Setting up a company in Switzerland comes with strict rules, paperwork-heavy procedures, and significant regional differences that can affect everything from your taxes to your timeline. Below, we break down the essentials to help you avoid common pitfalls and start your Swiss venture correctly.
Starting a business in Switzerland means selecting the right canton for your operations, preparing precisely to follow the incorporation process, choosing the right bank and being clear about VAT registration after setup.
At Prism we guide entrepreneurs through the entire process of setting up a company including cooperating with banks, ensuring accounting is on par and simplifying visa application processes. Here is our guide to relocating to Switzerland to start a company.
Choose the right company structure
The most common legal structures for foreign entrepreneurs in Switzerland are:
AG (Aktiengesellschaft) / SA (Société Anonyme) / Public Limited Company (Corporation): This structure requires a minimum share capital of CHF 100,000, with at least CHF 50,000 paid up at the time of incorporation. The AG/SA is by far the mostly used company type for small to very large businesses.
GmbH (Gesellschaft mit beschränkter Haftung) / SARL (Société à responsabilité limitée) / Limited Liability Company: This structure requires a minimum share capital of CHF 20,000, which must be fully paid up. It’s a popular choice for small family owned businesses like painters or carpenters, but can also be medium-sized businesses due to its relatively low capital requirement.
Both structures typically require at least one director residing in Switzerland. This means if you are not a Swiss resident (OR 718 Abs. 4), you’ll need to appoint a local representative or a nominee director to fulfill this legal requirement.
VAT and corporate tax registration
Once registered, companies must enroll for VAT if their annual taxable turnover exceeds CHF 100,000. VAT filing is typically quarterly and can be managed digitally through the Swiss tax portal.
Corporate income tax rates vary as it’s levied at three distinct levels: federal, cantonal, and communal. The federal corporate income tax is 8,5% on profit after tax.
Once the cantonal and communal corporate income tax has been added the overall effective tax rates range from approximately 15% to over 21%. This multi-tiered taxation system makes your choice of location a critical factor in your overall tax strategy.
Contact us to find out more about how to plan your Swiss tax strategy.
How to decide in which canton to start your business?
Each of Switzerland’s 26 cantons enjoys a high degree of autonomy, setting its own corporate tax rates, administrative rules, and even tax at source rates. For example, Zug and Lucerne are renowned for their highly business-friendly environments and some of the lowest tax rates in the country, attracting many international companies.
Conversely, Zurich offers a robust infrastructure, a large talent pool, and access to a major financial hub, albeit at a slightly higher cost of doing business. Your choice of canton can profoundly impact everything from administrative speed and ongoing operational costs to how attractive your business appears to potential investors.
Timeline and bureaucracy when starting a Swiss company
The timeline for company incorporation in Switzerland can vary based on your level of preparation and the specific canton you choose. If all documentation is perfectly prepared and submitted, registration can theoretically take around 2–4 weeks. It is important to know that share capital must be paid into a Swiss bank account before incorporation, so make sure to calculate enough time to find a suitable bank who will open the incorporation account. Our clients profit from our large network with banks, so this would not delay the company incorporation process much more.
However, incomplete documentation, the need for certified translations, or missing approvals can easily delay the process by months. Common roadblocks include:
- Delays in obtaining notarized documents or apostilles.
- Missing declarations from shareholders or proof of capital deposit.
- An unclear or too broad business purpose outlined in the application.
- Challenges in opening a corporate bank account without a physical presence or a local director.
Avoid costly mistakes as an entrepreneur in Switzerland
Swiss authorities expect precision and strict adherence to regulations. Submitting the wrong form, overlooking a required document, or failing to clearly define your business activity can result in a rejected application or weeks of costly delays.
This is where professional guidance becomes invaluable. Working with an experienced consultancy can help streamline the setup process, avoid regulatory missteps, ensure compliance, and connect you to the right local partners, including legal and banking contacts.
Our clients are entrepreneurs focused on developing their business or wealthy families or individuals who wish to manage their wealth through a Swiss company. They do not want to spend time managing administrative tasks and fighting through complex bureaucracy.
At Prism, we understand the complexities of international relocation and business setup. With over 20 years of industry experience and offices worldwide, including Switzerland, we offer a comprehensive suite of services designed to make your move to Switzerland seamless and successful.
Our team at Prism Visas has helped hundreds of entrepreneurs and businesses establish successful operations in Switzerland and beyond. From entity registration and legal representation to accounting and comprehensive relocation support, we’re your trusted, one-stop partner on the ground.
Read more about our company incorporation services here.
