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The Ultimate Guide To
Employment in Switzerland

Switzerland Facts

Population size: 8,379,477
Currency: CHF Swiss Franc
Capital city: Bern
Languages spoken: German, French
Ease of Doing Business: 31

Employing in Switzerland: What You Need to Know

Swiss employment law appears complex and confusing when looking from an outside view, although in some ways there are many similarities to other countries.

Compared to the laws of most European countries, Swiss employment law is quite liberal, particularly in relation to terminations of employment contracts.

Apart from gender discrimination and sexual harassment, Swiss law does not require an employer to treat all its employees the same under similar conditions. Only a discrimination of a single or a small group of employees might be prohibited if it amounts to a violation of such person’s personality. Swiss legal requirements are divided between the federal level and the cantonical level.

Therefore, the points below are general guidelines and particular requirements will vary from canton to canton. For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Switzerland

Key Factors to Consider When Employing in Switzerland

There are several key areas to be aware of within Switzerland’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the Swiss laws and rules for both Swiss employees as well as foreign nationals.

GEO Solutions or DIY Employment in Switzerland?

Companies entering Switzerland must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Switzerland Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Swiss entity established that can run payroll.

A DIY approach will typically be delayed until there is a properly incorporated Branch Office or Subsidiary ready to run payroll and will include the cost of registered capital. The Shield GEO Solution is already properly incorporated in Switzerland, it has an active payroll and it is setup to sponsor work permits. This greatly reduces deployment times. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Shield GEO

Shield GEO provides a fully outsourced employment service in Switzerland. Companies expanding into Switzerland can contract with Shield GEO to employ and payroll their staff on their behalf in Switzerland. Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.

Outsourcing Employment Through a GEO Employer of Record Service

Using Shield GEO Employer of Record Services in Switzerland

Companies entering Switzerland can make a decision whether to use their own resources or to use a Global Employment Organization to handle employment and payroll responsibilities. A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in Switzerland makes the use of a GEO advisable to ensure full compliance with employment laws, including the drafting of local employment contracts for workers.

The company that is expanding into Switzerland contracts with the GEO to employ and payroll their staff on their behalf. The GEO then assumes the legal responsibility for these employees, sponsoring them on work permits if necessary, complying with local employment law and running their monthly payroll. This is especially useful to fulfill all of the specific withholding requirements for pensions and benefits, as well as documenting termination, probation periods and leave requests.

 

Payroll

Payroll Switzerland
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Switzerland is a complicated environment for running payroll due to the three tiered tax structure and the variety of social securities / insurances. The regulations will be influenced by the canton in which an employee is registered.

Currency ?

CHF Swiss Franc

 
Grossed income Tax Rate (%)
CHF 0-28299 0%
CHF 28300-50899 1%
CHF 50900-58399 2%
CHF 58400-75299 3%
CHF 75300-90299 4%
CHF 90300-103399 5%
CHF 103400-114699 6%
CHF 114700-124199 7%
CHF 124200-131699 8%
CHF 131700-137299 9%
CHF 137300-141199 10%
CHF 141200-143099 11%
CHF 143100-144999 12%
CHF 145000-895800 13%
CHF 895900+ 11.5%

For a taxable income of more than CHF 895,900 a rate of 11.5% will apply to the entire amount.

Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

Contributions are split equally between employer and employee.

Employer social security can differ from Canton to Canton but as of May 2015; AHV/IV/EO-Abzug – 5.15% (paid on the full salary) ALV 1 – 1.10% (Paid on the first 10.5k)

ALV 2 – 0.50% (Paid on anything over 10.5k in the month)

NBU – 0.99% (Paid on the full salary)

BVG  2.07%

Employers must match employee’s pension contributions.

Employees Social Security and statutory contributions

Employees make equal social security contributions to employers.

Employee social security can differ from Canton to Canton but as of May 2015; AHV/IV/EO-Abzug – 5.15% (paid on the full salary) ALV 1 – 1.10% (Paid on the first 10.5k)

ALV 2 – 0.50% (Paid on anything over 10.5k in the month)

NBU – 0.99% (Paid on the full salary)

BVG  2.07%

Employees pension contributions are matched by their employer.

