Establishing a Sole Trader in Switzerland
Establishing a Sole Trader in SwitzerlandUpdated on Thursday 29th July 2021
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Sole traders in Switzerland
Natural persons can start a business in their own name under a sole trader, which is the most basic way of conducting a commercial activity in Switzerland. 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 traders, foreign citizens living in the country are also entitled to set up this type of business. Our team of Swiss lawyers is prepared to assist local and foreign natural persons with in-depth information concerning the registration requirements available for this business structure; our lawyers can assist any person in opening a sole trader in Switzerland and in the process of opening a Swiss bank account for your 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 this is the first step to the registration of a start-up company in Switzerland. Sole traders registered in this country can be used for starting a wide range of business activities.
Since it represents the simplest business structure available for investors, it also has the simplest registration procedure, which does not follow the same steps as it is the case of other types of legal entities available in Switzerland. However, there are a few requirements to be met when opening an individual enterprise in Switzerland:
- • the owner of the sole trader has to register for social security with the Old Age and Survivor’s Insurance;
- • the sole trader needs to have a trading name, which has to include the owner’s name (the family name is compulsory in this case);
- • since the sole trader does not represent a separate legal entity, its owner is fully responsible for the debts of his or her business;
- • the sole trader is legally required to register with the Swiss Commercial Register in the situation in which the annual revenue reaches the threshold of CHF 100,000.
Can the sole trader be changed into another Swiss legal entity?
The presentation below offers more details on the Swiss sole traders:
What are the regulations for foreigners opening Swiss sole traders?
How can one transfer the assets of a sole trader in Switzerland?
What are the accounting requirements for 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, comprised of the following: the health insurance, the invalidity insurance and the loss of earnings and compensation insurance. It is also necessary to know that the costs associated with the registration of a Swiss sole trader are very low compared to the incorporation of other business entities, investors having to pay CHF 120 when registering with the Trade Register; other associated costs can appear of course, including those related to obtaining professional advice.
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. Persons who are interested in starting a company in this country through a sole proprietorship are invited to address to our law firm in Switzerland.