contract drafting: CHF 1,000-5,000 per contract
• IP protection: CHF 2,000-10,000 per filing

Cost optimization:

• Preventive advice: Recognize problems early
• Standardization: Reusable documents
• Internal competence: Build basic knowledge
• External specialization: Experts for special topics

Compliance audits:

Internal audits:

• Regular checks: Quarterly or annually
• Checklists: Systematic control
• Documentation: Audit protocols
• Measures: Implement improvements

External audits:

• Industry certifications: ISO, SOC2
• Regulatory audits: FINMA, Swissmedic
• Customer audits: Due diligence
• Preparation: Structured approach

Crisis management:

Compliance violations:

• Immediate measures: Damage limitation
• Cause analysis: Systematic processing
• Authority communication: Proactive information
• Prevention: System improvement

Legal disputes:

• Mediation: Out-of-court settlement
• Arbitration: Alternative dispute resolution
• Court proceedings: Last option
• Insurance coverage: Legal protection insurance

Digitalization and Legal Tech:

Digital tools:

• Contract management: Contract administration
• Compliance software: Automated monitoring
• Document management: Secure archiving
• Legal research: Legal information

Advantages:

• Efficiency: Automation of repetitive tasks
• Transparency: Better overview
• Compliance: Automatic reminders
• Costs: Reduction of personnel effort

International expansion:

Cross-border compliance:

• Local laws: Country-specific requirements
• Double taxation: Use tax treaties
• Transfer pricing: Fair pricing
• Export control: Trade restrictions

Structural considerations:

• Holding structure: Optimal group organization
• Branches: Representation vs. subsidiary
• Tax optimization: Legal structuring possibilities
• Risk management: Jurisdictional risks

Conclusion: A thoughtful compliance system is essential for the long-term success of startups. Early investments in legal structures and processes pay off through risk minimization and competitive advantages.