Insurance requirements

Private Health Insurance is required

Can supply private health care

Yes

Can assist opening bank accounts

Yes

Work Permits

Work Permits
Can Sponsor Work Permit

Shield GEO is only able to sponsor EU nationals on B permits. B permits are for EU nationals with employment contracts valid for more than 12 months; who have the means to live in Switzerland without employment. The permit is valid for five years, and is renewable for another five. As the Employer of Record, Shield GEO handles all of the formalities and employment requirements in Switzerland. The client maintains responsibility for day to day employee management.

Work Permit cost

USD 3000

Work Permit processing time

4-6 weeks but the employee can commence work immediately whilst the B permit is being processed.

Work Permit process

Shield GEO applies through the local Canton that the employee is living and working in.Documentation required : employment contract, passport photos, marriage certificate (if relevant), CV, proof of local address, passport copies.

Can Work Permit be processed in country

Yes

Switch Business Visa to Work Permit?

Not relevant, as those qualified to apply don’t require a Business Visa.

Can Spouse work on dependent visa?

Yes

Business Visas

Business Visas
Can do Business Visa

No

Business Visa Cost

N/A

Business Visa processing time

N/A

Payroll and Tax in Switzerland

There are specific rules for payroll and taxation in Switzerland, depending upon whether your company employs foreign nationals, EU members or local Swiss employees . The primary concerns for a foreign company that needs to comply with tax laws in Switzerland are: individual income tax for employees, social insurance costs, payroll tax, VAT tax, withholding tax, business tax and permanent establishment concerns.

Information Explanation
Remote Payroll ?

A remote payroll in Switzerland is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Switzerland. One option for a non-resident company is to payroll its employees (local and foreign) in Switzerland is to use a fully outsourced service like a GEO, which will employ and payroll the staff on their behalf.

Local Payroll Administration ?

In some cases, a company will register their business in Switzerland under one of the forms available, (Liaison Office, Branch Office or Subsidiary) but prefer to have another company administer its payroll.  This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. However, the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll ?

Larger companies with a commitment to Switzerland may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Swiss payroll, and can fulfill all tax, withholding, and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Swiss employment laws.

Fully Outsourced Payroll & Employment  ?

Companies can outsource the employment and payroll of their staff in Switzerland to a GEO, like Shield GEO. This is possible for both foreign workers and Swiss nationals. This is the easiest, fastest and safest way to payroll staff in Switzerland.

Shield GEO manages all aspects of payroll for workers in Switzerland, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.

Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.

Read more about outsourced payroll and employment through Shield GEO.

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Tax Figures

Information Explanation
Corporate Income Tax ?

Federal CIT: 8.5% on profit after tax. There are also CIT’s applied at the cantonal and communal level. Depending on where the company is resident in Switzerland the overall CIT rate can range between about 11.5% to 24.2%.

Income Tax Rate ?
Grossed income Tax Rate (%)
CHF 0-28299 0%
CHF 28300-50899 1%
CHF 50900-58399 2%
CHF 58400-75299 3%
CHF 75300-90299 4%
CHF 90300-103399 5%
CHF 103400-114699 6%
CHF 114700-124199 7%
CHF 124200-131699 8%
CHF 131700-137299 9%
CHF 137300-141199 10%
CHF 141200-143099 11%
CHF 143100-144999 12%
CHF 145000-895800 13%
CHF 895900+ 11.5%

For a taxable income of more than CHF 895,900 a rate of 11.5% will apply to the entire amount.

Payroll Tax ?

N/A

Withholding Tax ?

8%

Time to prepare and Pay Taxes ?

63 hours

Time required to start a Business ?

10 days

Immigration and Work Permits in Switzerland

Foreign workers are required to have the proper visas and work permits in Switzerland, as established by immigration laws. Switzerland is not an EU-member state so the general rules of EU immigration and visa types will not necessarily apply. However it is a member of the Schengen region, which means there is open access between Switzerland and other Schengen regions (such as Germany, France and Scandinavia).

In any case, especially for non-Europeans, requirements for working and living in Switzerland will generally require a residence permit and application for permission to work, whether as the company director or an employee. Even the representative for a Liaison Office must have a work permit, although the business activities are restricted.

Work permits and visas should be investigated with the local embassy before establishing a business and/or going to Switzerland. If you have yet to complete the incorporation process you can use Shield GEO to sponsor the employee for the necessary permits.

