Establishing a company in the GREATER GENEVA BERNE area (GGBa) of Switzerland is quick and easy. The GREATER GENEVA BERNE area (GGBa) comprises six cantons - or states – in the heart of Europe: Berne, Fribourg, Vaud, Neuchâtel, Geneva and Valais. The region represents almost half of Switzerland’s territory and shares borders with France and Italy. The region’s biggest trading partner, Germany, is close by. Although these six cantons have different strengths, the diversity of the industries present in the region is perfectly complementary.
Freedom of Trade and Industry is guaranteed by the Swiss Confederation. Anyone, including foreign nationals, may set up a business in Switzerland or hold a financial interest in one. However, some activities (hotels, restaurants, health professionals, lawyers, notaries, banking, financial institutions and employment agencies) require particular authorization.
Thanks to a relatively low level of regulation in Swiss commercial law, there are many options in terms of the best legal structure for your company. Note: foreign nationals (non-EU nationals) wishing to conduct Business personally on a permanent basis require a work and residence permit. For information on work permits and Setting up a company in Switzerland as a citizen of a foreign country, visit www.ch.ch.
Steps in establishing a company - overview
- Determine the legal structure of your company
- Check the availability of your business name
- Decide on the business domicile
- Deposit paid-in capital into a bank account in Switzerland (branch offices are exempt from this obligations)
- Determine members of the governing bodies of the company
- Submit notarized documents certifying the creation of your company; clarify VAT liability with the Swiss Federal Tax Administration
- Determine governing bodies
- Define Audit procedures
- Register with the Federal Social Security Authority
All business forms defined in the Swiss Code of Obligations are available to domestic and foreign investors. Joint stock companies or corporations (SA in French, AG in German) and limited liability companies (Sàrl in French, GmbH in German) are the legal forms most commonly adopted by foreign investors. In both cases, the company’s liability extends only to corporate assets.
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The corporation has its own legal status; its obligations are guaranteed only by its corporate assets. Its share capital, determined in advance, is divided into shares. This type of company is suitable not only for large, but also for small and medium-sized businesses. It is the most common business status for holding and financial companies.
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The limited liability company is a corporation of a personal nature formed by one or more persons or Commercial companies with capital determined in advance (share capital). Each partner acquires a stake in the share capital by contributing the maximum amount of the registered share capital. The name of the partners is entered in the Commercial Registry.
There are only a few differences between the two main legal forms of company in Switzerland. A limited liability company offers a solution with a relatively minimal capital investment and limited corporate liability; the joint stock company preserves the anonymity of silent partners and has simple procedures for share transfers. Companies planning an initial public offering (IPO) usually start directly with establishing a stock company. Note: the annual accounts have to be published if the company is listed on the stock exchange.
The third most popular type of company for foreign business establishments is a branch office. 
A branch is an alternative to the formation of a legally separate subsidiary. It is not officially classified as a Swiss company, which means that the foreign parent company bears the financial responsibility. However, since the branch Office is subject to Swiss law, it is treated as a Swiss Company for legal and tax matters.
In addition to corporations, limited liability companies and branches, the Swiss Code of Obligations lists the following forms of business:
- General partnership is a partnership of two or more individuals in which the partners have unlimited liability, and are generally bound by the acts of the other partners.
- Simple partnership is a contractual relationship between two or more persons (individuals or corporations), mainly for the realization of a particular project. This type of relationship has characteristics similar to a general partnership but, in particular, its name is not protected by law.
- Joint venture is an increasingly common form of partnership. It is not anchored in law. It is suitable for a Joint activity with a Swiss partner and is often operated as a joint equity contribution to a newly formed entity (a supplier in a foreign country establishes a production or sales company with its Swiss distributor). For smaller Projects (for instance, a research project for a limited time) the joint venture can also be operated as a partnership.
