Setting up a sole proprietorship in Switzerland: costs and legal steps

From registering in the commercial register to running costs and insurance, you will find everything you need to know here.

If a sole proprietorship is not the right legal form for you, take a look at the advantages and disadvantages of a LLC or PLC.

‍

1. Costs of setting up a sole proprietorship

1.1. Entry in the commercial register

Registering a sole proprietorship in the commercial register is not always necessary. Companies with an annual turnover of less than CHF 100'000 are exempt from the registration requirement. However, if you want to present your business activities as reputable and professional or are legally obliged to register (in the case of a higher turnover), the following costs will apply:

• Commercial Register entry: The fees for entry in the Commercial Register vary from one canton to another and usually range from CHF 200 to 400.

1.2. Notary fees

No notary fees are required to set up a sole proprietorship, as the act of incorporation requires a notary. This significantly reduces the cost of setting up.

1.3. Business licenses

Depending on the type of business, you may need a specific business license. These vary greatly depending on the industry (e.g. gastronomy, transport or healthcare) and the requirements of the respective canton. The costs for these licenses can range from 50 to 1'000 CHF.

^{Book a consultation with Startups.ch}

‍

2. Running costs of a sole proprietorship

2.1. Social security

As an entrepreneur, you are obliged to pay social security contributions. These include:

• AHV/IV/EO contributions (old-age and survivors' insurance, disability insurance, compensation for loss of earnings): self-employed persons in Switzerland must pay AHV/IV/EO contributions. These contributions amount to around 10% of net income.
  
• Accident insurance: As the owner of a sole proprietorship, you are also obliged to take out accident insurance. This protects you in the event of an accident during working hours.

2.2. Health insurance contributions

As the owner of a sole proprietorship, you are not covered by compulsory company health insurance, but must take out private insurance. The costs for this depend on your personal insurance tariff, but usually start at around CHF 300-500 per month.

‍

3. Legal steps for setting up a sole proprietorship

3.1. Registering with the AHV

Regardless of whether you are entered in the commercial register or not, you must register with the AHV as a self-employed person. This can be done at your cantonal compensation office and is an essential step to be officially recognized as self-employed.

3.2. Value added tax (VAT)

Businesses that generate an annual turnover of more than CHF 100'000 are obliged to register for value added tax (VAT). Registration is done with the Federal Tax Administration (FTA). Businesses that remain below this limit can voluntarily register for VAT in order to deduct their business expenses for tax purposes.

3.3. Business insurance

While it is not required by law, it is highly recommended that you, as the owner of a sole proprietorship, take out various types of insurance to protect your business. These include:

• Professional liability insurance: Covers damages caused by you or your business to third parties. The cost of such insurance depends on the industry, but starts at around CHF 300-500 per year.

^{Book a free insurance consultation}

‍

4. Completing the setup

4.1. Tax registration

After setting up your sole proprietorship, you must ensure that you register with the tax authorities correctly. You will need to declare both personal and business income on your tax return. It is important that you keep clean records of business expenses from the outset in order to take advantage of tax breaks.

^{Tax tips for start-ups}

4.2. Business management

Although there is no obligation for a sole proprietorship to keep double-entry books, it is recommended to keep clear and accurate records. This not only helps you to keep track of your business, but is also beneficial for the tax authorities.

4.3. Foundation with startups.ch

If you decide to go through the foundation process with professional support, you can use the services of Startups.ch. We will guide you before, during and after the establishment of your sole proprietorship.

^{Calculate non-binding offer}

‍

Conclusion

The advantage of a sole proprietorship is that it can be set up quickly and inexpensively. Compared to other legal forms, the costs are minimal and the administrative burden remains low. However, you should be aware of the personal liability and, if necessary, consider taking out insurance to protect yourself from risks.

Would you like to set up your sole proprietorship with support? Startups.ch will guide you through all the necessary steps and help you to make the process simple and smooth.

^{Set up your sole proprietorship now}