Lugano, Ticino, canton of Switzerland is well known as an international hub for commodity trading. The flexible Ticino system offers an opportunity for investors to discuss with tax authorities about their project to setup their companies in Lugano and to assess their tax obligations. International steel trading represents 2% of the canton’s GDP. Extensive trade finance for raw materials for example makes Lugano, the perfect location for your international trading activities.
Switzerland, international hub for commodity trade
The major reason why Switzerland is the most sought-after country for starting a business is due to its political and economic stability, central European location, and liberal legal system. The Swiss constitution enables anyone, including foreigners, to run a small business or form a company or have a financial interest in one, in Switzerland.
Before diving into the steps involved in forming your company in Lugano, Switzerland, let us first understand why Lugano is an attractive location for company registration.
Why Lugano, Switzerland?
Switzerland is one of the world’s most prominent commodities trading centers with over 500 trading companies, mainly located in Geneva, Zug, and Lugano. An advantageous tax regime and access to discreet banks with good expertise in commodity trade financing are what drew traders to Lugano.
But Lugano is about commodities trading only, so when it comes to all businesses in general, Lugano offers the following benefits:
- Lugano offers an excellent inspiring business environment with an extensive range of service providers, extraordinary business infrastructure, political stability, and security.
- Its highly educated workforce and multicultural population transmit a creative drive to many parts of the city’s economy.
- Lugano offers a traditionally solid banking system as well as specialized banks, serving the detailed requests of the trading business.
- Trading companies (raw materials, oil and gas, mining) in Lugano are generally treated as auxiliary companies and could accordingly benefit from favorable taxation due to the majority of overseas to overseas activities.
- A favorable geographical position on the North-South axis across Europe.
With 10% of the GDP spent on health, you will also benefit from exceptional medical facilities while living in Lugano.
Steps to Start your Swiss Company
Researching
Entrepreneurs need to have an understandable business idea in Switzerland before they eventually move to start a business there.
As many people are interested in how to start a new business in Lugano, Switzerland, the initial thing to do is determine whether your service or products are attractive, who your competitors are, and can your business resist the test of time. You need to do some research to define the feasibility of your business idea. After gathering, analyzing, and assessing the market and the information you collect, you can then develop your business goals.
Register a Company Name
Once you have researched and determined the type of business you want to start, the next standard step is registering your company name. Make sure that you abide by the company name registration laws of Switzerland – it has to be different and it should not resemble other companies’ names, besides, it has to indicate the form of company ownership. After deciding, submit it to the Switzerland Company Registry for authorization.
Choose a Business Structure
There are several factors one must consider before registering a business in Lugano, Switzerland. First and foremost, it is important to understand whether you have a successful business idea and secondly, you have to choose the right business structure for it. There are six different types of business entities through which you can start your venture in Lugano, Switzerland:
- Single-owner company
A single-owner company is a common structure selected by individuals that will work for themselves. With this structure, one individual likely runs the company, and they must be a Swiss resident. Their name must be a part of the business name, and they have unlimited liability.
- General partnership
This general partnership structure includes a group of people that operate a commercial business. It’s similar to a sole proprietorship, except there are many people involved. There isn’t limited capital required, but everyone involved must be a Swiss resident, and the company must be located in Switzerland. Furthermore, one of the partners’ names has to be in the company name.
- Limited partnership
A limited partnership is uncommon and is a form of a general partnership. The distinction is that general partners share unlimited liability, while limited partners are only liable for a specific amount. This company must register with the Chamber of Commerce.
- Corporation/Joint-stock company (AG/SA)
The most popular structure for companies recognized as legal and independent entities is this. A director or a board member of the company must be a Swiss legal resident with signatory rights. Alternatively, two board members can have joint ownership and be Swiss residents.
- Limited liability company (GmbH/Sàrl)
A limited liability company requires that all of the company members have to partake in the operation and management of the company. Members are, however, authorized to transfer decision-making rights to non-members. This type of company is cost-efficient, and all shareholders must register with the Chamber of Commerce.
- Subsidiary
A subsidiary is an independent and legal company that has an association with a foreign company. They commonly function more like a Swiss company, and they can appear as an LLC or a corporation.
- Branch
This structure is a segment of the headquarters that operates outside the country. A branch legally relies on a foreign parent company but pays Swiss taxes independently as a Swiss company would. The parent company accepts all liability, and one member of this structure must be a Swiss resident.
For foreigners wanting to set up a business in Lugano, Switzerland, it is significant to note that they must be a Swiss resident or have a Swiss legal entity or a partner who is a Swiss resident.
Documents needed for a company formation in Lugano, Switzerland
To obtain a legal personality, all companies registered in Lugano, Switzerland must register with the Commercial Register. To do this, the founders must submit an application containing a wide set of legal documents, providing detailed information on the future business and its activities. Below are the documents and information required in the process of a company formation in Lugano, Switzerland:
- The articles of association,
- Specimen signatures of the managing board,
- Stampa Declaration Form and Lex Friedrich Declaration Form and information on the registered office of the company,
- information on the social capital of the company and the main objects of activity that will be conducted through the new legal entity,
Note that other documents may be required, but it depends on the type of business chosen for registration.
Steps involved in registering a company in Lugano, Switzerland
The procedure for registering a small business at the Swiss company register is quite straightforward as long as you know all the necessary documents that must be submitted to the registry. The process to open a business in Lugano, Switzerland involves the following:
- Filing out an application form for company registration,
- Preparation of necessary documents – articles of incorporation, statutes, etc.,
- Draft the Articles of Association in the presence of the notary public,
- Create an escrow account to hold a paid-up capital,
- File the Articles of Association with the Switzerland company register,
- Pay a stamp tax,
- Publication in the official journal of the canton,
- Register for the VAT, and
- Enter the employees of your company into the social insurance schemes on the federal and cantonment level,
When you are done with all this, you must provide all the supporting documents, and the Commercial Registry will go through your application to check for authenticity, after which they will approve the application and make your company registration in Lugano, Switzerland.
Are you in commodity trade, in import-export of raw materials? – Register your Lugano company now to grow your business from Switzerland to the world, Contact your Damalion expert.
