How to Start a Business in Switzerland

Switzerland’s strong economy is attractive for entrepreneurs who wish to start a new business. Switzerland is also an appealing location for foreign investors and entrepreneurs because of its strategic location in central Europe, strong economy, excellent infrastructure, and highly skilled workforce.

This said, foreigners must meet Switzerland’s qualifying conditions to launch their new business idea. It’s vital therefore for prospective new business owners to understand Swiss business regulations and how their business might fit into the existing commercial landscape.

Why Start a Business in Switzerland?

Switzerland offers a great backdrop for foreigners and expats who meet Switzerland’s entry requirements to open new businesses. Switzerland is home to many big-name multinationals and a huge player on the world scale in industries like financial services and pharmaceuticals. These factors make Switzerland a diverse and dynamic place for businesses to prosper.

Switzerland is also an appealing place for small businesses and startups. In fact, over 99% of Switzerland’s 330,000 businesses are small and medium enterprises (SME) with less than 250 employees.

Why Are Foreign Businesses Attracted to Switzerland?

There are many reasons for foreign businesses to head to Switzerland:

• Its strong economy and high living standards make it a great place to conduct business across many different sectors.
• Its financial system is well-developed and offers access to European and global markets.
• Switzerland offers one of the lowest corporate tax rates in Europe for business with a 19.7% rate in 2024.
• Switzerland has long been recognized for its stability and neutrality. This provides a safe, stable, and reliable business environment.
• Setting up a new company in Switzerland is fast and simple and the whole process can be done online.
• Its central European location makes doing national and international business easy. Businesses with a merchant services account can take advantage of Switzerland’s strategic location to accept different payment methods and different currencies.

Who Can Start a Business in Switzerland?

People without Swiss nationality can start a business only if they have the right to reside and work in Switzerland. Setting up certain business entities requires at least one domiciled director authorised to sign off on the business’s operations if the other directors live outside the country.

Can Foreigners Start a Business in Switzerland?

Yes, foreigners can start a business in Switzerland if they meet the entry requirements. Switzerland limits the number of foreign workers allowed to enter the country. However, this policy is in stark contrast to the reality that the country wishes to attract enterprise and innovation.

You should be able to find a way to start a business in Switzerland if you can show a great business plan backed up with market research, excellent prospects, and the capital to invest. Switzerland topped the list of countries on the 2021 Global Innovation Index partly because of the support packages offered to startups and the fiscal incentives offered to entrepreneurs.

Foreign people who wish to set up their own business in Switzerland will face different rules depending on where they’re from. Citizens of the European Union (EU) and European Free Trade Association (EFTA) citizens will have different rules than nationals from a “third country” (individuals from somewhere outside that EU/EFTA).

EU/EFTA Citizens vs Third-Country Nationals

Nationals from the EU/EFTA can establish a foreign company in Switzerland enjoying virtually the same conditions as those setting up a Swiss company. This is because they benefit from the Agreement on the Free Movement of Persons and can therefore work and set up a company in Switzerland.

“Third-country” citizens face more stringent requirements and regulations to set up a business. Apart from having to meet certain conditions for entry, they must obtain the required permits to establish and run a business in Switzerland. Only people with certain qualifications can set themselves up as self-employed or start up a Swiss business.

Business Structures in Switzerland

Entrepreneurs must choose a legal structure for their business and file legal documents to register their business under their chosen business structure. The most popular legal forms are a Sole Proprietorship, Limited Liability Company, and Joint-Stock Company. Take time to research the options and determine the right legal structure for your business.

Sole Proprietorship

Many entrepreneurs find a Sole Proprietorship to be the simplest legal form. It’s appropriate for small businesses run by one individual. Because a sole proprietorship isn’t a distinct legal entity from its founder, the business owner assumes unlimited liability for the company’s debts and obligations.

Please note: Foreign nationals require residence and work permits to run business operations as a single-owner company in Switzerland.

