A steady economy, competitive in the international market, and comparatively low tax rates are what makes Switzerland one of the suitable locations for starting a business. To register your Swiss company, a company in Switzerland does not need to have a license to do business except in circumstances where the business is subject to licensing requirements.
The shareholders too, do not need to be Switzerland citizens. But in case of foreigners want to start a business in Switzerland, they must be a Swiss resident or have a business partner who is a Swiss resident. One of the ways through which a business can be incorporated in Switzerland is by establishing a Limited Liability Company. LLC formation comes with many advantages and is also one of the most selected business entities in Switzerland.
Advantages of a Swiss limited liability company
- Establishment of a Swiss LLC requires a reasonably low minimum capital and just one person.
- Liability is limited to the share capital.
- Any company name may be chosen, however, the capabilities “GmbH, Sàrl, or LLC should be added after it.
- An LLC can be modified into a limited company without liquidation.
- Profits originating from the sale of company shares are not taxable.
Documents Required to create a limited liability company in Switzerland
- Company Name of your wish
- Passport color scan copy of the director(s) and shareholder(s)
- Proof of residence not older than 3 months
- Bank reference letter or, 3-month bank statement
- Nature of business
- Business plan
- Full Details of the owner of the company; their names, address, and other relevant information
- The activities that will be developed under the LLC
- A draft copy of the Articles of Association
Main steps to setup your Swiss limited liability company
Cost planning of the company registration
When you create your Swiss company, the initial step is to budget your production costs. You need to incorporate the minimum capital amount of CHF 20’000 and then incorporate every detail regarding administrative and management fees. These include Consultancy fees for advice on how to set up the Swiss company, Notary fees, which are related to the deeds of incorporation, a fee for entry into the commercial register, and a Stamp duty fee.
Determining the Swiss company name
The next step is deciding on a Company name, which will be relatively protected throughout Switzerland. Choosing this company name is totally free, but you will have to add an indication of the legal form (GmbH, Sàrl, or LLC) which must be designated in the name of your company.
Setting the share capital
When you set up your LLC, you should determine the share capital and each participant’s main contribution. If this participation in the initial capital reaches or surpasses 25%, purchasers or holders must inform the company who is the beneficial owner of the participation.
Please note that to be entitled to the profits, each partner must partake in the share capital with at least one share.
Designate the management and partners
When you form a limited liability company, you can be solitary or with others. Hence, it is important to designate each person’s role to solidify a flawless organization. All partners must fulfill management functions, and make decisions on all matters that are not the general assembly’s responsibility.
Nonetheless, the articles of association may regulate the management of the company contrarily, for example by entrusting the management of certain aspects to third parties.
Drawing up a deed of foundation
To structure the LLC, you will need to draw up the deeds of the foundation and submit them to the notary.
When you draw up the articles of association, you should leave nothing out and address various points such as The company name, The amount of share capital, The purpose of your activity, The company’s headquarters, The partners, their role, and their number of shares, and finally, The company’s management.
Registering in the commercial register
After notarizing the foundation, you should register it in the Commercial Register, and Following your registration, you will be appointed a company identification number (CID / IDE) in the Swiss Company Register.
Defining the board and stakeholders
- The shareholders’ meeting: this is the assembly that approves the yearly report and appoints the management body. Its role is also to define the use of the profit or losses made by the company.
- The management body: this body can be endorsed by each partner of the LLC.
- The auditor: employers employing more than ten full-time employees must have their accounts audited by a certified auditor. This independent body will be responsible for reviewing the accuracy of the accounts every year.
Appointing these bodies is mandatory and essential for your company’s proper functioning. So it’s highly recommended to take the time to organize it properly.
Taxation
As a legal entity, the LLC is liable to double taxation. It will be taxed not only on its profit and capital but also on its assets.
VAT
You will need to clarify your VAT liability, based on both your sector and your turnover. But if your company does not have a turnover in Switzerland of at least CHF 100’000, it is not necessarily subject to VAT. Furthermore, for VAT to apply to your company, this amount of turnover must be generated from private individuals or companies that have their registered offices in Switzerland.
If you are subject to VAT, you must register with the Federal Tax Administration by going directly to their website.
Among the most prominent statutes, the private limited liability company attracts many entrepreneurs and could well fit your project. But before deciding to establish a limited liability company in Switzerland, it is necessary to know the modalities of its constitution.
Want to set up an LLC in Switzerland? Our team has years of experience in this field and will make your LLC company setup process in Switzerland hassle-free. Contact Damalion expert to create your Swiss limited liability company and open your business bank account in Switzerland.
