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OPENING A COMPANY IN SWITZERLAND: 5 EVIDENT ADVANTAGES
ADVANTAGES, TIMES AND COSTS TO OPEN A COMPANY IN SWITZERLAND
The deep economic crisis in the last decade is going through the ‘ Italy , pushing more and more entrepreneurs towards Switzerland . Indeed, young Italians find it difficult to integrate into the working context and are afraid to invest .
The Helvetic country captures their attention for several reasons, the same that we will try to analyze below and that shed light on the many advantages, not only tax, of opening a company in Switzerland.
First, Switzerland has a limited tax burden. In fact, the calculated taxes are around 20% on profits and vary according to the municipality in which the company is domiciled. Opening a company in Switzerland is therefore extremely convenient compared to opening a company in other countries. At the following link you can make a simulation to obtain an indicative calculation of the taxes to be paid in the Canton of Ticino .
VAT (value added tax) is generally 7.7% but there are special / reduced rates for basic necessities and for the hotel sector, respectively 2.5% and 3.6%.
Opening a company in Switzerland is an even more valid option because the political and economic framework is stable, unlike the neighboring countries, where the elections and the new regulations introduced change working conditions regularly, and sometimes profoundly.
Opening a company in Switzerland has numerous advantages, in fact there is a complete deductibility of company costs : in addition to normal operating costs (social security costs, property costs, energy costs and administrative costs), you can also deduct all costs deriving from vehicles , transport, entertainment expenses, leasing and advertising.
Social security contributions, old-age insurance, survivors, disabled persons. Calculated on gross wages
Brief summary table concerning the contributions to be paid by employers and employees
* Limit amounts applicable to BVG coverage for 2020, 2nd pillar
The gross salary indicated corresponds to the annual salary (calculated over 12 months), while the contributions, calculated on the gross salary and equivalent to the old-age credits, vary from 7% to 14%, depending on the age and are at least half paid by the employer.
Furthermore, in the event of incapacity for work due to accident or illness, exemptions from contributions are made after a period established in the regulations of each individual Fund.
Generally this waiting period is between the third and sixth month of incapacity for work.
LPP contributions percentage of salary insured by age:
Allowances for children
The basic amount that you receive through family allowances in the Ticino area is CHF 200.— per month. The entitlement to the check arises and ends at the same time as the salary.
The training allowance for apprentices and students amounts to CHF 250 per month, and is recognized upon reaching the age of 16. It can be claimed up to the age of 25.
Tax at source
The withholding taxes are withheld from all workers who have a type G residence permit (cross-border commuters with daily / weekly return ) or type B (residents of the Swiss territory).
The employer is required to withdraw a percentage from the employee’s salary by withholding a paycheck to be paid to the Tax Office at source and stamp duty – Canton Ticino.
Income withholdings, such as withholding taxes, depend on the following parameters:
- Tax year;
- Gross annual income (including family allowances);
- Employee activity as frontier worker with daily return, with weekly return and residence;
- Main activity performed in Switzerland or ancillary;
- Marital status
- Dependent children
- Spouse / partner registered worker or non-worker.
Below is a link to give an idea of the calculation of the taxes that should be paid. It will vary based on the answers given.
Legal forms of companies in Switzerland
We essentially have four types of legal forms:
- SA ( anonymous company ) minimum share capital of CHF 100’000.-, at least CHF 50’000.- must be released, with at least one shareholder and one BoD, even if the latter may be the same person. At least one member of the board of directors with signature rights must reside in Switzerland. Exclusive responsibility for the share capital.
- Sagl ( limited liability company ) minimum share capital of CHF 20’000.-, at least one shareholder is a director, also in this case it can be the same person. The administrator ( managing director ) must be resident in Switzerland . Exclusive responsibility for the share capital. This corporate form differs from the previous one in that it does not guarantee the anonymity of the holders of the shares.
- Collective company , this is a company in which two or more natural persons join together under a joint venture with the aim of undertaking a commercial activity. This legal form is suitable for small businesses with more than one partner and mainly addressed as painting, plastering, cleaning companies etc. The requirements are at least two people and the company must be domiciled in Switzerland. An advantage of this type of company is that there is no need for equity to start, while a disadvantage is the joint and unlimited liability of each shareholder towards all creditors of the company.
- A sole proprietorship , it is a company without its own legal personality and is basically set up by many entrepreneurs at the start of the business as a startup . There are no particular requirements for this corporate form, which in fact only requires the registration of the owner and owner as a taxpayer with social insurance. It will be liable without limit and in first person for all the obligations contracted by the company.
To open a company in Switzerland, the costs of setting up the SA and Sagl is around CHF 3’000 including registration fees .
While, the cost of setting up companies in a collective name is around CHF 1,000 .
The cost of setting up the sole proprietorship is around CHF 1,000 .
We thank the partner IBC Fiduciaria for the editorial contribution on how to open a company in Switzerland, synthesis of their wide practical experience.
If you wish to explore the topic and get more information on the specific convenience of opening a company in Switzerland , or you need other corporate services, you can contact us via chat, telephone, or via the contact form .
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