Use the Shield GEO Employer of Record Solution?

Shield GEO is only able to sponsor B permits for EU nationals. The B permit is for EU nationals with an employment contract for 12 months or longer and who can demonstrate they have the means to live in Switzerland even without employment.

The B permit is valid for 5 years and can then be renewed a further 5 years. It will be applied for in the canton where the employee will be living and working.

It takes 4 to 6 weeks to secure a work permit (B Permit) for Switzerland, and costs $3000 USD through Shield GEO. The employee can commence work immediately whilst the visa process is underway. The employee can be in Switzerland whilst the B Permit is processed. The employees spouse is also able to work on a dependent visa.

Documentation required (Employee): Passport copy, CV, employment contract, copies of tertiary qualifications, proof of local address and marriage certificate (if relevant)

Use your own company?

Nationals from European Union or European Free Trade Agreement member states, regardless of their qualifications, are granted easy access to the Swiss labor market. Nationals from other states are admitted in limited numbers, provided that they are well qualified.

Third state nationals may only be admitted if a candidate cannot be recruited from the labor market of Switzerland or another EU/EFTA member state.

The salary, social benefits and terms of employment for foreign workers must be in accordance with conditions customary to the region and the sector.

When submitting an application, the employer must include an employment agreement that has been signed both by the employer and the employee.

With the exception of seconded employees who remain employed by the foreign employer, Swiss employers are obliged to register all employees with the various social security institutions.

Documentation required (Employee):

  • Passport copy
  • CV
  • employment contract
  • copies of tertiary qualifications
  • proof of local address and marriage certificate (if relevant)
  • translated copies of any documents that are not in German, French, Italian, English or Spanish.

Types of visas in Switzerland

Category Description of Visa
L Permit

Available for non-EU nationals and EU/EFTA nationals. The L Permit is for short term work of up to 12 months.

The L Permit is restricted by quota if the duration is longer than 4 months. Permits under 4 months are not restricted by quota. Also if an EU/EFTA worker is on a local CH contract and full Swiss payroll (including social security contributions) their work permit is not restricted by quota. Cantons get a quota entitlement per visa class.

Work permit applications must show they meed educational and work experience requirements, that they will pay an appropriate salary and that no EU/EFTA candidate is available for the position.

You must apply for an entry visa in a Swiss embassy before you arrive in Switzerland, and must read all requirements and make sure you follow these requirements to the letter. Your Swiss employer will obtain the authorisation for the work permit directly from the local cantonal employment service. They will pass the application to the FOM (Federal Office for Migration) who will approve the work permit.

An entry visa will take different times to process depending on the visa type and embassy, which processes the application. Similarly the cost will depend the type of entry visa and country of application. The work permit will be given to you when you arrive in Switzerland. The residents permit must be obtained from the Residents Registry office via the local cantonal migration office within 14 days of arrival in Switzerland.

B Permit

Available for non-EU nationals and EU/EFTA nationals. The B permit is valid for up to 12 months but it is extendable allowing it to cover long term work.

The B Permit is restricted by quota if the duration is longer than 4 months. Permits under 4 months are not restricted by quota. Also if an EU/EFTA worker is on a local CH contract and full Swiss payroll (including social security contributions) their work permit is not restricted by quota. Cantons get a quota entitlement per visa class.

Work permit applications must show they meed educational and work experience requirements, that they will pay an appropriate salary and that no EU/EFTA candidate is available for the position.

You must apply for an entry visa in a Swiss embassy before you arrive in Switzerland, and must read all requirements and make sure you follow these requirements to the letter. Your Swiss employer will obtain the authorisation for the work permit directly from the local cantonal employment service. They will pass the application to the FOM (Federal Office for Migration) who will approve the work permit.

An entry visa will take different times to process depending on the visa type and embassy, which processes the application. Similarly the cost will depend the type of entry visa and country of application. The work permit will be given to you when you arrive in Switzerland. The residents permit must be obtained from the Residents Registry office via the local cantonal migration office within 14 days of arrival in Switzerland.

G Permit

Only available for workers who are commuting or working cross-border.

