Company Formations in Switzerland
Interesting facts about Switzerland and general conditions for Company Formations in Switzerland
Switzerland is located in Central Europe and is neither an EU nor EFTA member state. However, Switzerland entered into negotiations with the EU between 1974 and 1999, to align existing laws to EU laws and regulations. As a result, EU citizens are allowed to live and work in Switzerland and vice versa.
Recently, Switzerland abolished harmful tax structures for holding companies and domiciled companies. Nowadays, all companies in Switzerland are taxed alike with no differences to holdings companies or trading companies. Interestingly, Cantons compete with eachother in regards to tax rates. One may find corporate tax rates from approx. 13% to 19%. Almost all Cantons levy minimum taxes for inactive companies.
There’s another important fact to mention. Despite multiple attemps from the Government, the public in Switzerland did’t want to amend the awkward regime for withholding taxes (WHT). There’s still a 35% withholding tax on dividends, interest, royalties and tax additions in place (if the tax office does not accept costs and expenses). Due to agreements with the EU, EU companies are able to recover any withholding tax paid if certain conditions are met. Previously, all withholding taxes had to be paid and one could (sooner or mostly later) expect a refund. Due to massive complaints and EU pressure, Switzerland introduced a reporting procedure for WHT. However, you will need to file multiple form in advance and this regime does not apply for tax additions. If you own a Swiss company and ran into tax and filings problems, you may contact us to discuss your case.
The labour market is good, but workforce has a high price tag.
The banking sector is stable with a good choice of local and international banks, so banking is not an issue.
Our international experienced and highly qualified lawyers, accountants and notaries will review your company structure, existing management or mandate contracts. We also offer review of your contractual arrangements at home and abroad. In addition, our tax and accounting department will be pleased to take care of your bookkeeping and tax returns.
Why not working with us – we offer company formations in Switzerland at a fixed price of 2.480,00 € net all-in. Enjoy our fast, reliable and competent approach in your native language (German, English, French, Czech, Slovak, Greek, Russian)!
Ideal Tax Framework for Limited companies or a holding structure
Switzerland had some kind of troubles due to a special tax regime for holding and domiciled companies as such tax structures had been abolish by the EU and international tax laws as well as OECD standards. Hence, Switzerland introduced a new, modern tax tax framework. However, there have been no changes to an awkward regime of WHT (withholding taxes) of 35%. Whereas,under normal circumstances, EU-companies will be able to recover the whole amounts, private people are bound to regulations of (Double Taxation Agreements) The Swiss legislation thus today fulfills all relevant EU standards, EU regulations, the OECD- standards, the FATF and the FSF.
Swiss companies are recognized throughout the European Union as EU companies with an extensive Tax Treaty Network. This circumstance is used particularly by holding companies. Switzerland nowadays has one of the most favourable Tax Regimes in Central-Europe and competes within the EU with Liechtenstein or Ireland, Malta and Cyprus but at higher costs.
Why not speaking to us to about the advantages of a limited company or holding structure.
What you need to consider if relocating to Switzerland
Thanks to bilateral agreements, negotiated between 1974 and 1999, the free movement of EU-citizens was extendeed to Switzerland, too. However, EU-citizens need to apply for a residency permit (Ausländerbewilligung B, C). You are also forced to exchange your current EU driving license to a Swiss license with the first year of your stay.
A long-term stay in a country for more than 183 days will usually (and automatically lead) to an unlimited tax liability for your world income. Some countries go even further and already assign this tax liability if you can permanently use your own apartment (this can even be the room in your parents’ house or a regularly visited hotel) which you can access with your own keys – knows as “Schlüsselgewalt” in German speaking countries. This rule establishes or maintains an unlimited Tax liability for your world income. If this subject is of interest, you may find out more on our dedicated website for Taxation. However, Switzerland takes a higher stance. If you like to work or run a business there, you will need to apply for a permit.
The often cited and in general used “183-Days-Rule” is not entirely correct. It can be only used to a limited extend as few countries (Germany) deem a personal tax liability if one spends in total more than 183 days within the country in two consecutive years, spanning two tax periods.
One can therefore only advise that people interested in relocating their place of residence not to rely on start-up agencies and other jokers – the pitfalls are simply too great and sound advice is required. A few advisors (specialized lawyers, accountants) study tax law for years, others do a weekend seminar or attend the Google University – where do you feel better off?
It’s amazing what’s on offer on the internet. Believe us – there is no point in having no tax residency/residence anywhere. If in doubt, you never gave up your original tax liability (in your country of birth) or you are automatically subject to tax through your passport.
If you have plans for company formations in Switzerland, it make sense to speak about your relocation in detail.
TOP Jurisdiction for a Residence in Central-Europe
Switzerland, however, offers ideal conditions for a tax residence. To obtain a tax residence, one need to stay more than 183 days in the country. With close links to other European countries, good flight connections and travel times of roughly two hours into the center of Europe, is this an ideal place to conduct business of any kind.
Of course, you are not allowed to stay in any other country for more than 183 days which would trigger an unlimited tax liability there. This concept is therefore ideal for everyone who can live and work flexibly (e.g. digital nomads).
If you come to us, you can rely on well-founded and legally sound advice. Together we will find your ideal life concept.
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