Incorporating a business in Switzerland from abroad

As a person from an EU or EFTA member state, you have to observe a few rules when setting up a company in Switzerland.

All EU/EFTA citizens - currently with the exception of Croatia - can become self-employed (special provisions apply to Croatian nationals).

According to the Agreement on the Free Movement of Persons, self-employed persons can also work without a permanent residence permit (C permit). A 5-year B residence permit is sufficient for this, although this must be obtained before starting work. However, proof of the planned self-employed activity must be provided when registering in Switzerland. This can be done with a VAT number, an entry in a professional register, registration with social insurance as a self-employed person, a business plan, accounting figures or an entry in the commercial register. Detailed information on the proof required can be obtained from the cantonal migration authorities.

An EU/EFTA B residence permit for self-employment is initially issued for five years and includes full geographical and professional mobility.

If self-employment fails and the entrepreneur becomes dependent on welfare, the right of residence is lost. However, those affected can still look for a job as an employee in Switzerland (see Art. 61a AIG).

Cross-border commuters from EU-EFTA states can set up a company in Switzerland and be self-employed. You must prove to the Swiss authorities that your self-employed activity can be carried out in Switzerland. This can be done by submitting substantiated company documents such as a business plan, , opening of a salesroom, office or workshop, accounting documents, etc. The migration authorities of the canton in which you wish to set up your new company will provide you with detailed information on the required documents.

A cross-border commuter permit is only issued to third-country nationals if they have a permanent residence permit in a neighboring country of Switzerland and have also been resident in the foreign border zone for at least six months. In accordance with the Agreement on the Free Movement of Persons, cross-border commuters must return to their place of residence abroad every week.

After five years of uninterrupted employment, there is a right to an extension of the cross-border commuter permit if there are no grounds for revocation under Article 62 paragraph 1.

Companies from third countries - i.e. not from the EU/EFTA area - that want to be self-employed in Switzerland must fulfill and comply with the legal requirements in Switzerland. You can find information on this here:

• Federal Acton Foreign Nationals and Integration
• Ordinance on Admission, Stay and Employment
• Setting up a company as a citizen of a third state

In principle, people with protection status S can set up a company in Switzerland if they have a work permit in the canton in which they work. We will inform you about the applicable conditions and support you throughout the entire start-up process.

If you set up a company in Switzerland, you also need to take out insurance. This includes business insurance and social insurance for you and your employees. As the founder of a partnership, you are considered self-employed and must take care of your own pension provision. As the founder of a corporation, you are considered an entrepreneur and an employee. This means that most insurances are compulsory. The social insurance system in Switzerland consists of three pillars:

• Old-age and survivors' insurance (AHV), disability insurance (IV) and the income compensation scheme (EO)
• the pension fund (BVG)
• private pension provision

Employers must also register their employees with unemployment insurance (ALV).

If cross-border commuters are involved, the following insurances are also mandatory:

• Health insurance
• Accident insurance for BU and compensation for NBU via deductions
• Withholding tax

Foreign nationals setting up a company in Switzerland is a trend. Would you also like to take this step? A wise decision. Switzerland is considered one of the most attractive business locations in the world. Among other things, you and your company can expect:

• Political stability
• Liberal legislation
• Strong currency
• Affluent domestic clientele
• Anonymity of investors (only with a public limited company)
• Low taxes
• Practically no corruption
• High level of education
• Globally recognized research & innovation
• High quality of life