One of the most popular form of business entities in Switzerland is companies limited by shares or as they are called in Switzerland Aktiengesellschaft/AG. This form is more suitable for those businesses that plan to attract investments by issuing shares. Any person, either an individual or legal entity, has the right to establish an AG. Moreover, in relation to the founder, there are no restrictions on residency in Switzerland. In order to establish an AG, at least CHF 100 000.00 of minimal capital is necessary. From this amount, at least 50% (CHF 50 000.00) must be paid. The features of shareholders of an AG are that their ownership can be kept several times and are no public information.
GmbH, or a limited liability company, is also a popular form of business for small to medium-sized projects in Switzerland. Both natural and legal persons can hold the status of the founder, the establishment does not require Swiss citizenship . In addition, the GmbH has a relatively low start-up capital of CHF 20 000.00, which is a fully paid minimum. Therefore, this form of company is especially attractive to small companies, family businesses, and startups. However, it should be noted that the shareholders are published in a public register.
Einzelfirma is considered to be one of the simplest and most straightforward business form in Switzerland, especially suitable for individual entrepreneurs. Now there are no capital requirements to start a sole proprietorship, that makes it an accessible option for many who are willing to start their entrepreneurial journey. However, it’s important to note that the business owner is personally liable for all financial obligations of the enterprise. This form is best suited for small business operations with low risk, offering ease of setup and full control to the owner.
In case you are interested in cultural, social or charitable activities, it might be not necessary to start your business as AG of GmbH. For non-commercial servies you would rather consider establishing associations, that are known as Verein. This form of business organisation is relatevely easy to start. Besides, there is no capital requirement for forming a Verein. Groups or clubs, that are looking for an opportunity to to pursue social oriented aims without profit motives might find this structure as an ideal one. As part of our pro-bono initative, we charge no formation fee for Vereins who are domiciled with us at reduced rate.
If you are looking for the most suitable form of organisation to execute charitable, cultural, educational or familial activities you should pay an interest to a Stiftung or foundation. The minimum capital requirement is 50’000 CHF and there needs to be resources to achieve its stated objectives (therefore its establishment has its own pecularities). Foundations offer a unique structure for long-term asset management and philanthropic endeavors.
Nowadays, the average rate of this tax varies from 12% to 14%. At the same time, the maximum rate falls on the canton of Zurich (19.7%), and the minimum on the canton of Zug (11.9%). It worth to note that current regulations provide optimization of this tax. For example, optimization can be achieved by deducting from the tax base the losses incurred by the company over the past 7 years. As well as an option in some cases, income tax can be credited against other taxes. It should be noted that the size of the tax rate in this case also depends on several factors, for example, such as the legal form of an entity, the amount of its income, etc. The tax base of the corporate income tax includes income received both in Switzerland and abroad. An exception may be income related to foreign production sites or foreign real estate. This tax is paid both on the federal and local levels. In purpose to avoid a double taxation there is distribution of the tax burden.
Also, any company that is located and carries out its economic activities in Switzerland is obliged to pay Value Added Tax (VAT). As of January 1, 2024, adjustments to the VAT rates have come into effect, marking a significant change for businesses and consumers alike. The normal VAT rate now stands at 8.1%, a slight increase that impacts a broad range of products and services. Attention should be paid to the fact that Swiss tax legislation provides for several cases in which business entities are exempted from paying VAT. For example, such an exception is provided for situations where the company has a small annual turnover (now one has to meet first CHF 100 000.00 of earnings per year, in some cases it could even be CHF 150 000.00 per year).