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CHARACTERISTICS

GENERAL CONTEXT
Type of entity
Stock Corporation, Ltd. (AG)
Limited Liability Company, LLC (GmbH)
Political Stability
Excellent
Local law
Civil law
Anonymity of the shareholders
Yes
No
Taxation of companies
Variable
Language
Official: French, German,
Italian and Romansh;
English is not
an official language,
but is often used
REQUIREMENTS
Minimum Number of Shareholders
1
Minimum Number of Directors
1
Corporate Directors/Managers Permitted
No
Need assistant company
No
Capital commonly allowed
CHF 100,000
CHF 20,000
Amount of required capital to the creation of society
CHF 50,000
CHF 20,000
LOCAL CONDITIONS
Registration office
Yes
Secretary
No
Local Directors
Yes
Meetings and assemblies
Yes
The directors listed on the Register of the Government
Yes
Shareholders registered in the Register of the Government
Yes
No
ANNUAL OBLIGATIONS
Performance
Yes
Submit Accounts
Yes
Audit
Yes
Publication of accounts
Yes
OVERHEAD ANNUAL
Tax/license fee
Variable
Contribution of production of declaration
No

INTEREST OF THE JURISDICTION

Advantages of a company in Switzerland

  • Location in highly respectable jurisdiction;
  • Sophisticated infrastructure;
  • Confidentiality, widely anonymous for investors;
  • 100% foreign ownership;
  • Limited liability;
  • Simple transfer of shares;
  • A double tax treaty network;
  • No restrictions on repatriation of profits and capital;
  • Absence of Exchange control;
  • Flexibility to act as a global holding company for all international activities.

Disadvantages of a company in Switzerland

  • High costs;
  • Paid up minimum capital;
  • Duty of publication of share transfers.

Main info

Switzerland is a federal republic, which is officially known as the Swiss Confederation. Switzerland is one of the most attractive countries in the world where to live, work and run business. It offers political and economic stability and relatively low company tax rates. And even though, Switzerland is not recognized as an offshore jurisdiction, it could be regarded as a low-tax jurisdiction within Eupore, with a wide range of specialized corporate forms which can be used by international investors and multinational companies to optimize and decrease their tax bills. The specific corporate constructions of Switzerland can be more profitable for certain activities, individuals or companies.

Such a reputation of Switzerland is explained by many factors. One of them is an advantageous geographical location in the heart of Europe. Switzerland borders on France, Italy, Germany, Austria and Liechtenstein. The total area of this country is almost 42 thousand km², and the population is more than 8 million people. The history of Switzerland goes back centuries, it is mentioned in historical documents of the 13th century. Today Switzerland is a country that is associated with wealth, stability and prosperity.

The political system of Switzerland differs from most European countries. It is a confederation and consists of 26 cantons. State power is exercised at two levels: federal and local (cantonal). The Swiss constitutional system provides for the separation of power into legislative, executive and judicial powers.

At the federal level, the power is concentrated in the Federal Council, which includes 7 members. The advisers alternately head the council, holding the post of president of the confederation. Legislative power belongs to the Parliament – the Federal Assembly, consisting of the National Council and the Council of the Cantons.

The legal system of Switzerland is characterized as highly democratic. Referendums play an important role in the country; all significant issues of state policy are solved through direct democracy.

The judiciary is independent and the other branches of government have no influence on it. The courts function at the cantonal level in the form of magistrate, district and cantonal courts. The highest authority is the Federal Court of Switzerland.

Types of companies and incorporation procedure

If you are planning to start a company in Switzerland, you need to determine the scope and type of company that will be best for your business. The most popular and optimal forms of the company in Switzerland are the joint-stock company (AG – Aktiengesellschaft) and the limited liability company (GmbH – Gesellschaft mit beschränkter Haftung).

01. AG (Aktiengesellschaft)

The Swiss joint-stock company is a reliable company, enjoying high reputation and reliability. The minimum amount of capital of such a company is 100,000 francs, half of which must be paid at the time of registration. To create an AG, at least one shareholder and one director are required, which must be an natural and a resident. Large AGs must be audited annually.

02. GmbH (Gesellschaft mit beschränkter Haftung)

A limited liability company has many advantages. The main one is the charter capital of 20,000 Swiss francs, which, however, must be paid at the time of registration. The management body is a director or board of directors, at least one of whom must be a resident of Switzerland. Meetings of shareholders are held in Switzerland. GmbH are required to maintain financial records and audit, if the company has a turnover of more than 20 million francs for more than two years, and employs more than 50 people.

Taxation

  • Companies resident in Switzerland are subject to corporate income tax on their worldwide income. A resident is a company incorporated under Swiss corporate law and in case when the management office of this company is located in Switzerland. Non-resident companies are subject to corporate taxation only for income, the source of which is located on the territory of the country.

  • Taxation in Switzerland has a two-tier system. Taxes are levied at the federal and at the cantonal levels. Generally, the federal corporate income tax rate is 8.5%, however it can be reduced taking into account deductions up to 7.8%. In different cantons are set their own rates, as a result, the total federal and cantonal tax rate varies in different regions and ranges from 11% to 25%. The lowest rates are set in the cantons of Zug and Zurich.

  • There is a withholding tax (Verrechnungsteuer) on dividend distributions for residents and non-residents, individuals as well as companies. The tax rate is 35%, however, due to the multitude of treaties on avoidance of double taxation, it can be effectively reduced. The same applies to interest. There is no withholding tax on the payment of royalties.

  • The VAT rate in Switzerland is 8%. Lowered rates of 2.5 and 3.8% are applied to certain activities.

  • The state fee is paid to the budget during the creation of the company and amounts to 800 Swiss francs.

Bank system and economy overview

Switzerland has a stable, prosperous economy, low unemployment rate, and the population has a very high standard of living. In all important economic indicators, Switzerland ranks first in the world. The basis of the Swiss economy is industry, trade and services, especially the financial sector. The industry is represented by pharmaceuticals, machinery, watchmaking, gold-mining activities. Agriculture specializes in the production of cheese, chocolate, meat and dairy products. Switzerland’s foreign trade is based on exports, the main trading partners are the EU countries, the USA.

The financial and banking sectors may be considered as the most important elements of the Swiss economy. The National Bank of Switzerland is the central banking establishment of the country, but it does not exercise significant regulatory functions. Its main task is to pursue monetary policy. Swiss banks have a reputation of the most reliable financial institutions in the world, actually the banking has turned this small mountain country into the largest world financial center. The major factors are due to the highest level of preservation of banking secrecy and confidentiality of customer data and documentation, as well as high standards of financial services. Therefore, Swiss franc long been one of the most stable world currencies. The other one important feature of the Swiss banking industry is that banks do not depend on the tax legislation.

HOW TO
PROCEED

To incorporate or purchase a company the following documentation should be provided:

01

A completed application form signed by the company or by the representative

03

A personal bill, which is less than 3 months old from the date of the application

02

Copy of valid passport

04

Payment of our fees

Note: additional documents may be required depending on the certain offshore bank.

Set-up time: From the moment, we are in possession of all required documents:

3 days

Incorporation of
a company or purchase
of an existing company

15 days

Delivery of the original
company documents

3 weeks

Offshore Bank: offshore
bank account opening