Expand Business in Switzerland

Global Upside assist you to expand business in Switzerland by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution to help you establish your business and optimize your operations, all while maintaining compliance with Swiss laws and regulations.

The hiring and incorporation processes in Switzerland are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies this process and lifts the compliance burden for your business. Our teams have the experience and expertise required to help you establish a legal entity in Switzerland. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Bern

Currency

Swiss Franc (Fr)

Language

German, Italian, French, Romansh

Government

Republic

Country Overview

Switzerland, formally known as the Swiss Confederation, is a country located at the junction of central, southern, and western Europe. Switzerland has a population of almost 8.5 million people and the highest nominal capital per adult. The two main cities in the country are Geneva and Zurich, both of which are important economic centers.

According to the CIA World Factbook, Switzerland is known to have a low unemployment rate and an extremely skilled workforce. High-tech manufacturing and low corporate tax rates create a strong economy. The country ranks 2nd globally, and 1st amongst all 44 European countries in terms of business friendliness. Here are a few other interesting facts you might not know about Switzerland:

  • Ranks as the 20th largest economy in the world by nominal GDP
  • Ranks as the 9th largest economy in Europe
  • Low manufacturing costs

Covid-19 Update

The national government declared a country-wide lockdown excluding the essential services that are to remain open. Social distancing has been encouraged in the country, along with directing the residents to stay indoors if they feel unwell. While this condition is developing, Global Upside is advising its partners on ways how to keep the employees intact and the business growing profitably.

Legal Entity Setup

The available legal entity options in Switzerland are:

Stock Corporation (SA/AG)

A stock corporation (SA/AG) takes one business or individual to form. That business or individual must have its own listed share capital and company name. This is the most common form of legal establishment in Switzerland. The minimum share capital required is CHF 100. Only 50% needs to be paid upon the establishment.

Limited Liability Company (Sarl, Sagl or GmbH)

A limited liability company (Sarl, Sagl or GmbH) is an establishment that has its own legal setup. Similar to SA/AG, for this type of entity, the founders must implement an act of creation. The liability of the founding members is restricted to only their respective registered capital. The minimum share capital should amount to a minimum of CHF 20,000 and a maximum of CHF 2 million. 50% needs to be paid while forming the company.

Sole Proprietorship

A sole proprietorship is managed by one person. There is no legal difference between the business entity and its owner. The owner provides for all the investment, making that individual liable for all debts. There is no minimum payment required to establish, and once successful, it can be transformed into a GmbH or AG.

Limited Partnership

A limited partnership is formed by a minimum of two people. One partner (general partner) is liable for all the obligations of the company. The second partner (limited partner) is only liable for the amount they have contributed.

General Partnership

A general partnership requires at least two people to form and operates as an economic business. In such a form of enterprise, both the partners are accountable for all the debts. In this kind of establishment, there is no minimum investment amount required.

Human Resources

For most industries in Switzerland, collective bargaining agreements are applicable. Swiss employment laws apply to all workers and do not differentiate based on worker classification. It is only the self-employed and freelance workers who do not have to follow the general employment laws. To be deemed viable, employment contracts in Switzerland must mention:

  • Name of the employer and employee
  • Date of joining the job
  • Job details
  • Compensation
  • Duty hours
  • Holidays and leave entitlements
  • Termination policy and notice period

Payroll

The standard employee payment period is once per month, usually by the 25th of the month.

Accounting

As per article 962 of the Swiss Code of Obligation, Swiss GAAP FER is a common financial reporting norm.

Taxation

Corporate Tax

The significant tax rate in most areas is 12-14% and can be reduced to around 9% with implementations such as the patent box.

VAT

The basic VAT rate is 8%. A reduced rate of 2.5% is placed on medical items, household food items, books, and certain other products.

Data Privacy/ GDPR

The principal data protection legislation followed in Switzerland is the Federal Act on Data Protection (DPA). This was issued in June 1992 and the Ordinance to the Federal Act on Data Protection (ODPA) came out the following June.

The DPA states that any virtual transaction of employee data is prohibited if not approved by the data subjects.

Anti-Bribery & Anti-Corruption Law

According to the Swiss Criminal Code (SCC), the meaning of public officials is very broad. However, this regulation also includes employees of publicly held establishments if they exercise public roles and private employees. The penalties are explained below.

Bribery of public officials

For individuals:

  • Imprisonment of at least 5 years
  • 5 years of ban from their profession
  • Monetary fine of at least CHF 10 to CHF 3,000 per day (financial condition is taken into consideration)
  • Seizure of assets and objects that are a result of the felony

For an organization/ legal entity:

  • Financial fine of at least CHF 5 million
  • Confiscation of possessions and items that are a result of the crime

Bribery of private employees

For individuals:

  • Imprisonment of at least 3 years
  • 5 years of ban from their profession
  • Fiscal fine of at least CHF 10 to CHF 3,000 per day (financial condition is taken into consideration)
  • Capture of resources and properties that are a result of the offense

For organization/ legal entity:

  • Monetary fine of at least CHF 5 million
  • Repossession of belongings and entities that are a result of the wrongdoing