Franchising as a contractual partnership concept is also becoming popular in Switzerland. There are now more than 120 active franchise operations in existence. As a highly developed, sophisticated but also liberal market, s decentralized structure offers good conditions for an initial operating activity in this form, or as permanent headquarters for developing franchises.
The form best suited to your project will depend on the structure of your company, your anticipated business development, your operations in Switzerland and your tax priorities.
The formal steps are clear and relatively simple:
- Checking the availability of your companys's name : The name under which a company plans to do business can be chosen freely, with the exception of branch/regional offices, which must have the same company name as the head office, though new elements may be added to the name. The name must indicate clearly what legal form a company has; that is, whether it is a single-owner business, incorporated company or limited company. The chosen name must be clearly distinguishable from existing company names. Potential business names may be reviewed for their availability in the Central Business Names Index (www.zefix.ch) provided by the Federal Commercial Registry Office.
- Verifying Business domicile : A domicile address for your company must exist before you create the company. If you have not yet found the ideal location, you may register a company at your lawyer’s or notary’s address.
- Deposit capital : The minimum capital for a limited liability company is SFr 20,000, which must be deposited in full into a Swiss bank. For a stock company the sum is SFr 100,000, and at least 50% of the capital must be deposited in a bank account in Switzerland.
- Submitting notarized documents to the federal Commercial registry : The commercial registry discloses a company’s liabilities and agencies. Entry into the commercial registry gives companies trading rights protection. Legal entities, such as corporations, limited liability companies or branch offices, must be entered in the Commercial register to attain incorporated status. Entry in the Commercial Register requires an application to be submitted complete with all supporting documents required by law. The formal requirements are listed in datasheets published by the cantonal commercial registry offices.
The following documents need to be certified by a notary:
- Company name
- Business address
- Activities
- Nominal capital / denomination / paid-in amount and confirmation of payment in an escrow account at a bank in Switzerland
- Founders, names of signatories
- Board of directors / functions / designated signatories
- Statutory auditors (SA/AG) with acceptance letter
- Other persons with signatory authority
- Details of publications; how the company intends to communicate its informations / news
- Draft articles of association or incorporations
- Sherholder binding agreement (if applicable)
The foundation of the company is published in the Swiss Official Trade Journal after the authorities have approved the documents.
You must also register with the local Social Authority and carify VAT liability with the Swiss Federal Tax Administration.
DETERMINING GOVERNING BODIES
You will need to decide who will represent your company in Switzerland (directors, members of the board and auditors). Foreign nationals are permitted to do so, but at least one managing director with sole executive signatory status, or two directors with joint executive signatory status, must be domiciled in Switzerland.
AUDIT PROCEDURES
An official complete audit is required by companies which are either listed on the stock exchange or which fulfill at least two of the following criteria:
- Assets exceeding CHF 20'000'000;
- Total revenue exceeding CHF 40'000'000;
- More than 250 full-time employees.
Companies with fiewer than 10 full-time employees (so called micro-companies) can opt out of the obligation to appoint auditors.
For all other limited liability companies and corporations, a limited statutory audit is mandatory.
COST OF SETTING UP A BUSINESS
Fees for notaries and entry in the Commercial Register: approximately CHF 3,000. Advice and assistance from an attorney or fiduciary: approximately CHF 4,000-8,000, depending on the structure of the company; or if the company requires special additional agreements (such as shareholder agreements, request for a tax holiday or a tax ruling). Fees for additional assistance are charged by notaries and lawyers.
In addition to notarial and commercial registry costs, a corporate capital tax or stamp duty amounting to 1% of the corporate capital is applicable if the capital exceeds CHF 1 million.
For help with setting up your business, the cantonal economic development agencies offer free expert advice:
Berne : www.berneinvest.com
Fribourg : www.promfr.ch
Genève : www.whygeneva.ch
Neuchâtel : www.neuchateleconomie.ch
Valais : www.valais-economy.ch
Vaud : www.invest-vaud.ch
The original of this publication you will find on www.ggba-switzerland.ch
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