Setting up a company in Switzerland: a complete guide

Before starting a company in Switzerland, it is important to become familiar with the legal and administrative requirements. You should carefully validate your business idea, analyze the competition, and define your target audience. A business plan can help you structure your idea and provide potential investors and partners with a clear overview. In this article, you will learn everything you need to successfully navigate the founding process and choose the right legal form for your business.

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1.1. Competition

Research whether there is already competition. If so, the idea seems to work if the competition is successful. So think about how you can differentiate yourself.

If there is no competition yet, that's also cool because you want to do something new. But here you have no proof that the idea is plausible.

1.2. Questions

Before you start, it is important to ask yourself the following questions:

• For whom and how do I add value?
• How large is my target group?
• How much would potential customers pay for my service/product?

1.3. Feedback is Kind

Talk to friends and family or potential customers about your business idea.

1.4. Business plan

Create a business plan if you want to reflect on and structure your business idea.

A business plan is not absolutely necessary to found a company, but it will help investors, banks and partners to get a better idea of your business idea.

^{Create a business plan}

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2. Legal forms for setting up a company in Switzerland

Choosing the right legal form is an important step in setting up a company. Here are the most common legal forms:

2.1. Setting up a sole proprietorship in Switzerland

The sole proprietorship is the perfect legal form for testing a business idea. It is particularly suitable for individuals with little start-up capital.

• Advantages:
  • No capital necessary
  • Low administrative costs
  • Access to 2nd/3rd pillar possible
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• Disadvantages:
  • Personal liability
  • No unemployment insurance possible
  • No third-party participation possible
  • The company name must include the family name of the owner.
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• Costs and legal steps: A sole proprietorship can be registered quickly and easily with the cantonal commercial registry office. The costs for entry in the commercial registry are approximately CHF 150–250. Entry in the commercial registry is mandatory if the business is of a commercial nature and the annual turnover exceeds CHF 100'000.
  However, the sole proprietorship must be registered with the relevant compensation office in any case.
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• Set up a sole proprietorship with Startups.ch: Startups.ch will guide you through every step of setting up your sole proprietorship.

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2.2. Set up an LLC in Switzerland

The LLC is best suited to limit the liability of the founders.

• Advantages:
  • No personal liability
  • Participation of third parties possible
  • Lower minimum capital than for a PLC
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• Disadvantages:
  • Minimum capital CHF 20'000
  • Shareholders are not anonymous
  • Company law provisions
  • Double taxation for shareholders
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• Costs and legal steps: A minimum of CHF 20'000 in start-up capital is required to found an LLC, plus the costs of opening a blocked account, any costs for advice on the foundation, notary fees and fees for entry in the commercial register.
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• Set up a LLC with Startups.ch: Use the services of Startups.ch to make the LLC formation process quick and efficient.

^{Set up an LLC}

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2.3. How to set up a PLC in Switzerland

The PLC is ideal for larger companies or those that want to raise capital from investors.

• Advantages:
  • No personal liability
  • Participation of third parties possible
  • Easy transfer of shares
  • Anonymity of shareholders
  • Reputation
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• Disadvantages:
  • High minimum capital
  • Corporate law provisions
  • Double taxation for shareholders
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• Costs and legal steps: To found an AG, CHF 100'000 (partial payment possible from CHF 50'000) in start-up capital is required, plus the costs for opening the blocked account, possibly costs for advice on the foundation, notary fees and fees for entry in the commercial register.
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• Set up a PLC with Startups.ch: Startups.ch helps you set up your PLC.‍

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2.4. Setting up a general partnership in Switzerland

The general partnership is a legal form that is particularly suitable for small businesses with several partners. The partners have unlimited and joint liability for the company's liabilities.

• Advantages:
  • No capital required
  • Low administrative costs
  • Fancy name
  • 2nd/3rd pillar pension benefits possible
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• Disadvantages:
  • Personal, joint and several liability
  • No unemployment insurance possible
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• Costs and legal steps: The formation process is comparatively inexpensive because no minimum capital is required.
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• Forming a general partnership with Startups.ch: Startups.ch supports you in the formation process so that you can concentrate on building and growing your business.‍

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3. Setting up a company in Switzerland

After you have set up your company, the following points must be observed:

3.1. Accounting

Accounting is important to measure the success of your company. There is a double accounting obligation for corporations and a single accounting obligation for sole proprietorships up to an annual turnover of CHF 500'000. If the accounting is done correctly, tax advantages can be exploited.

As part of the accounting, for example, invoices must be created, debtors and creditors must be entered, payroll accounting must be created, VAT returns must be made, the annual financial statements must be created and the tax return must be submitted.

^{Bookkeeping bascis for start-ups}

3.2. Value added tax liability

Companies that generate a turnover of CHF 100'000 per year (at home and abroad) must register for VAT. This should be done as soon as possible after the company is founded.

3.3. Insurance

The following insurance policies are recommended after the company is founded:

• Property insurance
• Personal insurance
• Legal protection
• Vehicle insurance
• Liability insurance
• Provisional insurance

AXA, exclusive partner of Startups.ch for all insurance matters, offers you a free consultation to clarify the insurance needs of your current or future company.

^{Make an appointment}

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4. Financing options for your company in Switzerland

In addition to equity capital, there are several options for financing your company in Switzerland.

4.1. Bank loans

Swiss banks offer special loans for company founders that can be used to build up the company.

4.2. Investors and venture capital

For innovative startups, venture capital can be an attractive financing option. Investors offer capital in exchange for company shares.

4.3. Crowdfunding

Crowdfunding is a modern financing method that allows you to collect capital from a wide range of people.‍‍

^{Financing start-ups and SMEs}

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5. Tax aspects of setting up a company in Switzerland

Switzerland offers a favorable tax system for companies. The tax burden varies by canton, so it is worth examining the tax advantages of different regions.

^{Tax tips for start-ups}

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6. Tips for foreign founders who want to start a company in Switzerland

As a foreign citizen, you must meet certain requirements to start a company in Switzerland. This usually includes a residence permit. You should also familiarize yourself with the tax and legal regulations.

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Conclusion

Setting up a company in Switzerland is an easy process with the right information and support. Startups.ch will help you to make the founding process smooth and to successfully start your company in Switzerland.

^{Start my own business}

^{Free tools and guides}