To set up a business in Switzerland, you need to learn more about the company’s legal system and how the company is divided. Switzerland features a legal system based on Roman civil law. United into 26 states, Swiss law covers federal, cantonal, and communal matters. Most of the business laws or commercial legislation are overseen federally.
On the other hand, cantonal law may cover certain rules related to a specific business’s operation. Therefore, the law may cover operations such as regulated activities, administrative processes, or planning and construction.
The Two Main Business Entities
When setting up business in Switzerland, you will find that the country’s two main business vehicles include the following:
- A company limited by shares
- A limited liability company
Both of these types of vehicles display different legal aspects and membership fuelled mainly by capital contributions. Both of these forms of business possess sole liability of their debts, exclusive of individual members. A company limited by shares is often used to form small and large businesses, including companies listed on stock exchanges.
Because a limited liability company requires less start-up capital, it offers more flexibility with respect to governance. Limited liability companies must also comply with certain limitations that relate to the transfer of shares, shareholder disclosure, and commercial register identification. If you want to set up a limited liability company, it is easier to do so if you are smaller.
Types of Legal Forms for Business Setups
A number of legal forms can be used for business. For example, a co-operative is used for a non-profit organisation that supplies a benefit directly to members. Association forms are used by professional companies that do not perform commercial operations. A foundation represents a legal entity without members. It usually is used for charities and therefore often features beneficiaries.
You can also use a number of unincorporated business forms including a sole proprietorship, a simple partnership, a general partnership, and a limited partnership. If you are a foreign business that wants to establish its presence in Switzerland, you can do so by establishing a local branch or incorporating a subsidiary of your company.
Why Switzerland Offers an Advantage
As you can see, businesses and entrepreneurs have a number of choices when it comes to doing business in Switzerland. Most companies like to incorporate in Switzerland because the country offers tax advantages that set it apart.
Once you set yourself up as a company on Swiss soil, you need to learn more about the proper methods for executing deeds or contracts and what financial reports should be submitted annually.
Swiss-based companies must prepare financial reports to comply with the Swiss Code of Obligations, or CO. Financial results are combined with the yearly business report and submitted to the proper body. Annual accounts include a profit and loss statement, balance sheet, and any comments about each of the accounts. Larger companies must use the services of an auditor if they exceed financial thresholds during the year. That is why you need to obtain help from a company that offers formation and administration services in Switzerland.