Registering a Business in Switzerland as a Foreigner: A Comprehensive Guide

Switzerland has long attracted visionary entrepreneurs from around the world thanks to its robust economy, central position in Europe, and unwavering commitment to quality and innovation. Although the country presents countless opportunities, foreign nationals must carefully follow Swiss regulations when starting a local venture. In this guide, you will discover the legal structures, associated costs, banking steps, employment and audit rules, the Swiss tax system, and how to choose the ideal canton for your new enterprise. Throughout this journey, remember that Mamytova Consulting, a premier Swiss consulting company, can support you with expert guidance on company formation and opening a Swiss bank account.

Introduction

Switzerland’s economy is famously stable and diverse, hosting a well-developed financial services sector and thriving high-tech manufacturing. These elements create a rich environment for international investment. In addition, consistent political stability, transparent legal frameworks, and steady economic policies offer a secure setting for business ventures of all sizes. Although Switzerland is not part of the European Union, it remains deeply connected to Europe through its regulatory alignment and strong economic ties.

Because there are typically no blanket prohibitions against foreigners launching businesses in Switzerland, entrepreneurs from across the globe are welcome. Yet, the specific conditions you must meet often depend on both your nationality and the type of legal entity you plan to create. This guide clarifies these important distinctions, explaining legal structures, registration costs, banking arrangements, workforce regulations, audit duties, and valuable tax insights. By the end, you will understand how to choose a canton that perfectly suits your strategic goals.

Legal Structures for Foreign Entrepreneurs

When aiming to establish a business in Switzerland as a foreigner, you must select from several possible legal forms. The best choice hinges on your goals, resources, and personal circumstances. Swiss authorities apply separate rules for EU/EFTA citizens and third-country nationals.

EU/EFTA Citizens
If you are from an EU/EFTA member country, you benefit from the Agreement on the Free Movement of Persons. Typically, you will need a B residence permit (valid for five years) to engage in self-employment. In most cases, providing a business plan, VAT number, or Commercial Register proof will suffice as part of this permit request. This streamlined approach fosters labor mobility and makes it easier for EU/EFTA nationals to start Swiss companies.

Non-EU/EFTA Nationals
By contrast, third-country nationals have stricter hurdles. In many situations, you must hold a C settlement permit (permanent residence), be married to a Swiss citizen (or someone with a C permit), or demonstrate that your startup will produce a lasting positive economic contribution for the Swiss market. If successful, you might receive a short-term L permit or B permit, both subject to annual quotas. Additionally, most Swiss legal structures mandate a local address and at least one manager or board member who resides in Switzerland.

Sole Proprietorship

If you are a one-person enterprise or run a smaller business, the Sole Proprietorship (Einzelunternehmen) could be an attractive and straightforward choice. This structure requires a valid Swiss residence and work permit to operate. There is no legal distinction between you and the company, and no statutory capital minimum is required. However, you assume full personal liability for debts.

Registration Particulars

• You must enroll in the Commercial Register only if your annual revenue exceeds CHF 100,000.
• If you are a non-Swiss resident, you typically need a G work permit and a solid business plan.
• EU/EFTA citizens can present a business plan, proof of registration, and evidence of adequate financial means.
• Non-EU nationals face stricter rules: authorities will examine whether your enterprise is sustainable, job-creating, and beneficial to the local economy.

Although a sole proprietorship is easy to set up, foreigners must ensure they satisfy residence or permit conditions. It can be the most cost-effective choice, but the personal liability element is a serious consideration.

Limited Liability Company (GmbH/Sàrl)

The Limited Liability Company (GmbH) is a go-to legal form for many international entrepreneurs. It offers greater protection for personal assets because it stands as a distinct legal entity. You need a minimum paid-up share capital of CHF 20,000 to start. Importantly, at least one managing director with signatory authority must live in Switzerland and hold a valid work permit.

Key Formation Steps

• Draft Articles of Association and notarize them.
• Ensure the Commercial Register publicly lists your shareholders (unlike an AG).
• If you have multiple directors, a majority or at least one director must be a Swiss resident. Corporate directors are not allowed.
• Non-resident founders may temporarily rely on a Swiss nominee director until they relocate or secure their permit.

Though the GmbH demands more formalities than a sole proprietorship, it remains one of the most common choices because of its simpler capital requirement relative to larger corporations.

