If you happen to be an aspiring owner struck by the impulse to launch your venture in one of Europe’s most industrially advanced nations, this read is tailored to provide you with essential guidance. Here you will definitely find fair courts as well as fairly fair taxation, especially compared to the European Union, which it has not yet joined due to its foreign policy of complete isolation from all other world decisions. Entrepreneurs still think that creating a legal entity within it is quite difficult and expensive, and there are fair reasons to think so. We would like to give you some good thoughts on this matter that will definitely come in handy when opening an enterprise of any format within this small but rich and wealthy society. As you might have guessed from the title, today we will be talking about company formation in Switzerland, which for almost the entire history of its existence has been considered one of the best countries for doing pursuit of any format.
Significant Advantages Awaiting You
The introduction touched upon noteworthy advantages, yet a thorough examination of this facet is essential for a holistic understanding of the possibilities awaiting those equipped with the appropriate knowledge. Consider this a kind of introduction to more serious steps that we will also try to provide later.
Stable Domestic and Foreign Policy Vector of Development
We have already said that it is a model for all other countries, not only in the European Union. In terms of the fairness of legal proceedings and economic stability, it occupies leading positions and can compete even with a giant like the United States of America. Indeed, if we see the inflation of the dollar every year, the Swiss franc can in some cases boast of deflation. People who understand economics often choose this currency for the successful savings of funds at the real level at which they are now. The process of company formation in Switzerland itself becomes important in this regard, as your venture will be economically stable and you will theoretically and practically be able to forget even about global crises, which will definitely not shake this currency, which means your pursuit will grow higher.
Center of Minds
At this point, it is no secret to anyone that Switzerland is a kind of Dubai for richer and smarter entrepreneurs. It is not so easy to open a venture here, but if you try and have a clear goal to do so, combined with professional lawyers, you can do it and it will be very successful. It so happened that it is the place that specialists who have a certain name in their field of science flow to. Weaker specialists simply cannot survive here because the competition among the strongest minds is the fiercest. This means that you will be able to find the best employee for your venture, which means ensuring the same quality that an enterprise is famous for within this territory.
Taxes Are Not a Problem
If one were to presently assemble the select few nations globally perched atop the pinnacle in terms of economic resilience and opulence, and subsequently scrutinize the intricate web of tax policies entwining them, the outcomes could well be a source of considerable amazement. In almost every one of these countries, there is a completely insane tax legislation in the field of entrepreneurial activity. If we take Canada as an example, an entrepreneur must pay huge taxes, in some cases up to 60% of income, just because the income is high. In Norway, the situation is the same, and these countries are among the richest in the world. In the United States of America, tax legislation is slightly softer in terms of the percentage of tax you have to pay, but still, the tax service is very harsh on any entrepreneur, and high criminal terms threaten even in cases of insignificant violation of some detail. In this respect, our country under discussion is moving forward and providing relatively low taxes for all these countries, as well as significant concessions in tax legislation for those who want to start the formation of a company in Switzerland.
Peruse the aforementioned discourse, and one might be inclined to opine that the country indeed manifests itself as a highly propitious domain for the initiation of commercial endeavors. What’s the catch? Basically none, because that’s how the tax laws are. Consider, too, the expansive gateway opening into European markets, courtesy of the country’s closely-knit connections with the European Union. Concurrently, tap into the reservoir of assistance provided by organizations supporting career initiatives. It is in this territory that there is a fragmented network of independent assistance for entrepreneurs after the formation of a company in Switzerland. This kind of arrangement isn’t prevalent in other European nations or the US. Typically, it’s a characteristic of nations with strong social systems, such as Norway or Canada. However, considering the unjust tax scenarios in those places, Switzerland stands out as the prime spot to establish your career.
Formation of a Legal Entity
There are no problems with starting entrepreneurial activity within this principality right now. If we look at the legislation, we can see a huge number of entities and statuses that can currently start this process:
⦁ Citizens: Obviously, citizens can open a firm and create a legal entity through the executive bodies without any problem.
⦁ Residents: Surprisingly, even if you are not a citizen of it or a citizen of the European Union or a broader category of continental cooperation in the form of the European Extended Economy, you still can and have the right to conduct career activities. You just need to get a residence permit to be a resident.
⦁ Investors: You can invest in the country’s economy to obtain residency and formally acquire special status. On this basis, you can freely open a career.
⦁ Experts: Precisely for this reason, minds worldwide converge upon this nation as a focal point of intellectual gravity. You can acquire special status if you are an experienced specialist in any activity. And with the help of this status, you can decorate your income and expenses, forming a legal status.
⦁ Startups: If you are a carrier of a great idea to start some grandiose dealings, you can try to submit your plan to a government agency to obtain a grant to Switzerland company setup and special startup status. The competition is very high, but if you’re lucky and your idea is truly beyond any competition, you have nothing to fear.
