Although not a member of the European Union (EU), Switzerland is considered a great location to expand because of its lack of restrictions on foreign-owned companies. However, the expansion process is not always straightforward. You must establish a subsidiary in Switzerland or find a proper subsidiary alternative before you can hire employees, run payroll, and come up with a benefits and compensation plan. Globalization Partners is the alternative to establishing a Switzerland subsidiary you need to start operations quickly.
How to Set Up a Switzerland Subsidiary
If you decide to set up your Switzerland subsidiary alone, you’ll need to research and discuss several factors first. Switzerland’s various cantons can make it difficult to expand as each state has unique laws regarding incorporation. It’s essential to research the subsidiary laws for each canton and figure out which area is best for your industry or business. You can also choose a location based on existing trade agreements or relationships.
Language is also necessary to keep in mind. Switzerland has four national languages — French, German, Italian, and Romansh — and French, German, and Italian are all official languages. Most citizens speak German — however, this language is often a Swiss-German derivative of regular German. Most business procedures are conducted in German, Italian, and French instead of English, so you’ll need to hire employees who speak the language or find a translator.
You will also need to decide which business structure is best for you during the Switzerland subsidiary setup process. The three most common structures are liaison offices, branch offices, and limited liability companies.
A private limited liability company is the most popular type of subsidiary. To establish this type of subsidiary, you’ll need to:
- Check the trade name
- Put paid-up capital in a bank
- Notarize Articles of Association
- Submit declaration forms
- Register at the Commercial Register
- Pay Stamp Tax at a post office or bank after getting an assessment by mail
- Register for VAT
- Enroll employees in the Social Insurance system
Switzerland Subsidiary Laws
Switzerland does not place any restrictions on foreign ownership, but every type of company requires at least one person to reside in Switzerland. Individuals outside of the EU who want to run the subsidiary in Switzerland or move foreign staff members to the area will need a work permit (TWV).
Since Switzerland is not in the EU, rules related to EU immigration and visas will not apply. However, Switzerland is a member of the Schengen region, so there is open access between Switzerland and other countries such as Germany, France, and Scandinavia. Since someone will need to live and work in Switzerland to run the subsidiary, you will also need to apply for a residence permit.
Benefits of Setting Up a Switzerland Subsidiary
Setting up a subsidiary is the first step to conducting business in Switzerland. Incorporating as a limited liability company provides even more benefits because it protects both the subsidiary and the parent company. The subsidiary can operate independently from the parent company and utilize a business structure that fits Switzerland’s culture. If the subsidiary incurred any significant losses, the parent company would not be impacted.
You’ll enjoy even more significant benefits by choosing an alternative to establishing a Switzerland subsidiary. Globalization Partners offers you all the advantages of a subsidiary without needing to undergo the lengthy and complicated process to set one up. We can set up your Switzerland branch in a few days instead of the months it would take to establish your own subsidiary. We also know all of the ins and outs of Switzerland’s subsidiary laws, so you won’t have to worry about compliance.
Other Important Considerations
You’ll need time and money to set up a Switzerland subsidiary on your own. You or someone else from your company will need to travel back and forth to Switzerland multiple times. Certain parts of the process can require additional funds besides the initial capital you need, so you will also need to budget correctly. Finally, you must learn all of Switzerland’s subsidiary laws yourself or hire an advisor who can help you throughout the process.
Alternatively, you can forgo the costs and time requirements of a subsidiary by working with Globalization Partners.
Let Globalization Partners Help With Your Expansion
If you are searching for a viable alternative to establishing a Switzerland subsidiary, contact us today. We will help you start working in Switzerland faster.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
