Before investing in a country, one must be aware of the different types of business vehicles that the particular country allows to be incorporated. Apart from the types, being well informed about the business laws of that particular jurisdiction is just as important because the company laws in any location govern all the companies.
After understanding the basics of how companies are operated in that particular jurisdiction, you have to align the requirements of your business with a specific business vehicle that will suit your purposes.
A lot of factors are to be considered while choosing the most appropriate business vehicle while forming an offshore company in Switzerland:
- Registration time period
- Capital requirements
- Minimum Initial Investment
- Documentation Required
- Benefits of that particular type of business entity
These are some of the few factors that should be kept in mind before commencing business registration in Switzerland.
Types of Business Entities in Switzerland
1. Sole Proprietorship
This type of business entity is owned by a single owner or a sole proprietor. A sole proprietorship is only required to be registered in the commercial register if it produces at least CHF 100,000 gross income per year.
Mainly, a sole proprietorship is used for small-scale businesses. The owner is completely liable for all the losses and liabilities of the company, and all the tax requirements are to be obeyed by the owner himself.
2. Simple Partnership
Simple Partnership is also known as Einfache Gesellschaft in Switzerland. A simple partnership is an ordinary association between two or more partners to carry out a business. Each partner is individually liable to be taxed rather than the complete Partnership.
Each partner is also personally liable for the business debts incurred in the course of doing business by the Partnership. These are most famous for a short business operation known as joint ventures.
3. General Partnership
A general partnership has a trading name, and it is required by law to be registered in the commercial register. Two or more individuals must come together to form a contract of association to carry out business based on commercial laws and principles.
Liability can be extended to the partners' private assets because the Partnership itself is not a separate legal entity. This type of Partnership is also known as Kollektivgesellschaft KG in Switzerland.
4. Limited Partnership
Also known as Kommanditgesellschaft in Switzerland, a limited partnership can have two types of partners:
- A partner that can be liable for the business without any limitation
- A partner only liable to the extent of their capital contribution
There must be at least one unlimited partner with unlimited liability and at least one partner who is liable till the extent of their capital contribution. Only individuals can be established as a partner with unlimited liability, whereas a legal person can be used as partners with limited liability.
All the rights and duties are the same as that of a general partnership.
5. Limited Liability Company
It is a legal entity that has fixed capital. The minimum capital requirement to be met is CHF 20,000, and it has to be paid fully in cash or kind. At least one founder is required for the formation of a Limited Liability Company (LLC) in Switzerland.
Every partner (legal person or individual) has to participate with a capital contribution of a minimum of CHF 100 per share and must have a domicile and name registered in the commercial register. People who are not partners may enjoy the management and representation of the company, but a minimum of one managing officer must be domiciled in Switzerland.
Also, the partners and managers don't need to be Swiss citizens. This type of business vehicle is generally used for medium-sized companies and requires an equity capital of only CHF 20,000 for the formation.
6. Public Company
A public company in Switzerland is also known as Aktiengesellschaft. This type of business vehicle is the most common form you will see in Switzerland. The minimum capital required for starting a public company in Switzerland is CHF 100,000. At the time of formation, the founders are required to pay at least 20% of the nominal value of the capital (minimum CHF 50,000).
Capital contribution can be made in kind as well if these items can be contributed:
- Assets;
- Real estate;
- Patents & Trademarks;
- Goods;
- Equipment and Machinery.
Foreign investors often choose this type of company because of the easy method to transfer shares.
Our Role
Once you have decided upon the type of business vehicle you want to use for your investment, you should first and foremost seek the help of a business incorporation expert who will guide you through the incorporation process without much problem.
Business Consultants can help you start an offshore company in Switzerland with ease. We here at Business Setup Worldwide excel in providing incorporation services. Contact us today to get started with your offshore company incorporation journey in Switzerland.
