Some aspects concerning business organization in Switzerland

This article will help you to understand what is required to open company in Switzerland.

20:40 09 February 2023

This article will help you to understand what is required to open company in Switzerland. Namely, today we will review the aspects of opening up a subsidiary or a branch of an existing firm. The review of a non-profit company and ways of administering the business in Switzerland will follow after.

How to establish a branch or subsidiary in Switzerland

Vast opportunities for any business to grow and prosper, low risks of bankruptcy and low rate of criminal situations, support from the government, transparent tax policy, modern infrastructure, top education, and skilled employees promise a lot for any prospective enterprise. Switzerland has always been a hot spot for trading and therefore many companies from abroad decide to open up a subsidiary or a branch in the country. Any branch is considered to be a financially independent part being at the same time legally dependent upon the holding company established beyond Switzerland. In other words, despite the branch has a separate account it continues to trade using the same name where the holding enterprise is completely responsible for all finances and liable for any possible debt.

As a subsidiary, it can be described as a company that operates as an independent company in legal terms being either Sàrl or SA/AG. The holding company located abroad is the owner of some part of the capital and keeps hold of control when it comes to decision-making. Usually, it is performed via board membership. At the same time, the parent company has some limits in liability, which is equal to the amount of investment in the subsidiary. 

All subsidiaries and branches must register as businesses applying to the local authorities. One of the demands is that at least one of the representatives from the holding company must be a Swiss resident. Their operation is performed in the same way as it is done by all enterprises in Switzerland. They must maintain books and pay Swiss taxes taking advantage of some fiscal loosening and double taxation treaty.

Subsidiaries must have their own articles of incorporation and keep them identical to the holding company's minimum share capital demand. As for the branches, they are not obliged to have their own articles of association and they may use certified copies. Local authority demands proves of the decision to open up a branch in the country. In most cases, it is minutes of the meeting showing that the appropriate decision has been made.

The review of how to start a non-profit company in Switzerland

When you made up your mind to found a non-profit institution in the country the first step that you have to do is to establish an association. The way to carry on an association in Switzerland is much the same as to do business. The only difference is that an association is non-profit. Such an association can be involved in commercial operations but all investments must be done back into the association or into activities that meet its goal.

At least two founder members are required in order to register a Swiss company. These members can be either enterprises or individuals that must enter into the Swiss trade register. In the event that an association is engaged in commercial operations and it has 10 million francs of assets and 20 million francs of turnover for the next two years, it must enter the commercial register. All associations must have articles of association that describe in detail the main targets. In addition, they must include a board of management that consists of at least one member, an auditor, and a general meeting made every year. There is another sort of philanthropy organization known as a foundation. The peculiar feature of a foundation is that it can be involved in all commercial activities and be incorporated into a valid company; however, it must be carried on only when taking into consideration the founders' preferences and feedback. Many wills in the country contain a part of such wishes. Federal Foundation Supervisory Authority in Switzerland regulates all kinds of foundations in the country. Any foundation must include at least CHF 50 thousand of minimum share capital and has to enter the trade register.

Now let us recall how to administer a business in Switzerland

Any law firm in Switzerland will explain that every enterprise in the country must keep the papers of their accounting for the next 10 years. In general, keeping the records depends upon organization size. For example:

• Such legal entities as companies, foundations, and associations including sole proprietors and partnerships that have had more than 500 thousand francs of sales proceeds in the previous financial year must keep all accounts and be ready to report on financial statements.
• Sole entrepreneurs and partnerships that have had less than 500 thousand francs in the last financial year, foundations and associations, which are not present in the commercial register, and foundations that are exempt from auditing demands in accordance with a relevant Article in the Swiss Civil Code need to keep their accounts on the receipts, charges, and material status.

Every organization in Switzerland being in the status of a legal entity must undergo an annual audit. The only exception is when a company has less than 10 workers and all owners of the business agree to refuse it. Almost every small enterprise has just a limited audit. A full audit is performed for businesses:

• When their balance sheet statement exceeds 20 million francs.
• When the revenue is more than 40 million francs.
• That contains 250 and more full-time employees.

Many most popular software packages exist to support you in accounting and administering.

The list of information that any invoice must contain in Switzerland:

• The name of the organization and its address.
• The date of invoice.
• The number of the invoice.
• The list of commodities and description of services provided including the rate.
• The enterprise value-added tax number if there is any.
• Final amount with value-added tax. Details are required in case the value-added tax is assigned to every article