5 Simple Steps to Start a Small Business in Switzerland

The reason why Switzerland is the most sought-after country for starting a business is due to its political and economic stability, central European location, and liberal legal framework. No wonder there are so many business opportunities in Switzerland. The Swiss constitution allows anyone, including foreigners, to run a small business in Switzerland, to form a company, or have a financial interest in one. Entrepreneurs need to have a clear plan before starting a small business in Switzerland.

If you are looking for how to start a small business in Switzerland, this guide is for you. Let’s dive deep and learn more.

Benefits of Doing a Small Business in Switzerland

There are many reasons to start your company in Switzerland; some of them are listed below:

• Strong economy and financial infrastructure
• Politically stable
• The head office of many multinational firms
• Efficient and reliable administration
• Liberal labor market
• Liberal tax system

How to Start a Small Business in Switzerland?

Before you get started, first analyze the urgency and scale of demand for your product or service. Find out who your competitors are and whether the market can sustain your business. After following these instructions, you can continue with the following steps:

1. Start by Researching

Your initial steps must only contain researching the Swiss market. Find out who your competitors are and whether the market can sustain the business you are thinking of doing. You can also look up a company name in the Swiss Commercial Register to check whether the name you want is already registered. Then, research the feasibility of your idea. It involves gathering, analyzing, and evaluating information to help you formulate your goal.

2. Register a Company Name

Once you have researched and decided on the type of business you want to start, the next step is to register your company name. Here, make sure that you abide by the company name registration laws of Switzerland and select the name. After deciding, submit it to the Swiss Commercial Register for approval.

3. Choose a Business Structure

There are several factors to consider before registering a business in Switzerland. Firstly, you must understand the potential of your business idea, and secondly, you must choose the ideal structure for it. The following company structures are suitable for small businesses in Switzerland.

• Sole Proprietorship: A sole proprietorship, also called a one-person business, is the one where an entrepreneur himself is the owner of the company and does not share any profits or losses. This type of business entity is usually engaged in trade, manufacturing, and commerce, and has no separate legal personality. Anyone can start up a sole proprietorship in Switzerland at any time and begin operations immediately.

• Limited Liability Company: The Swiss “Gesellschaft mit beschränkter Haftung”, abbreviated “GmbH”, is a limited liability company established in cases where the founders are only liable up to the amount invested by them. A GmbH can be defined as an incorporated company with a separate legal personality in which one or more natural or legal persons participate.

• Limited Partnership: This type of company structure has two types of partners: general and limited. General partners have unlimited liability, whereas limited partners have limited liability. Aside from this, A limited partnership in Switzerland does not require any start-up capital. Moreover, partners are also liable for up to 5 years after the company's dissolution.

4. Register with a Trade Register

You must register your company with the trade register. Registering with the Trade Register in Switzerland means officially recording your company with the government to obtain legal recognition as a business entity. It ensures your company’s name, address, legal form, directors, and shareholders are part of the public record, allowing you to operate legally, open bank accounts, enter contracts, and maintain credibility with partners and clients.

5. Carry Our Operating Activities

Once you have successfully registered your firm, you can start trading.

Key Requirements for Starting a Small Business in Switzerland

Every business structure has different requirements for company formation in Switzerland. Here are the key requirements for business structures mentioned above:

• Sole Proprietorship

• The owner does not need to be domiciled in Switzerland, but they require a work permit and a residence permit. 
• The owner has unlimited liability. 
• There is no minimum capital requirement.

• Limited Liability Company

• A resident manager or a director is required.
• Requires a minimum contribution of CHF 20000, with a mandatory share value of CHF 100.
• Share capital can be held in foreign currencies.
• Required to keep and submit accounts in accordance with the rules established in the Code of Obligations.
• Shareholders' liability is only up to the capital invested by them. However, they may have to pay extra if mentioned in the articles of association.

• Limited Partnership

• Must have one general partner and one limited partner.
• The owner must have a work permit and a resident permit.
• Both limited and general partners are responsible for managing the firm.
• A firm must keep simplified accounts if the turnover does not exceed CHF 500000. If the turnover is more, it must keep and submit accounts as per the Swiss Code of Obligations.
• No minimum capital requirement.

Starting a small business in Switzerland can be overwhelming, especially if you are unfamiliar with the legal framework. At this point, you can look for a consultant/advisor who is well-versed in the process and can guide you effectively through it. Business Setup Worldwide can help you start your small business in Switzerland. We will help you right from choosing your business structure to opening an international bank account. Contact us today—we’d be happy to help.