Setting up a company in Switzerland

When setting up a company you may want to consider these factors:

  1. Business Factors

    • The industry and type of business
    • Nationality of the headquarters/individual(s) and
    • Presence of existing trade agreements or relationships
  2. National Language

    National Language is always important to keep in mind. Switzerland has four national languages: French, German, Italian and Romansh. French, German and Italian have the main status as official languages. German appears to be the most spoken of the languages, at around 74% of speakers using it. However this German can be considered a derivative of the original language, known as Swiss-German. Thus if you are able to speak ‘regular’ German many words may be different to the ‘parent’ language meaning there can be various difference in names and terminology to take into account when doing business in Switzerland. Nonetheless standard German will be understood.

    English is not a national language, and although some may suggest it is widely used most business procedures are likely to only be available in the official languages of German, Italian and French.

  3. Visas

    Switzerland is not an EU-member state so the general rules of EU immigration and visa types will not necessarily apply. However it is a member of the Schengen region, which means there is open access between Switzerland and other Schengen regions (such as Germany, France and Scandinavia). In any case, especially for non-Europeans, requirements for working and living in Switzerland will generally require a residence permit and apply for permission to work, whether as the company director or an employee. This should be investigated with your local embassy before establishing a business and/or going to Switzerland.

Switzerland boasts high work ranks in various measures including government transparency, civil liberty, and economic competitiveness, and has the highest nominal wealth per adult in the world according. In addition to high economic performance the Swiss are said to have the second-highest life expectancy in the world, with Zürich and Geneva ranked among the top cities with the highest quality of life.

It is important to know that despite being centrally located in the heart of the EU, Switzerland is not a member of the EU and voted against membership in both 1992 and 2001. However, the country cooperates with the EU and have brought its economic practices largely into conformity with those of the EU in many ways.

There are no particular restrictions on foreign owned companies in Switzerland, and it is considered an ideal business location by many international businesses to position themselves to enter markets throughout Europe.

The main types of company set up in Switzerland used by foreign companies are:

  • Liaison Office
  • Branch Office
  • Limited Liability Company (public or private).

While there are no restrictions on foreign ownership, all forms of company will require one person residing in Switzerland. If you come from outside of the European Union, and are going to run the business in Switzerland or move foreign staff there, this means that you will need a work permit (TWV).

Liaison Office

A liaison office in Switzerland does not have its own legal status, doesn’t have a distinct name or trade name or own property. If experiencing financial difficulties, the parent company will be liable for the office’s debts.

The liaison office is technically a representative office, and more flexible than a branch structure. However a liaison office in Switzerland is not allowed to engage in activities of a professional nature and it is not subject to territorial economic contribution. The representative office has no legal or economic autonomy and depends on the principal company. It does not have the power to enter into contracts and its employees do not have the authority to bind the company. However, it appears to be able to employ staff and normal payroll services and social duties will apply to all staff excluding expatriates.

As long as it doesn’t conclude any sale and is not directly providing service to the clients of the foreign company, it is not subject to income tax. Moreover, as it doesn’t make any sales and works exclusively on behalf of the foreign office, it is not subject to VAT. However, the foreign company can reclaim the VAT charged on the costs of installing and finance liaison office.

Registration Steps

1. Appoint a Representative

The existence of the representative office basically depends on the appointment and establishment of one or more representatives. The representative(s) must register for personal income tax. A work permit and residence permit are, of course, also required.

If at a later date the activities of the representative office change into a branch, the appropriate registration/amendment of registration in the trade register will have to be made. At the same time, the new entity must register for corporate tax, VAT etc.

Agency: N/A (arranged by your company)

Time: N/A

Cost: N/A

2. Submitting of a Declaration of Existence

To establish the liaison office a ‘Declaration of Existence’ must be submitted at the center for business formalities of the chamber of commerce and industry.

Note: This procedure does not enter the representative office in the Commercial Register, as this form can not function as an independent company.

Agency: Center for business formalities of the chamber of commerce and industry.

Time: Unknown – estimate: 7 day

Cost: Unknown – estimate: no charge

Note: Estimates are based on anecdotal or suggested evidence so it is recommended to enquire with Swiss or professional agents

3. Enroll employees in the Social Insurance System

After the company has registered with the Commercial Registry, the Cantonal Social Security Office (Ausgleichskasse) will send the employer an application for registering employees in the social insurance system, which includes retirement and survivors’ insurance benefits (AHV), disability insurance (IV), occupational accident insurance (UVG), and retirement pension (BVG).