Public Limited Company (AG/SA)

A Public Limited Company (AG) typically suits sizable ventures or those planning to raise capital through share issuance. While the minimum required share capital is CHF 100,000, only CHF 50,000 must be fully paid at incorporation (20% of total capital). A board of directors oversees the company, and at least one director generally must live in Switzerland.

Notable Distinctions

• Shareholders’ identities remain private, unlike in a GmbH, where owners are listed publicly.
• In certain instances, a majority of the board might need Swiss or EU/EFTA residency.
• AGs attract stricter audit and reporting obligations.
• Though EU/EFTA citizens often get a B permit to manage an AG, non-EU individuals must meet more rigorous permit criteria.

Because the AG structure requires a larger initial capital outlay and heightened board membership regulations, it is frequently a better fit for well-financed enterprises or those with comprehensive growth strategies.

Other Legal Forms

Besides Sole Proprietorships, GmbHs, and AGs, Switzerland offers:

• General Partnerships: At least two partners share unlimited liability. Foreign partners typically need Swiss residency permits.
• Limited Partnerships: Requires one partner with unlimited liability and another with limited liability.
• Associations and Foundations: Ideal for non-profit goals. Regulations for foreigners vary, and specialized guidance is often recommended.

Each vehicle has distinct rules, so it is wise to get professional advice when selecting the optimal structure for your venture.

Costs Associated with Business Registration

The price of forming a Swiss company depends on its legal type and the associated fees (e.g., notary, Commercial Register, mandatory publications).

Sole Proprietorship

• Commercial Register entry fees range from CHF 80 to CHF 420 (some sources say around CHF 120).
• No compulsory notary fees, reducing overall costs.
• Administrative costs, including tax and social security steps, might land near CHF 700.
• Some providers offer budget-friendly formation packages starting at CHF 190, sometimes covering signature legalization.

This affordability makes sole proprietorships especially popular among individual entrepreneurs.

GmbH Registration Costs

Forming a GmbH tends to be more expensive:

• Commercial Register basic fees typically hover between CHF 420 and CHF 600.
• You must also pay notary fees (CHF 500 to CHF 1,500, on average) for founding documents.
• Comprehensive start-up expenses can reach CHF 2,000 to CHF 4,000.
• Minimum share capital of CHF 20,000 must be paid upfront.
• Additional costs might include opening the temporary capital deposit account (CHF 100–350).

Professional service quotes can vary dramatically; some estimate around CHF 6,000 in Zug, whereas others exceed CHF 15,000 for the first year, including various government fees.

AG Registration Costs

Creating an AG generally involves the highest costs:

• Commercial Register fees around CHF 600 to CHF 800.
• Notary fees can easily match or surpass those for a GmbH (CHF 800 to CHF 3,000).
• You need CHF 100,000 in share capital (minimum CHF 50,000 paid at inception).
• Service providers charge a broad range, from about EUR 2,600 to well above USD 10,000, depending on scope.

AGs therefore suit larger operations with significant capital. As with GmbHs, you should investigate multiple providers to ensure transparent and competitive pricing.

Additional Fees

Apart from core registration expenses, factor in:

• Publication in the Swiss Official Gazette of Commerce (SHAB/SOGC) to formally announce incorporation.
• Stamp Taxes on share capital, although the initial CHF 1,000,000 is often exempt.
• Fiduciary or Trustee Costs if you require specialized guidance.
• Banking Charges to set up capital accounts and manage operational funds.

A thorough budget that includes these add-ons can help you avoid surprises during or after registration.

Opening a Blocked Capital Account in Switzerland

When forming a GmbH or AG, a blocked capital account is mandatory. This special account holds your required share capital and remains inaccessible until the official incorporation is published. The process generally proceeds as follows:

1. Transfer Funds: Shareholders deposit the capital from their personal accounts into the blocked account.
2. Bank Confirmation: The bank issues a confirmation letter to the notary, validating that the funds are available.
3. Notarization: The notary prepares the incorporation documents and submits them to the cantonal commercial registry.
4. Final Review & Publication: After cantonal approval, the Swiss Federal Commercial Register finalizes the process and publishes the new company’s details.
5. Account Unblocked: The funds move to a normal business account or the blocked account is converted into a standard operational account.

Swiss banks enforce strict compliance rules, so ensure the capital originates directly from the shareholders’ personal accounts. If any discrepancy arises, the bank may reject the transfer and charge fees.

