Establishing a Sole Trader in Switzerland

Sole traders in Switzerland

The Swiss legislation allows citizens to establish sole proprietorships with the purpose of conducting their own businesses. Recently, sole traders have become very popular as they are the first step to financial independency and self-employment in Switzerland. Swiss sole traders, also known as sole proprietorships or individual enterprises, are the simplest form of doing business and also allow the owners to hire personnel. Not only Swiss citizens are allowed to open sole trader, foreign citizens living in the country are also entitled to set up this type of business.

How easy is it to set up a sole trader in Switzerland?

The sole trader is usually registered as a private person who manages his or her own business and is the first step to the registration of a start-up company in Switzerland. Swiss sole proprietorships can be employed for most types of activities. The registration of a sole trader does not imply the same steps as the company incorporation in Switzerland which is why it is much simpler to establish. However, there are a few requirements to be met when opening an individual enterprise in Switzerland:

• - the owner must register for social security with the Old Age and Survivor’s Insurance,
• - the name of the sole trader must include the owner’s last name,
• - the Swiss sole proprietor will be held accountable personally for the company’s liabilities,
• - if the sole trader’s annual revenue is at least 100,000 CHF , it must register with the Swiss Commercial Register.

Sole traders can be transformed into any other type of Swiss company any time.

The presentation below offers more details on the Swiss sole traders: 

Taxation of sole traders in Switzerland         

The sole proprietorship is required to pay the personal income tax in Switzerland and the social insurance among which:

• - a health insurance,
• - the invalidity insurance,
• - the loss of earnings and compensation insurance.

In order to determine the payment of the social insurance premiums, the Swiss sole trader must submit certain documents such as invoices, offers, contracts, special licenses or other relevant documents that could help with the clarification of the sole proprietor’s situation. These documents must be submitted no later than 3 months after starting operating.

If you want to establish a sole trader and need help you can contact our lawyers in Switzerland.