Switzerland

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Switzerland

General information about the jurisdiction

Switzerland, in its full name the Swiss Confederation, is the state in the heart of Europe with four official languages and a federal structure (it consists of 26 cantons).

Switzerland distinguishes lovely nature, high-tech technology and stable financial systems which allows the state to remain a neutral country (Switzerland is not part of the EU or any military organizations). Well-developed infrastructures, political and economic stability, in addition to low taxes make Switzerland a very attractive place for living, leisure and doing business.

1. Legislation

Company activities in Switzerland are regulated by Civil Code and Code of Obligations.

2. Company formation

2.1 Types of companies

The most acceptable form of companies in Swiss may be the following:

  • Joint stock company (AG);
  • Limited Liability Company (GmbH). 

2.2. Joint stock company (AG):

  • The minimum authorized capital – 100 000CHF (approximately 105 000 USD), 20% of which must be paid by depositing funds into a bank account. The bank will monitor the funds until the issuing of the certificate of incorporation.
  • Shares – registered and/or bearer, the minimum cost of a share – 0.01CHF.
  • Director – at least 1 individual, who is a Swiss resident. Non-resident individual may also be appointed as a director in the Board of Directors (in this case the majority of which must be Swiss residents). All directors must be shareholders (it is enough to own at least 1 share).  
  • Members – at least 1, individual or legal person, no residency required.  
  • Secretary – not required.
  • An auditor should work in the company on a regular basis. 
  • Publicly available information: information about the directors kept in the Company Register.  
  • Company is obliged to keep and submit an annual financial report. 

2.3. Limited Liability Company (GmbH):

  • The minimum authorized capital – 20 000CHF (approximately 21 000 USD), 100% of which must be paid by depositing funds into a bank account. The bank will monitor the funds until the issuing of the certificate of incorporation.
  • Shares – ordinary, the minimum cost of a share – 100CHF.
  • Director – at least 1 individual, who is a Swiss resident. Non-resident individual may also be appointed as a director in the Board of Directors (in this case the majority of which must be Swiss residents). 
  • Members – at least 1, individual or legal person, no residency required.  
  • Secretary – not required.  
  • An auditor should work in the company on a regular basis. 
  • Publicly available information: information about directors kept in the Company Register, about members – in the Commercial Register.
  • Company is obliged to keep and submit an annual financial report. 

3. Taxes

There are three levels of taxation in Swiss: federal, cantonal and municipal. Each canton has its own tax legislation and is free to set tax rates and tax incentives.

Federal tax -  8,5%.

Cantonal taxes are higher and depend on the ration of profits and capital and reserve fund – 6 – 31%.

Withholding tax:

Dividends – 35%

Interest – 35%

Royalties – 0%

Payments to affiliates – 0%

VAT – 7,6%

Tax on capital:

Federal – 0%

Cantonal/municipal - 0,3 – 1,3%

Some cantons, like Zug, set the preferred system of taxation that can be useful when choosing a place for company registration. 

4. Currency control

None

5. Agreements on avoidance of double taxation

Switzerland concluded more than 70 agreements on avoidance of double taxation, including Ukraine.

6. Features

When registered a company in Swiss, be aware that the Swiss law has two levels (federal and cantonal) and might differ at the local level.

The most attractive on the part of a tax perspective is Zug canton. You may also register a company in Luzern, Vaud, Baar, Herisau, Bern, Geneva.

It should be noted, that there must be a statutory reserve of the company, which can reach 20% of the paid-up share capital and is used in emergencies (economic crisis, big losses etc.).