Documentation for Opening the Blocked Account

Non-resident founders usually must submit:

• Valid Passport or ID (often notarized or certified).
• Proof of Address, such as a recent utility bill.
• Business Plan, describing projected activities and financials.
• Draft Articles of Association, if applicable.
• Bank Reference Letter or statement from an existing account.
• Deposit Declaration and completed bank forms (KYC).
• Power of Attorney, if using a local representative.

Since Swiss banks are diligent about anti-money laundering checks, you should be prepared for thorough due diligence.

Currency Options and New Legal Provisions

Since January 1, 2023, revised Swiss corporate rules allow share capital denominated in a foreign currency vital to your core business (e.g., EUR or USD). The foreign currency’s value must be at least CHF 100,000 for an AG or CHF 20,000 for a GmbH. In that scenario, you must maintain your financial records and statements in that same foreign currency.

Opening an Operational Business Bank Account

After the company is officially registered, you can open (or convert the blocked account into) a standard operating bank account. As a foreign-owned business, expect a detailed assessment by your chosen Swiss bank:

• Certificate of Incorporation and Commercial Register extract.
• Articles of Association for clarity on your company’s objectives.
• ID Documentation for all shareholders and directors.
• Proof of Residence for owners and directors.
• Comprehensive Business Plan explaining business activity, scope, and any specific market focus.
• Organizational Chart identifying beneficial owners.
• Capital Deposit Proof from the blocked account.

Swiss banks uphold strong KYC obligations. Non-resident business owners sometimes must appear in person, and minimum balance conditions may be higher than for residents. If you find these requirements challenging, digital financial service providers such as Wise or Revolut might offer simpler solutions—though these come with their own limitations.

Mamytova Consulting: Your Expert Swiss Formation Partner

Navigating the Swiss banking landscape and ensuring your company’s seamless registration can be complex for non-residents. Mamytova Consulting, a premier Swiss consulting company, stands ready to assist you in opening bank accounts, managing due diligence, and satisfying every local requirement. By collaborating with experienced consultants, you can expedite administrative procedures, avoid common pitfalls, and focus on propelling your business forward in Switzerland’s dynamic market.

Employment Regulations for Foreign-Owned Businesses

If you plan to hire employees in Switzerland, understand the country’s detailed labor framework. The most critical aspects include work permits, social security, and adherence to Swiss labor law.

1. Work Permits
   • EU/EFTA Nationals: Generally enjoy easier access. For stays exceeding 90 days, they need a B residence permit, serving as both work and residence authorization.
   • Non-EU/EFTA Nationals: Face quotas and must be highly skilled (managers, specialists) to qualify. Employers often must prove no suitable Swiss or EU/EFTA candidate is available.
2. Social Security Contributions
   • Shared between employer and employee, these cover Old Age and Survivors Insurance, Disability Insurance, Unemployment Insurance, and more.
   • Employers handle payroll deductions and pay combined sums to the correct Swiss authorities.
3. Swiss Labor Law
   • Typically more liberal for employers compared to some other European systems, but still protective of workers’ rights.
   • Regular working hours are usually capped at 45 or 50 per week, with stringent overtime rules.
   • Employees receive at least four weeks of paid vacation, plus defined maternity and paternity leave benefits.
   • Notice periods and anti-discrimination rules are strictly enforced, promoting fair and transparent employment conditions.

Audit Requirements for Swiss Companies

Audit obligations in Switzerland depend primarily on the size and economic impact of the company, not purely on its legal form. The Swiss Code of Obligations specifies these levels:

1. Ordinary Audit
   • Mandatory for companies whose shares are publicly traded, those that issue bonds, or firms that exceed at least two of the following thresholds for two consecutive years:
     • CHF 20 million or more in total assets
     • CHF 40 million or more in annual revenue
     • An average of 250+ full-time employees
   • It involves a detailed check of the firm’s financial reports and internal processes.
2. Limited Statutory Examination
   • Applies to small and medium-sized businesses below the above thresholds.
   • Less extensive than a full audit but still verifies that financial statements comply with Swiss law.
3. Opting-Out
   • Smaller enterprises with fewer than ten employees can waive the limited audit if all shareholders agree.
   • The waiver remains valid until a shareholder requests a limited audit.

Swiss Tax System for Foreign-Owned Companies

Switzerland’s tax system is three-tiered (federal, cantonal, and communal), causing corporate tax rates to differ by canton. This variety enables foreign entrepreneurs to strategically choose a location with favorable rates.