Agency: Social Insurance System (federal and cantonal authorities)

Time: 1 day

Cost: no charge

Branch Office

Branch Offices have a certain organizational and financial independence from the principal office: under Swiss law, a branch office can enter into contracts and execute and settle transactions in its own name, and can sue and be sued at its place of business.

Legally, however, the branch office is part of the foreign company. If the foreign company is liquidated or falls into insolvency, the effects of such liquidation or insolvency also extend to the Swiss branch office. Similarly the foreign company bears liability for the actions of the branch.

Although it may often conduct most or all of the transactions normally dealt with by the headquarters, a branch office does not hold the authority to change or make policy or otherwise act independently of the headquarters.

The establishment of a branch office must be notified to, and registered with, the competent Commercial Register. The corresponding application must be filed by one or several members of the board of directors of the foreign company authorized to act on behalf of the foreign company.

Note: the commercial registers are managed at a cantonal level. Registration needs to be made in the commercial register of the canton in which the company has its headquarters. Potential branch offices need to be registered at the respective branch seat.

The branch office of a foreign company is limited in the choice of its corporate name.

The name of the branch office must indicate:

  • The name of the company;
  • The place of the principal business office and the place of the branch office; and
  • An expressed designation of the branch office as such.

Registration Steps

1. Check Trade Name

A branch office must have the same company name as its head office and may contain additional wording in its name that is valid only for the branch office. In addition, the company name of a foreign branch office must include the place of its headquarters, the place of the branch office and the explicit designation as a branch office.

Checking the trade name before registering is not mandatory but highly recommended.

Agency: Central Business Names Index (www.zefix.ch)

Time: Instant

Cost: CHF 50

2. Appoint a Representative

A representative with full power of representation who resides in Switzerland must be appointed for the branch office.

Agency: Organized by your company/board of directors/management

Time: N/A

Cost: N/A

3. Register at Commercial Register

A Branch Office can be registered at the competent Commercial Register. To register you will need documents to prove the legal existence of the foreign parent company in its home country; including

  • Parent company’s registration certificate;
  • Parent company’s articles of association;
  • The names of the parent company’s directors and secretary;
  • Evidence of the decision to establish a Swiss branch has been officially taken;
  • Details of the nature of the business of the branch needs to be indicated;
  • A minimum of one signatory authorized to act on behalf of the Swiss branch office;
  • The Swiss branch office must be given a name pursuant to Swiss standards and must indicate the name of the company as well as the place of origin of the mother company and the branch;
  • A domicile address for your company must exist before you create the company. If you have not yet found the ideal location, you may register a company at your lawyer’s or notary’s address.

No deposit Share capital is needed to create a Branch office in Switzerland.

Agency: Commercial Register

Time: Mailing time: 3-5 days (express mail), or 7 days (regular mail). Processing time: 5-9 days. Total time: 8-17 days

Cost: average around CHF 4,000.00

4. Open Corporate Bank Account

Being somewhat infamous for its history of international banking and offshore bank accounts, setting up a corporate account in Switzerland today is no longer as easy as it once was.

Generally banks will require the company to be established in Switzerland first, and require a local bank (UBS, CS, a cantonal bank or similar, via a notary) to provide a consignation account to receive the capital deposit for the incorporation.

Depending on your circumstances the procedure may be simple, or it may be complex. In some cases banks may require a minimum deposit (e.g. like paid-up capital), and in most cases will probably require minimum monthly balances or other fees.

Agency: Commercial Banks

Time: 1 day

Cost: Depends on the bank and your situation, may be up to 250 CHF (not including minimum deposit)

5. Register for VAT

While our research did not find any sources including registering for VAT as an explicit part of the Branch Office registration process, the general consensus is that any entity that is liable for tax must register for VAT. Therefore it is presumed that a Branch Office must also register for VAT in Switzerland. However, a procedure exists to determine whether the company is subject to this tax.

An application for VAT registration can be filed with the Federal Tax Administration after incorporating the company with the Commercial Registry.

If you are not required to register for VAT, but later your status changes you will be required to register within 30 days of this point.

