Why Start A Business In Switzerland?
The Swiss economic policy is based on the principle of free trade and industry guaranteed by the Federal Constitution, with low import duties and only a few import quotas, which are mainly restricted to the heavily regulated agricultural sector. Switzerland has virtually no natural resources and only a limited surface area. It has therefore, been forced to build its wealth on foreign trade. Compared to other countries, Switzerland maintains a very high export rate in terms of percentage of its gross domestic product. Due to its relatively small domestic market - with a total population of approximately 7.5 million - Swiss manufacturers depend on foreign markets in order to make investments in research and development worthwhile.
Due to its geographic location, the German-speaking, French and Italian cultures meet in Switzerland. The diversity of cultures, languages, religions and the large number of foreign residents, especially in the financial centres of Zurich and Geneva, usually serve as an incentive for foreign companies and international organisations to establish a domicile in Switzerland.
Living & Working in Switzerland
What is the population?
The population of Switzerland is approximately 7.79 million
A stable, modern economy - one of the most capitalist economies in the world - welcome anyone setting up a business in Switzerland. It has the 2nd highest European rating after Ireland in the Index of Economic Freedom (2008). The World Economic Forum's Global Competitiveness Report currently ranks Switzerland's economy as the second most competitive in the world. Switzerland has overwhelmingly private sector economy and low tax rates by Western standards, in fact, overall taxation is one of the smallest of all developed countries.
Switzerland's most important industries are Chemicals, health and pharmaceutical, Measuring instruments, Musical instruments, real estate, banking, insurance, tourism, and international organizations.
Switzerland's main exports are machinery, chemicals, metals, watches, agricultural products, and services. The largest exported goods are chemicals (34%), machines/electronics (20.9%), and instruments/watches (16.9%). Exported services amount to a third of exported goods. The main export partners are Germany (21.9%), Italy (8.4%), France (8.3%), US (8.3%), UK (5.2%) and Austria (4.4%). The country's main imports are machinery, chemicals, vehicles, agricultural products, metals, and textiles. The main import partners are Germany (28.3%), Italy (10.4%), US (9.6%), France (8%), Belgium (4.2%) and the UK (4%).
Switzerland, although politically neutral, has strong ties with the EU through bilateral agreements. Internally, Swiss policy is conducted through a system of national referendums, and the country is divided into 26 cantons which have a high degree of independence in terms of policy and law-making.
What are the essentials to know?
In Switzerland a company can be established in the form of a corporation or a limited liability company. A company does not need a license to do business in Switzerland, except in circumstances where the business is subject to licensing requirements.
The shareholders of a Swiss company do not need to be Swiss citizens or Swiss companies.
Business Hours - Business hours are 8:00-12:00 and 14:00-17:00, Monday to Friday.
Working Hours - The maximum legal working hours is 45 hours per week.
Minimum Wage in Switzerland - There is no statutory minimum wage in place in Switzerland, however, some general labour agreements stipulate minimum wages for certain sectors.
Holiday's - Holiday leave is usually 4 weeks for employees aged over 20.
The handshake is the customary form of greeting with every person that you meet
Swiss society is very formal and people tend to address each other by their surname
Romansch is spoken by 1% of the population in the eastern part of the country and Swiss-German is spoken in all the German-speaking cantons
The Swiss are known for getting the best possible deal in negotiations through quiet self-confidence and a no-nonsense approach, avoiding hard-selling and high- pressure tactics
Businesspeople are expected to wear suits
Business cards are given out at every business meeting
STEP BY STEP PROCEDURE
|1||Place the paid-up capital in an escrow account with a bank|
|The capital is released by the bank upon completing the registration procedure at the Commercial Registry. Bank fees range from CHF 200 to CHF 2,000. A minimum bank fee of CHF 200 is charged for transferring capital from the escrow account to the company account after the company registration. For an incorporation with a cash contribution, the capital must be put in escrow at an institution subject to the Swiss Federal Law on Banks and Savings Banks.|
|2||Draft the articles of association in the presence of a notary public, who notarizes the personal and corporate signatures on the application form and authenticate the articles of association and the public deed of incorporation.|
|Agency: Public Notary|
|All signatures on the company registration application form have to be legalized (CHF 20 per personal or corporate signature). The Stamp Declaration Form (a negative declaration on investments in kind or chattels or founders’ privileges, which is compulsory as documentary evidence) and the Lex Friedrich Declaration Form (a permit for foreigners to acquire real estate) must be signed and handed to the Register of Commerce. The filing of both declaration forms is obligatory for all company incorporation applicants, irrespective of nationality. The name check is not mandatory but is recommended. The fee is CHF 50. Required for incorporation and available on the Internet are the public deed, the application form, the Stamp Declaration Form, and the Lex Friedrich Declaration Form.|
|3||File the deed certifying the articles of association to the local commercial register to obtain a legal entity|
|Agency: Commercial Registry|
|The time indicated must be seen as a general average. If by express mail, registration takes 3 to 5 days, and if by regular mail, about 7 days. The fee ranges from CHF 600 (for capital of CHF 20,000) to a maximum of CHF 10,000. In 5–9 days, the Registry publishes the date of the statutes and all names of shareholders in the Swiss Commercial Gazette; the announcement fee is included in the registration fee. Entry in the Commercial Register protects the company’s trade name and gives it a legal personality. Required documents also include the Stamp Declaration Form and Lex Friedrich Declaration Form (described in Procedure 1), as well as automatic registration for income tax payment.|
|4||Pay stamp tax at post office or bank after receiving an assessment by mail|
|Agency: Bank or post office|
|An application can be filed with the Federal Tax Administration after incorporating the company with the Commercial Registry. Because not every company is subject to tax, a procedure exists to determine whether the company is subject to the tax.|
|In case the stamp duty threshold has been reached, every company has the duty to fill out a form (which can be found on the internet), file it with the Federal Tax Administration, and pay the relevant amount due within 30 days upon registration in the commercial register. No assessment is sent out from the Federal Tax Administration beforehand. The fee is 1% capital with the first CHF 1,000,000 exempt.|
|5||Register for VAT|
|Agency: Federal Tax Administration|
|An application for VAT registration can be filed with the Federal Tax Administration only after incorporating the company with the Commercial Registry. Because not every company is subject to VAT, a procedure exists to determine whether the company is subject to this tax.|
|6||Enroll employees in the social insurance system (federal and cantonal authorities)|
|Agency: Social Insurance System (federal and cantonal authorities)|
|After the company has registered with the Commercial Registry, the Cantonal Social Security Office (Ausgleichskasse) will send the employer an application for registering employees in the social insurance system, which includes retirement and survivors’ insurance benefits (AHV), disability insurance (IV), occupational accident insurance (UVG), and retirement pension (BVG).|