Start a Franchise Business in Switzerland
Start a Franchise Business in SwitzerlandUpdated on Tuesday 20th July 2021
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Starting a franchise business in Switzerland can represent an attractive way of setting up a company, as the investors will no longer need to find a new business idea. More importantly, a franchise business already benefits from a successful business model, and the franchisee (the person or the legal entity entering a partnership with a franchisor) can rely on it to perform specific business activities in a Swiss canton.
It is important to know that a franchise business is established through a franchise agreement, a document that will enforce rights and obligations for both parties. Our team of Swiss lawyers can advise non residents who want to open a company in Switzerland on the main legal procedures that are established for this type of company.
Formalities for opening a Swiss franchise business
A foreign franchisor may easily enter the Swiss market, as there are no special requirements applicable to foreigners (such entities are treated following the same regulations available for Swiss businessmen).
A foreign entity operating as a franchisor can access the Swiss market by establishing a branch office or a subsidiary. At the same time, it is customarily to register a company limited by shares, as these three entities provide numerous tax advantages.
Switzerland has an institution which regulates the activities of franchise businesses operating on the local market, but the franchisor and the franchisee are not required to register with the agency, in the sense that the registation is not mandatory. However, it is advisable to register with the Swiss Franchise Association, which can assist the needs of this type of business.
As mentioned earlier, the franchise business is established through a franchise agreement, a document that has to include specific provisions. It is important to know that the Swiss legislation does not impose franchisors and franchisees to translate this founding document in the local language, but a lawyer in Switzerland can assist in this procedure if the parties may opt to offer an official translation in one of the official Swiss languages.
Duration of the franchise business in Switzerland
When signing the franchise agreement, the parties may also establish a duration for the validity of the contract. As a general rule, a franchise agreement is concluded for a period of 5 or 10 years, but the local legislation does not impose a certain term in this sense and investors can contact our law firm in Switzerland for consultancy services related to other relevant aspects when starting a franchise business.