Agency: Federal Tax Administration

Time: 1 day

Cost: No charge

6. Enroll Employees in the Social Insurance System

After the company has registered with the Commercial Registry, the Cantonal Social Security Office (Ausgleichskasse) will send the employer an application for registering employees in the social insurance system, which includes retirement and survivors’ insurance benefits (AHV), disability insurance (IV), occupational accident insurance (UVG), and retirement pension (BVG).

Agency: Social Insurance System (federal and cantonal authorities)

Time: 1 day

Cost: no charge

Subsidiary Company

A subsidiary is a separate legal entity created under Swiss law. It is independent from its foreign parent and the foreign parent company carries no liability over the activities of the subsidiary. It is typically a LLC (Limited Liability Company) or a Company Limited by Shares.

Subsidiaries offer greater flexibility for future growth than branch offices because they can be listed on the stock exchange and their ownership or shares therein can be transferred to a third party.

Registration Steps

1. Check Trade Name

Check the trade name because it must indicate clearly what legal form a company has; that is, whether it is a single-owner business, incorporated company or limited company. The chosen name must be clearly distinguishable from existing company names. Potential business names may be reviewed for their availability in the Central Business Names Index (www.zefix.ch) provided by the Federal Commercial Registry Office.

Agency: Central Business Names Index (www.zefix.ch)

Time: Instant

Cost: CHF 50

2. Place Paid-up Capital in a Bank

To establish that you have enough capital with Swiss authorities in the following steps, the capital can be ‘paid-up’ in an escrow account with a bank. The capital is released by the bank upon completing the registration procedure at the Commercial Registry.

For an incorporation with a cash contribution, the capital must be put in escrow at an institution subject to the Swiss Federal Law on Banks and Savings Banks.

This process would also be a nominal time to begin arranging the commercial bank account for the soon-to-be-established company.

Agency: Bank

Time: 1 day

Cost: Storage fee: CHF 200 – 2,000. Removal/transfer of capital fee: a minimum of CHF 200

3. Notarize Articles of Association and Submit Declaration Forms

Like in most countries, the articles of association must be notarized by a notary public, to authenticate the articles of association and the public deed of incorporation. This is a lawyer specializing in drafting and executing deeds of incorporation and articles of association. However unlike in other countries such as Australia and the US, this is a specialized role and ‘regular’ lawyers cannot generally provide this service.

All signatures on the company registration application form have to be legalized (CHF 20 per personal or corporate signature).

In addition to this, a Stamp Declaration Form (a negative declaration on investments in kind or chattels or founders’ privileges is compulsory as documentary evidence, as well as the “Lex Friedrich Declaration Form” (a permit for foreigners to acquire real estate). These both must be signed and handed to the Register of Commerce.

Agency: Notarization: Swiss notary. Declaration forms: Register of Commerce

Time: 3 days

Cost: CHF 20 per personal or corporate signature

Notarization: 0.1% of capital, with the minimum fee being CHF 500, or a maximum of CHF 5,000

4. Register at Commercial Register (File Deed certifying Articles of Association)

The deed must be mailed to the local Commercial Register to officially establish the company. Once received and processed, the Registry will publish the statutes and all names of shareholders in the Swiss Commercial Gazette (the announcement fee is included in the registration fee).

The previously mentioned Stamp Declaration Form and Lex Friedrich Declaration Form (described in Procedure 1), as well as automatic registration for income tax payment.

Entry in the Commercial Register protects the company’s trade name and gives it a legal entity status.

Agency: Commercial Registry

Time: Mailing time: 3-5 days (express mail), or 7 days (regular mail). Processing time: 5-9 days. Total time: 8-17 days

Cost: CHF 600 plus 0.02% of capital exceeding CHF 200,000 (up to a maximum fee of CHF 10,000)

5. Pay Stamp Tax at Post Office or Bank After Receiving an Assessment by Mail

As not every company is subject to tax, a procedure exists to determine whether the company is subject to the tax. An application for this can be filed with the Federal Tax Administration after incorporating the company with the Commercial Registry.

If the company is assessed as required to pay tax, you must fill out a form (which can be found on the internet?) and file it with the Federal Tax Administration, and pay the relevant amount due within 30 days upon registration in the Commercial Register.