You may find it difficult to understand all these norms and legal provisions regarding the status of individuals. That is why contacting a professional is an important step to prevent wasting money on your own mistakes.
Official Start of Activities
Let’s assume you have decided to open a deal with it. You have reviewed and read all the pros, as well as determined your status and realized that you qualify for this. Let’s look at the specific actions you will need to take to open a legal entity.
Step 1: Legal Form of the Venture
Numerous countries present diverse legal frameworks for undertaking dealings endeavors, and the country under consideration is no anomaly. Hence, a selection between two routes becomes imperative for steering into prospective profitable ventures.
⦁ GmbH: You have likely heard of such an entity when reading about some economic and technical startups. Overall, the ease lies in the necessity for a modest share capital, hovering around 20,000 Swiss francs. It’s an excellent avenue for both startups and pre-established companies adhering rigorously to their defined structure.
⦁ AG: This is a kind of joint-stock venture that will primarily seek to obtain external capital as part of continuing its activities. Here you need an amount of share capital five times higher than in the previous type. In any case, if you are going to issue shares and operate using this, then this option is ideal for you, even though it is expensive.
Step 2: Unique Name
Take a close look at how you might name your legal entity. The point to underscore is the heightened sensitivity of this nation towards copyright issues. Therefore, when formulating a name, it becomes pivotal to conceive a nomenclature that avoids any connection with the array of legal entities intertwined in existing accords. The country has even released a government website that will help you with this issue and you can find it freely using the internet.
Step 3: Top Management
Here you will have to strain a little, because you will need to provide personal data for each member of the administrative staff or shareholder who will be in management within your venture. This means that they must be with you in person in the country, and also have valid documents identifying their identities. In some cases, they will also require you to provide solvency and legality of the funds currently held by these individuals.
Step 4: Headquarters
Now you need to find the exact location within the country for it to be your headquarters. This means that you need to rent a certain space and make arrangements with the owner for a long-term cooperation prospect.
Step 5: Charter
The government necessitates that each emerging company meticulously constructs a finely detailed dealings strategy and a form of declaration specifying prospective engagements. You need to try to predict the financial future of your firm, structure, management methods, and all other important factors. You can also delve even deeper and provide, for example, a framework for interaction in protecting the personal data of your customers and employees, which would correlate with the existing European regulator in this area. This is just an example, you will need to do a lot of work here.
Step 6: Lawyer
You will need to find a good lawyer who will be tied to your firm. This is mandatory in the process of formation and setting up of companies in Switzerland because you will still face some legal issues and potential problems every quarter that you will not be able to solve on your own because you simply will not have the significant knowledge that professionals in this field have.
Step 7: Mercantile Catalog
Now you will have to send all these documents to a special state agency in a certain canton where you will be registered so that they can start reviewing your application to establish a legal entity.
Step 8: UID
At the same time, you need to get a UID. This is a kind of identification number for your venture that will be tied to all financial transactions and tax payments. If you don’t get it, you just won’t get the status of a legal entity in any form.
Step 9 (Optional): Financial Repository
It is also preferable for you to open your own financial hub to simplify international transactions and transfers of funds abroad in Switzerland, as well as receipt of funds from foreign capital.
Once you have completed all these procedures, you can start being proud of the fact that you are the owner of a Swiss company. Comply with all legal acts provided not only by the main government but also by local cantons to have no problems in the future. Read in more detail about the fines provided to legal entities in case of violation of one or another insignificant legislative act. This country, like most European ones, has its own unique legislation where some prohibitions that seem illogical or strange to foreigners can be found. In any case, you will have to comply with them, but in order to comply with them at all, you need to study them. So always consult a professional, find a good lawyer who is well-versed in this country, and everything will be fine without any mistakes.
Frequently Asked Questions
What expenses will the company formation on the territory entail?
Tax fees are mandatory within any country. You will have to pay about 600 francs to initiate registration. This is the standard price, which can be increased within certain cantons where you are going to operate. You also need to keep money with you at all times, because in the framework of various legal issues and paperwork, you may also need to pay for a particular notarized procedure.
Can a foreigner open a company?
You can do this without any problems, provided that you have obtained a legal status of stay in the country. You can do this in various ways, including requesting a residence permit based on your ingenious idea for a startup, if you have one.
How to set up a company?
To summarize, you just need to define the management structure of your company, financial features, long-term planning, identify individuals from senior management, obtain all necessary tax papers and UID, and then send the whole thing for consideration to the state service of your canton. Do not forget to rent territory to enter the address of the company’s head office. Once the response is received, you can be sure that your legal entity will operate.
What is the company structure in the country?
As in all other countries, you can be sure that there are many different legal structures here so that they function properly. We have already listed the two main ones, and you can choose exactly them. They are also the most popular and easy to open a business that does not require any specific licenses to operate and does not require additional bureaucratic procedures.