1. Corporate Income Tax (CIT)
   • At the federal level, the rate is 8.5% on profit after tax (effective rate ~7.83% on pre-tax profit).
   • Each canton has its own CIT rates, creating combined effective rates generally between 11.9% and 21%.
   • Holding companies may benefit from tax exemptions at cantonal and communal levels.
2. Value Added Tax (VAT)
   • Standard VAT stands at 8.1% on goods and services.
   • Lower rates (2.6% or 3.8%) apply to essentials (food, medicine) and lodging.
   • Businesses must register for VAT if their Swiss turnover exceeds CHF 100,000.
   • Foreign companies selling into Switzerland may need to register if global turnover is CHF 100,000+ (even if Swiss sales are lower).
3. Other Taxes
   • Dividend withholding tax often starts at 35% but can be lowered by double tax treaties.
   • Cantonal capital tax is based on net equity.
   • Stamp duties may apply to share issuance, and a securities transfer tax could arise in certain share transactions.
   • Large multinational entities could face a “top-up tax” to meet the OECD’s 15% global minimum.

Suggesting the Best Cantons for Business Registration

Choosing a canton deeply affects your operational success in Switzerland. You should examine tax rates, regulatory ease, sector specialization, and workforce availability.

1. Zug
   • Noted for remarkably low corporate tax (~11.85%).
   • Nicknamed “Crypto Valley” for its blockchain-friendly environment.
   • Efficient registration processes and proximity to talent in the Zurich region.
2. Zurich
   • Switzerland’s economic powerhouse, especially for finance and tech (tax rate ~19.65%).
   • Global banking center with a large talent pool.
   • Offers robust infrastructure and an outstanding international reputation.
3. Geneva
   • International hub for trade, luxury brands, and global organizations (tax rate ~14.00–14.7%).
   • Highly cosmopolitan, multilingual environment.
   • Ideal for companies focusing on international exposure.
4. Basel
   • Stronghold for pharmaceuticals, life sciences, and chemicals (tax rate range ~13.04–17.97%).
   • Excellent connectivity and a flourishing industry cluster.
5. Nidwalden
   • Very competitive tax rates (~11.97%).
   • Attractive for businesses prioritizing cost-effective, low-tax jurisdictions.

Comparative Canton Table

Balancing Your Priorities

Ultimately, there is no universal “best” canton for every foreign-owned company in Switzerland. If your main objective is minimizing taxes, Zug and Nidwalden stand out for their low rates. Zurich excels in financial and tech opportunities, delivering unmatched access to a specialized workforce. For global networking or luxury sectors, Geneva is second to none. Meanwhile, Basel’s vibrant life sciences and chemical ecosystem can be incredibly appealing for companies in those fields.

Remember that cost of living, lifestyle, and infrastructure also matter. High living expenses might mean higher salary expectations, but also help attract top professionals. Consider your company’s scale, core industry, and talent requirements, and weigh these along with your tax planning strategy.

Conclusion

Setting up a business in Switzerland as a foreign founder requires a solid understanding of legal, fiscal, and administrative factors. From picking the right legal structure (Sole Proprietorship, GmbH, or AG) to calculating registration outlays and satisfying strict banking requirements, thorough preparation is key. Adhering to Swiss employment laws, audit rules, and tax obligations will also help you maintain a compliant and prosperous organization.

Each canton has its own distinct advantages, so selecting the location that aligns best with your growth strategy and sector focus is crucial. For those wanting minimal taxes, Zug and Nidwalden are prime choices, while Zurich offers one of Europe’s leading financial and tech ecosystems. Geneva brings an unparalleled international dimension, and Basel thrives as a hub for pharmaceuticals and life sciences.

Making the Most of Expert Support

Given Switzerland’s nuanced regulations and high standards of compliance, consulting with professionals is often the smartest first step. Mamytova Consulting, a premier Swiss consulting company, can guide you in choosing the right legal form, completing registration efficiently, and opening a Swiss bank account. Their local expertise and personalized approach will ensure that your business launch in Switzerland is swift, compliant, and primed for success.

By approaching the process strategically, you can confidently harness the many benefits of Switzerland’s stable economy, reliable legal structures, and global reputation. With diligent planning—and the right professional team at your side—your Swiss venture will have every opportunity to flourish in this dynamic and prosperous landscape.