Agency: Initial assessment application – Bank or post office. If filing – Federal Tax Administration

Time: Initial application: 1 day. Response time: unknown, estimate: 5-9 days

Cost: If required to file with the Federal Tax Administration, the fee is 1% of capital (with the first CHF 1,000,000 exempt). Otherwise, no charge

6. Register for VAT

An application for VAT registration can also be filed with the Federal Tax Administration after incorporating the company with the Commercial Registry. Like with tax, because not every company is subject to VAT, a procedure exists to determine whether the company is subject to this tax.

If you are not required to register for VAT, but later your status changes you will be required to register within 30 days of this point.

Agency: Federal Tax Administration

Time: 1 day

Cost: No charge

7. Enroll employees in the Social Insurance System

After the company has registered with the Commercial Registry, the Cantonal Social Security Office (Ausgleichskasse) will send the employer an application for registering employees in the social insurance system, which includes retirement and survivors’ insurance benefits (AHV), disability insurance (IV), occupational accident insurance (UVG), and retirement pension (BVG).

Agency: Social Insurance System (federal and cantonal authorities)

Time: 1 day

Cost: no charge

 

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Switzerland, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Switzerland they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where

  • the company is looking to setup an office quickly
  • the company wants to work within a defined budget
  • the company wants to limit its initial commitment in Switzerland
  • the company needs help with tax, employment, immigration and payroll compliance in Switzerland

The complexity of employment regulations in Switzerland makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Switzerland allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Switzerland.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Switzerland. Read more about outsourced employment through Shield GEO.

Conclusion

Switzerland follows a relatively standard approach to foreign business establishment: the representative style office called a liaison office, which has no legal capacity and is thus useful only for preliminary preparation and research like activities (but can employ people), the branch office which does have legal and profit making capacity, but must be legally connected and directed closely by the principal company and finally the subsidiary company which is a company fully incorporated under Swiss law with the full range of capabilities of a local company.

Perhaps one notable finding in this format is seemingly less support for the representative type model, with most sources focusing purely on branches and subsidiaries.

Aside from that, Switzerland appears to have relatively liberal rules with no real restrictions on foreign ownership or business operations and relatively standardized set up processes.

Summary of Set Up Steps

  Liaison Office Branch Office Company Time Cost (CHF)
Check Availability of Trade Name No recommended recommended Instant 50
Appoint a representative Yes Yes Yes*
(at least one manager must be resident)
N/A N/A
Declare Existence Yes No No 7 days 0
Notarise Articles of Incorporation and Submit Declaration Forms No No Yes 3 days 520-5200
Registration in Commercial Register (Company also: Submit Deed Certifying Articles) No Yes Yes 8-13 days 600-10000
Deposit Paid-Up Capital No No Yes 1 day 400-4200
Open Corporate Bank Account No Yes Yes 1 day 0-200
Pay Stamp Tax No Yes Yes 5-10 days 1% of capital (first 1000000 exempt)
Register for VAT No Yes Yes 1 day  
Enroll in Social Insurance System Yes Yes Yes 1 day 0
TOTALS:*applications and processing times, not including internal document preparation, etc Liaison8 daysNo cost Branch14-21 daysMin: CHF 650Max: CHF 10250 Company20-30 daysMin: CHF 1570Max: CHF 19650    

Note: In addition Branch and Company pay fees of 1% of capital (the first 1000000CHF of capital is exempt, i.e. if they have less than 1000000 of capital they pay no extra fee)

APPENDIX

Business Terms

English French German/Swiss-German Italian
Branch Office branche Zweigniederlassung ramo
Cantonal Social Security Office Bureau de Fonds de compensation Ausgleichskasse Cassa di compensazione
Commercial Registrar Registre du commerce Handelsregister Registro di commercio
Company Société à responsabilité limitée (SARL) Gesellschaft mit beschränkter Haftung (GmbH) Società a responsabilità limitata (LLC)
Federal Tax Office Administration fédérale des contributions (AFC) Eidgenössische Steuerverwaltung (ESTV) Amministrazione federale delle contribuzioni (AFC)
Representative (Liaison) Office bureau de liaison Verbindungsbüro ufficio di collegamento
Switzerland la Suisse die Schweiz la Svizzer

 

  • Switzerland Employer of Record Overview

Switzerland Employer of Record Overview

  • Switzerland Employer of Record Overview

Switzerland

Switzerland

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