Switzerland is a picturesque country which enjoys a central location in Europe and attracts thousands of tourists every year. The tourism industry is a substantial contributing factor in the country's economy and conferred a whopping 2.9% to the Swiss GDP in 2018. After a disappointing 2020, which witnessed minimal travel due to a worldwide pandemic, tourism is bound to gain traction again, and the foreign investors planning on setting up a company in Switzerland must be well-prepared.
Switzerland boasts scenic lakes, eye-catching mountain ranges, unique traditions, and many other tourist landmarks which receive thousands of visitors yearly. No wonder the hotel industry also witnesses a significant boom when the number of travellers reaches a peak. Besides receiving tourists with great interest in the stunning locations, the country also sees many business travellers from all over the world due to it being a global business hub.
Read on to learn more about setting up business in Switzerland.
Pick the Right Legal Entity for Your Hotel Business
A business haven, Switzerland is famous for its tax incentives, business-friendly regulations, and strong privacy laws. First and foremost, you will have to choose a legal entity type for your hotel as any type of business in the country can be conducted by a legal entity only. After picking the correct legal entity, you can go ahead and get it registered.
The GmbH is the perfect and most convenient choice for investors hoping to kickstart a hotel business. A GmbH is a private limited liability company that can conduct a wide range of commercial activities, including the service sector.
A GmbH mandates a minimum share capital of 20,000 CHF (Swiss Francs) with one or more shareholders. However, at least one of the company's directors must be a Swiss national.
What Are Business Permits for Hotels in Switzerland?
After choosing the correct legal entity for the hotel business, foreign investors will have to acquire all the necessary business permits for running a hotel business. The licenses serve to authenticate the sole fact that the hotel's activities are in line with the local laws and legislation applicable for accommodation units.
If you wish to build a brand new hotel from the ground up, you will require a construction permit which has to be issued by the Municipal Building Authority. You will also have to offer the building plans to get your hands on the construction permit. After the construction has begun, the Municipal Building Authority will conduct inspections for excavation and scaffoldings.
Before starting a business in Switzerland on hotels, you will also have to obtain a fire permit from the fire permit. This permit warrants that the building in question does not represent any fire-related hazards.
Furthermore, you will also have to obtain a permit from the Department of Waste and Recycling as all types of businesses need to collect waste as per predetermined procedures.
Other approvals include approval for electric supply, water supply, sewage, and sanitary approval. Finally, as an investor in the hotel industry, you will have to get a special business license to successfully fulfil company incorporation in Switzerland.
Taxation Rules for Hotel Businesses in Switzerland
One of the reasons behind so many foreigners investing heavily in various businesses in Switzerland is its flexible tax regime. The country boasts one of the lowest VAT rates across the world. Switzerland is not a part of the European Union and need not meet any tax requirements set in place by the EU.
The standard VAT rate in the country is 8%. However, businesses involving hotels and other accommodations can obtain a VAT rate as low as 3.8%.
Other Significant Details about the Hotel Industry in Switzerland
Hotels in Switzerland operate based on a star system, just like those practised in Australia and the United States. One star is provided to those hotels which offer basic requirements. Meanwhile, five-star hotels are more luxurious. Switzerland also boasts some of the best schools in the field of hospitality, which means that investors can take their pick from a highly skilled workforce at their disposal.
Tourism in Switzerland is expected to make a stellar return after a dismal 2020, which implies that the hotel industry will also witness the influx of huge profits. Thus, the time to invest in the hotel industry is now. Get in touch with us today to learn more!