Switzerland

Overview

Switzerland, formally known as the Swiss Confederation, is a country located in the junction of central, southern and Western Europe. This is one of the most advanced countries in the world and has the highest nominal capital per adult. The population of this sovereign state is almost 8.5 million and the two significant global cities are Geneva and Zurich. These cities are important economic centers as well.

At Global Upside, we can help your business or organization hire employees in Switzerland, in addition to establishing a legal overseas office.

  • Global Upside manages services such as talent acquisition, human resources, accounting and payroll globally. Our team provides an end-to-end service to keep all the business operations running smoothly.
  • The hiring process in France can be complicated, not to mention the time-consuming and expensive process of starting a branch office. We help to lift that burden from your business.
  • We not only hire employees on your behalf, but also take care of any legal formalities involved.

Capital City

Bern

Currency

Swiss Franc (Fr)

Language

German, Italian, French, Romansh

Government

Republic

Country Overview

According to the CIA World Factbook, Switzerland is known to have a low unemployment ratio, including an extremely skilled workforce. High-tech manufacturing and low corporate tax rates create a strong economy. The country is 2nd best in terms of business friendliness and ranks 1st amongst all the 44 European countries. 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.
  • Has no hidden policies of government practices.

Legal Entity Setup

The available legal forms of setting up entities here are:

Stock Corporation (SA/AG)

Stock Corporation (SA/AG) takes one business or individual, which has their own listed share capital including a company name, to form. This is the most common form of legal establishment for not only small and medium-sized to large businesses. The minimum share capital required is CHF 100 and only 50% needs to be paid upon the establishment.

Limited Liability Company (Sarl, Sagl or GmbH)

Limited Liability Company (Sarl, Sagl or GmbH) is an establishment which has its own legal setup. Similar to SA/AG, this kind of a setup needs to implement an act of creation by all the founders. The founder members’ liability is restricted only to the registered capital. The minimum share capital should amount to minimum CHF 20,000 and maximum CHF 2 million and 50% needs to be paid while forming the company.

Sole proprietorship

Sole Proprietorship is also known as entrepreneurship, is managed by one person, just like the name suggests. There is no legal difference between the business entity and its owner and the latter provides for all the investment which makes him or her liable for all debts. There is no minimum amount that is required and once successful, it can be transformed to a GmbH or AG.

Limited Partnership

Limited Partnership is formed by minimum 2 people or organization wherein 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

General Partnership needs to have at least 2 people for the formation and this operates as an economic business. In such a form of enterprise, both the partners are accountable for all the debts. In this kind of an establishment, there is no minimum investment amount required.

The minimum time required to form an establishments as such is two weeks.

Human Resources

Many industries in Switzerland, the mandatory collective bargaining agreements are applicable. The Swiss employment laws do not differentiate between the kinds of workers that are there and the rules that are followed are common for all. It is only the self-employed and freelancers who do not have to follow any employment laws.

The employment contract needs to mention the below details:

  • 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

For further details, kindly visit the website and register.

Payroll

As a common norm, all the employee payments are done once a month, preferably by the 25th of a month.

Accounting

As per article 962, 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 will be reduced to around 9% with implementations like the patent box.

VAT

The basic VAT rate is 8% and also a reduced rate of 2.5% on medical items, household food items, books and few 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 official 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 –

  1. 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 organization/ legal entity –

  • Financial fine of at least CHF5 million.
  • Confiscation of possessions and items that are a result of the crime.
  1. 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 offence.

For organization/ legal entity –

  • Monetary fine of at least CHF5 million.
  • Repossession of belongings and entities that are a result of the wrongdoing.