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Opening a Branch vs. a Subsidiary in Switzerland

Opening a Branch vs. a Subsidiary in Switzerland

Updated on Tuesday 09th August 2016

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The Swiss Business environment

When setting up a business in Switzerland a foreign company can decide upon opening a branch office or a subsidiary. The most common type of company used so far has been the subsidiary, but the branch office is starting to gather popularity as well.

When considering the type of structure the company wants to establish in Switzerland it must be kept in mind the purpose of doing business in Switzerland and the independency the new office will have.

Both types of structures are submitted to the Swiss commercial laws the same way. However, there are several differences between these two business forms and the main ones are highlighted below:

If you want to open a branch office or subsidiary, you can address to our lawyers in Switzerland.


Branch Office in Switzerland

The branch office in Switzerland is a satellite of the foreign parent company with no legal and separate identity.  The parent company will be accounted liable for the branch office’s liabilities and activities. The Swiss branch office is allowed to conduct any operation that would represent the parent company and within the parent company’s business purposes. Swiss branch offices are treated as any other company when it comes to income taxes, but no tax is applied to gains transferred to the parent company.

The Swiss branch office must be registered with the Swiss Commercial Register and requires at least a Swiss resident in the management board and a registered office.

The Swiss subsidiary

Unlike the branch office a Swiss subsidiary is a company with an independent and legal identity. The subsidiary will be created respecting the Swiss legislation and is a separate entity which makes the liabilities of its undertakings limited to its assets.

The Swiss subsidiary can be regarded as an independent company with a majority of shareholders and management board in the parent company.  A subsidiary is usually registered as a Swiss limited liability company.

Opening a subsidiary in Switzerland does not require any business permits, only registration with the Commercial Register.


Comparison between a branch office and a subsidiary in Switzerland

The branch office is easier and cheaper to set up than the subsidiary, but when it comes to liability, the subsidiary will not be affected by changes in the parent company considering its autonomy.

From the taxation point of view, both types of companies are subject to the corporate tax on their income in Switzerland, however in some case the branch office may offer more advantages from the taxation point of view for the parent company.

When it comes to transferring earnings from a branch office to its headquarters, there are no withholding taxes, but for subsidiaries the withholding taxes on dividends can be sent to the parent company.

The branch office can engage in any type of activity such as concluding contracts and transactions but when it  comes to liability, anything that happens to the parent company will extend to the branch office as well.


Our Swiss law firm can provide you with information about the incorporation process for any type of company. Please contact our attornneys in Switzerland for more details on this matter.



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