Setting up a Company in Switzerland: Legal Restraints to Overcome

Generally Switzerland has been known for many years as an attractive business hub that offers a favorable business environment for foreign companies; this mainly due to its strategic position in Europe as well as its political stability and a strong economy. In this article, we look at the reasons why Switzerland attracts many foreign companies, the legal restraints involved in setting up a company as a foreigner, and how to overcome those restrictions.

Reasons Why Many Foreign Entrepreneurs Choose Switzerland to Incorporate their Companies

Some of the benefits that come with incorporating a company in Switzerland include:

• Switzerland’s strategic position in Europe coupled with a well-developed infrastructure and first-rate connectivity makes it the best location to do business in Europe and globally at large.
• As a company owner in Switzerland, you have access to highly skilled workers that can play a role in your company success.
• Its tax system is favorable to foreign companies. Taxes are only levied on international’s company’s’ revenue that is generated within the country.
• Its neutrality and political stability provides a favorable business environment for foreign companies.

Key Considerations for Setting up a Company in Switzerland

Foreign applicants may be categorized into two groups:

• EU/EFTA Citizens
• Non-EU/EFTA Citizens

EU/EFTA Citizens

For this group of citizens, the restrictions for setting up a business in Switzerland aren’t that strict. They require a residence permit (B permit). To be able to receive the B permit, the foreign national should report to their municipality of residence within 14 days of entering Switzerland and make an application for a residence permit. The key documents required are:

• A valid identification (identity card)/passport.
• An address in Switzerland.
• Documents that validate that they are or will be self-employed such as a company UID number, commercial registry, entry or a comprehensive business plan, etc.

Once this application has been approved, the applicant receives a five-year renewable residence permit. This residence permit allows the EU/EFTA nationals to work, independently as self-employed or entrepreneurs in Switzerland.

Non-EU/EFTA Citizens

Citizens in this category face more strict requirements than the citizens in the category above. Citizens from Non-EU/EFTA countries do not have the right live, work, or set up a business in Switzerland and hence they need to apply for authorization if they aren’t already a permanent resident (i.e. possess a C permit). People, who are qualified in a specific field like doctors, pharmacists, business executives, and so forth, stand a better chance of getting a successful application.

Citizens in this group who have already acquired a permanent residence permit (C permit) are usually permitted to stay and work in Switzerland as self-employed people.

Without a C permit, the applicant must demonstrate their business potential impact on the Switzerland’s job market. This involves having to demonstrate:

• A comprehensive business plan.
• A comprehensive start-up capital.
• Established networks in business.
• Evidence of incorporation or commercial register listing

On a successful application, the applicant receives, either an L permit (a short-term, one year residence) or a B permit (annually renewable residence).

To set up a company in Switzerland, foreign business owners must select an appropriate legal form for their business. Some of the legal business structures include:

• Limited liability company
• Private limited company
• Sole proprietorship

The Swiss law requires that at least one director must be a resident in Switzerland. This implies that non-resident foreigners wishing to incorporate a company in Switzerland must at least appoint an accredited representation, that is, a director, manager or managing director. To fulfill this requirement, foreign entrepreneurs wishing to establish a company in Switzerland are offered an authorization of a local director or manager. Firms like Rister can help you overcome this legal restriction by offering you the opportunity to work with their trusted and experienced trustees and managers who meet the legal criteria to assume the role of corporate body as director or manager of your company in Switzerland. This is performed by their Swiss nominee director services department. They offer additional support in terms of setting up a company, opening a bank account in Switzerland, representing your company to authorities, and also offer company advise.

You may also read:

• Benefits of using an offshore company
• How to start a business in Switzerland