Incorporating in Switzerland
After having spent the last few months setting up my own company in Switzerland I thought I would write up a quick step by step guide which might be helpful to others.
First impressions
If you have experience with incorporating overseas (in my case New Zealand and Australia) get ready for what must be the most beurocratic paper heavy process you’ll ever have the priviledge to endure. It took me about 3 months to get everything lined up and squared away. Your mileage may vary but it’s far far away from filling out a few forms online and paying a fee to register your LLC or Ltd. A process that literally takes under an hour in New Zealand and slightly longer in Australia.
What you will need
- A Notary or accountant to help with setting up the company statutes for the commercial register. Getting the paperwork filled out and notarized approx. 1 week. I used IFJ Startup Support to register the company. They give you a login where you can track all the documents required to be filled out. Just be aware that they are located in St. Gallen which means even though they have most things in English you will have to be comfortable getting some information in German and because I am situated in the French speaking part of Switzerland I also received some things in French.
- Commercial register - plan up to 3 weeks for the commercial register to process the application after step one is completed. This can also cost up to CHF 750 above what you might have paid IFJ or your notary.
- A bank to pay in your starting capital (CHF 20'000) - I used PostFinance as it gave me a discount with IFJ and they took care of opening it for me after I filled out all the forms.
- Software to run the accounting of your company - I chose Bexio. Keep an eye out on their specials that generally are offered towards the end of the month. If you are used to Xero, Bexio tries to do the same for the Swiss market. They were founded about 7 years after Xero and that’s about how far behind they seem to be as well. Nevertheless - it’s one of the better options in Switzerland. Choosing Bexio made me reconsider using PostFinance as you have to log in to your ebanking every single time whereas they have a direct feed with UBS. If you have many transactions it might be better to go with UBS instead.
- An accountant who knows Bexio - I can’t stress how helpful this is. Bexio offers setup help but in my opinion it’s way overpriced and I’d rather start working with an accountant on a long term basis who can help me get everything set up. I paid my accountant for 2-3 hours of work which meant everything from account plan to payroll was set up correctly
- Insurances - get ready for the jungle that is the Swiss social insurance system. Plan in at least 3-4 weeks for all the paperwork and just getting your head around everything. For all of these you will need to know in advance what your salary is going to be. Set it a bit low to start with - there will always be a true up and your accountant can help you with this.
| Insurance EN | DE | FR |
|---|---|---|
| OASI Old-age and survivors insurance | AHV Alters- und Hinterlassenenversicherung | AVS Assurance vieillesse et survivants |
| DI Disability Insurance | IV Invalidenversicherung | AI Assurance invalidité |
| LEC Loss of Earnings Insurance | EO Erwerbsersatz | APG Allocations pour perte de gain |
| Unemployment insurance | ALV Arbeitslosenversicherung | AC Assurance-chômage |
| Family allowance | FAK Familienzulagen | AF Allocations familiales |
| OP Occupational Pension | BVG Pensionskasse | LPP Caisse de pension |
| OAI Occupational accident insurance | UVG UVG-Versicherung | LAA Assurance-accidents obligatoire |
| Supplemental accident insurance | UVGZ UVG-Zusatzversicherung | LAAC Assurance-accidents complémentaire |
| Daily allowance insurance | KTG Krankentaggegeld-Versicherung | PGM Perte de gain maladie or ACIJ Assurances indemnité journalière |
Create a login at easygov.swiss which will help applying for the mandatory insurances digitally.
AHV/IV/EO/ALV (DE) or AVS/AI/APG/AC (FR) depending on which part of Switzerland you are in, these will all go via one provider. You can choose the cantonal one - DON’T - or a private one. I went with Centre Patronal you can apply for it directly via easygov.swiss via Application OASI/IV/LEC/ALV
Family allowance can also be done via Centre Patronal and will be paid directly to you.
You will also need a pension plan as well as accident insurance which are mandatory but are available from any of tha Swiss insurance companies. You can also elect to extend the mandatory cover for accident insurance or up your pension plan contributions but to start with you might want to keep your costs down and ammend these a bit later on. Most insurance companies have start-up rebates so be sure to ask for them.
The only completely non-mandatory insurance is your income protection insurance which can be done via the company. The company is obligated to continue paying your own salary even if you are the sole proprietor based on the salary you chose for yourself. It might be good to get additional insurance so that it covers your income rather than using up the companies capital.
Other insurances - you might also need liability insurance or be required to join the mandatory fire insurance of your canton etc. but this is out of the scope of this post.
Tax registration for MwST / TVA (VAT) can also be done via easygov.swiss.
You will also receive a letter from your cantonal tax office asking for some information to estimate your tax bill for the current or following year. If you are registering your business in the second half of the year be sure to extend your business year to the end of the following year (max 18 months) so that you don’t have to pay all the taxes etc. after less than 6 months.
Lessons learned
Try and do anything you can online and be patient. All these companies are set up to keep the Swiss postal system working and your mailbox full every single day. Unfortunately this means things take a long time because relying on snail-mail just makes everything excrutiatingly slow. I mostly ignored the postage paid reply envelopes and forms and tried to find the same ones online, filled them out and sent them back digitally. So far this was accepted in every case but finding the forms and a place to send them to can be a bit tricky. I requested all insurance documents as PDFs which I promptly received the same day wereas the letters took a good week to get to me.