Yes, you can! Incorporating a startup in Switzerland is a straightforward process that can be done independently. Here are the key steps to follow:
In Switzerland, there are four commonly used legal forms for business incorporation:
Many startups opt for incorporating as an SA/AG because it allows them to attract investment and create favorable share structures for investors. However, if you initially choose to incorporate as a GmbH and plan to seek investment later, you will need to convert your Sàrl/GmbH into an SA/AG, which can be a complex and costly process.
Decide on the distribution of equity among the founders when incorporating your Swiss startup. Keep in mind that the equity split also requires a corresponding capital contribution. For example, if there are two founders and they agree to split the equity evenly (50% each), each founder must contribute 50% of the minimum required capital.
For GmbH and AG incorporations, you will need to open a "Capital Account" with a bank. This account allows you to deposit the minimum capital required for GmbH (CHF 20,000) or AG (CHF 100,000, of which 50% can be in kind). Once you deposit the funds, the bank will issue a certificate that you can use to incorporate the company with the commercial register.
Preparing the necessary documents for the commercial register and finding a notary can be a complex process. It is advisable to engage a reliable lawyer, such as Lexr, to help with the incorporation at an affordable cost. They will assist in preparing the required paperwork and filing it with the Swiss authorities. Additionally, having a competent lawyer early on can be beneficial for future fundraising or employee stock option plans.
Once the documents are prepared, a notary will validate the identity and signatures of the founders. The founders must sign the documents using wet signatures (not digital signatures). This can be done through a zoom call, where the notary will verify the passports and identities of the founders. Alternatively, in-person meetings can be arranged if preferred.
Your company will be listed in the commercial registry, confirming its incorporation. You can check the registry at the government's central business name index. This confirmation finalizes the process of incorporating your startup in Switzerland.
After incorporating your startup, there are additional obligations to fulfill:
If you have an AG or GmBH and your employees work less than 8 hours a week, you will only have to subscribe to the Federal Law on Occupational Accidents (UVG/LAA).
If your employees work more than 8 hours per week, you will have to take out accident insurance known as UVG/LAA for occupational and non-occupational accidents. You can do this through the various insurance providers like Axa, Zurich Insurance, Helsana and others. A great digital solution is Helvengo.
As a self-employed person you do not have to take out accident insurance. You are only legally obliged to insure yourself against the consequences of an accident in your private, compulsory healthcare insurance. This covers benefits at the level of medical expenses.
Other insurances that are recommended for your company include:
If salaries exceed the annual amount of CHF 21'150.-, you will be obliged to register your employees with a 2nd pillar pension fund (BVG/LPP).
In addition, if you have employees less than 18 years of age, you do not need to take out a 2nd pillar pension fund (BVG/LPP) for them.
The company has to pay at least 50% of the employee's pension and can choose to pay more even up to 100% should they wish.
You will be asked to choose and register as an employer with a compensation fund (AVS/AHV) in the canton. For example, if your business is based in Zurich, you will need to register your company and employees with SVA Zurich.
If you have multiple branches in different cantons, you will need to register them with a specific fund in the canton. For example, you could have a branch in Zurich and a branch in Vaud, you will then need to register your company and employees with a fund in each canton for example SVA Zürich and Caisse cantonale vaudoise de Compensation AVS.
Please note that some cantons have more than one compensation fund. For example in Geneva you could choose to register with the Office cantonal des assurances sociales de Genève or Fédération des Entreprises Romandes both located in the canton of Geneva.
This compensation fund covers you for the below insurances and allowances.
When you register with the canton, they will provide you with a list of social charges you need to include in your payroll. Some of these charges affect only the company but others can also affect the employee.
You will receive a family compensation contribution which the company must pay to cover family allowances. In the Caisse cantonale vaudoise de Compensation AVS for example, this rate is typically 2.65% and is taken from the salary paid to your employees. To be clear, this is a charge only for the company meaning this will not be deducted from the employee’s payslip.
In addition, there could be deductions which the canton will require from the employee depending on the canton. In Vaud again, employees and employers are required to pay 0.06% of the gross salary to cover what’s known as the Cantonal supplementary benefits for families (PC Familles). In Zurich for example, there is no such charge for the employee.
In addition, the canton will also provide you with an AHV administration fee. This is the fee they charge you for processing your taxes.
Non Swiss employees will have been assigned a permit. These range from the below.
Should your employees not have a C permit, you will need to register them with the withholding tax office. This is a separate tax office from within the cantonal government. For example, in Zurich, you will need to register your employees with Quellensteuer | canton Zürich.
Please note that you need to register your employees with the canton they live in and not where the company is based. For example, if your company is based in Zurich but your employees live in Zug, you will need to register with the withholding tax office with the Quellensteuer - canton Zug.
The office will provide you with a withholding tax number which is used to identify your company and your employees when you submit your employees withholding tax amounts each month. Because businesses are the ones submitting withholding tax amounts, the withholding tax office lets you deduct a specific percentage when you submit. The withholding tax office will provide you with this percentage upon registering your employees.
For example, they may say that you can deduct 2% from the withholding tax you submitted. This means that if you submit CHF 1,000 in withholding tax that was collected from your employees, you only have to pay CHF 980 and can keep CHF 20 for yourself.
Several services can assist you in incorporating a Swiss company, such as NewCo and Startups.ch. These services can expedite the process and handle administrative details efficiently.
With the help of these resources and following the steps outlined above, you can successfully incorporate your startup in Switzerland and embark on your entrepreneurial journey.
At Earny, we specialize in payroll management services. We understand the intricacies of Swiss payroll regulations and can assist you in managing your payroll tasks efficiently. Our advanced software simplifies payroll processes, ensuring accurate and transparent payroll solutions for your startup. Let us handle your payroll, allowing you to focus on growing your business. Contact Earny today to simplify your payroll management.