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Types of Structures in Switzerland

Types of Structures in Switzerland

Updated on Monday 21st September 2020

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Foreign investors who want to open a company in Switzerland can choose from several types of business forms that are prescribed under the national legislation. Investors may set up stock corporations (AG/SA)limited liability companies (L.L.C.), partnerships (that can be classified as general partnership and limited partnership) and sole traders
 
The decision of opening a specific type of company depends on the share capital the businessmen want to invest in the company, the level of liability and other relevant aspects. Our team of Swiss lawyers can provide in-depth information on each business form available here and can also help you in the process of Swiss bank account opening.  
 

The stock corporation in Switzerland

 
The stock corporation is a well-known business form and it is legally separated from its owners. It takes between 2 and 3 weeks to be set up, it requires a minimum capital of CHF 100,000, and it has to have at least one shareholder and one director that resides in Switzerland
 
In this case, the shareholders can be both natural persons and legal entities. It is also important to know that this business form can be changed into a limited liability company, following the legislation prescribed by the Federal Law on Merger, Demerger, Transformation and Transfer of Assets
 
The stock corporation can registered in Switzerland as a holding company that benefits from various tax reductions imposed at both federal and cantonal levels. They can be set up as domiciliary companies, which are firms that are managed and controlled from abroad but only have a registered office in Switzerland. The auxiliary stock companies are domiciliary firms that carry part of their business in Switzerland.
 
Mixed companies are a mix of domiciliary and holding companies with cantonal and municipal tax benefits if the companies are foreign controlled, if they have a minimum of 80% of its income from foreign sources and if they develop relationships with other foreign companies.
 
Foreign businesses are also allowed to have branch offices in Switzerland, offices that have to be registered with the Commercial Registry of the canton in which they are located and they need to have an appointed Swiss-resident representative. Our team of lawyers in Switzerland can offer more details concerning any other registration requirement available for this type of company
 
 
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The limited liability company in Switzerland

 
The limited liability company is an alternative for persons who do not have the same minimum capital as it is necessary to start a stock corporation; in this case, the LLC will require a minimum amount of CHF 20,000. It is a separate legal entity and can be formed by one to several partners. This type of company is best suited to small business as it does not need a board of directors and it may have a shareholder who must be a natural person. Other characteristics of the LLC are presented below: 
 
  • it can have a single director, who can be represented by the company’s shareholder;
  • it is necessary to appoint an executive director who has a Swiss residency;
  • the liability of the shareholders is limited to the amount of shares they have participated with the company’s capital;
  • it can enter any type of business activity prescribed in the company’s articles of association
 
It is also useful to register the company's name as a trademark in Switzerland.

The Swiss partnerships 

 
The general partnership in Switzerland is created by two or more partners but this type of company is not a separate legal entity. The partners will sign a partnership agreement and each one of them will pay for his own taxes at personal income tax rates. They will both (or all) have unlimited joint liabilities for the debts of the business.
 
The limited partnership in Switzerland is a small business that needs to have at least two partners represented by natural persons, one of them acting as a general partner with unlimited liability, and another one acting as a limited partner with limited liability. The liability of the limited partner is limited to the value registered with the Commercial Register
 

Sole traders in Switzerland 

 
The sole proprietorship in Switzerland is a simple business structure where the owner has total control over the business. In the situation in which the business will have an annual turnover of CHF 100,000, it is mandatory to register the business form with the Chamber of Commerce and also, to conclude the steps for VAT registration in Switzerland
 
It is the best fit for artists, freelancers, self-employed persons and for any natural person who wants to start a small business in his/her own name. The downside of this type of business is that the owner is fully liable for the company’s debts and in the situation in which the business will encounter financial difficulties, the owner of the company will be held responsible with his/her own personal assets.
 
For more information on the types of companies that can be registered here, we invite you to contact our law firm in Switzerland; our attorneys can offer tailored advice on the most suitable business form that would correspond to an investor’s business plans, capital and business activities.  
In case you need other types of services in Switzerland, for example immigration assistance, we can put you in contact with our partners, a team of immigration lawyers based in Switzerland