Private Limited Liability Company (GmbH)

A GmbH is a separate legal entity from its owners. The owners therefore have limited liability for the company’s debts and obligations. This provides more protection for the owner’s personal assets. Because setting up a GmbH means forming a distinct corporate entity, at least one director must have legal residence in Switzerland (work and residence permit) but other members can be non-residents.

Business owners looking to set up a GmbH must get authorisation from the relevant Cantonal authorities and meet all the legal requirements. For example, owners must meet the minimum share capital requirement of CHF 20,000 and be able to pay at least 50% of this amount upfront.

Public Limited Company (AG/SA)

An AG or SA (société anonyme) is a good option for larger companies or businesses that wish to go public. AGs are appealing as they offer limited liability protection and permit the issuance of shares as a way to raise capital.

Foreigners will face similar requirements as with setting up a GmbH: at least one Swiss national on the board, and a minimum amount of start-up capital. The necessary capital for forming an AG is significantly more than it is for forming a GmbH (CHF 100,000 with half up-front). The administrative formalities may also be more extensive.

General Partnership

A general partnership is a similar concept to a sole proprietorship, with one key difference. More than one person is involved in the ownership of a general partnership. Like a sole proprietorship, the company doesn’t exist as a separate legal entity and all partners have unlimited liability. The business also doesn’t pay corporation tax. Instead, taxes are passed through to the business owners.

Limited Partnership

A Limited Partnership model involves at least two partners. The full or active partner has unlimited liability. The rest of the partners have limited liability along with limited rights and responsibilities.

Branch

A branch is a section of a business that operates overseas. A branch depends legally on a foreign parent company, but is subject to Swiss taxes in the same way a Swiss company is. At least one member must be a Swiss resident.

How to Start a Business in Switzerland

Setting up a business in Switzerland as a foreigner or expat involves completing the following process:

1. Come up with a Business Name

If you’ve set up a sole proprietorship, your name must be included in your company name. If you set up another business structure like a general partnership or limited partnership, you are free to name your company whatever you want.

Check with the Commercial Register that your name hasn’t already been taken and then register your chosen name.

2. Choose Your Legal Form

This will depend on the factors discussed above, such as your initial business capital, the role or responsibility you want to take in your company, and how seriously you want to be taken as a company. Business structures like an anonymous LLC can award owners more anonymity too.

3. Establish Your Business in Your Chosen Canton

Businesses that want to establish a Swiss head office must choose a Swiss canton. Regulations surrounding taxation will vary from canton to canton, so pay close attention to how this may affect you going forward. Geographical location is also very important when choosing your canton. Take into account each location’s proximity to your customers and suppliers, and the industries the canton is known for.

4. Set Up Payment Processing

Setting up payment processing is one of the key first steps when setting up a business anywhere. Choose a payment processor that understands the challenges you face both in your industry and as a new business in Switzerland. This will put your enterprise in good stead to become successful as quickly as possible.

A merchant services account can also give your business access to payment technologies such as an integrated global payment gateway that allows you to track all of your dealings remotely and accept payments in different currencies.

5. Set Up a Consignment Account

Some business structures require you to deposit a minimum amount of capital to start a legal company. This is only a transitory account as the funds will be transferred to the company’s corporate bank account once you’ve registered your company with the Commercial Register.

6. Prepare the Relevant Documents

You must draft various documents like your constitutive documents or articles of association. These documents will include a lot of information like the legal form your company will take, the company name, where your head office is located, the amount of share capital or capital, the purpose of the company, and information about the individuals behind the company including shareholders, members, directors, and so on. Many companies delegate the drafting of these documents to third parties to ensure compliance and save time.

7. Register Your Business in the Commercial Register

Company registration is compulsory for Limited Liability Companies and Limited Companies.

Consider Switzerland for Your New Business

Switzerland offers great opportunities for entrepreneurs or small business owners to thrive in a country that rewards excellence. With favourable tax policies and incentives to set up successful businesses, Switzerland will inevitably continue to attract talent.

Foreign entrepreneurs must take the country’s entry requirements into account before taking any decisive steps. Research diligently and make sure you comply with all the relevant regulations to ensure a successful future for your business in Switzerland.