Switzerland / Zug: Company Formation

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    Company Formation in Switzerland- 5 steps
    quick incorporation, easy registration without travel:

    1. First you will send us an agreement to register your company and some documents, then we will contact you to clarify the basic information. In addition, our manager will meet or phone with you to ensure correct and complete information.
    2. We prepare all documents (for non – residents this includes a power of attorney from the shareholders) while you send us a little deposit. Then we e-mail the documents to you ready to check and sign. On demand the documents can be created in form of a table, with an official German version and an English translation aside of it.
    3. You just need to sign the documents and send the original, some papers must be signed notarized with apostille (requirement for proof).
    4. In the meantime the shareholder(s) will open a blocked capital deposit account at a Swiss bank, as required by art. 663 OR  (Swiss code of obligations) and art. 777c OR (if needed, we can establish a contact), pay the capital to this account (exactly from the private account) and instruct the bank to send us a receipt.
    • Minimum paid in capital is 50.000 CHF for a Swiss AG (French and Italian: SA) and 20.000 CHF for a Swiss GmbH – (French SARL and Italian SAGL, which means Limited Liability Company – LLC).
    • If 3 banks do not accept the shareholder as a customer, create a company with capital in kind or buy an existing one, a so called shelf company or ready-made company. However, not every company can be used, because laws prohibit the commercial register to register changes of shareholders of sleeping GmbH companies (with only financial assets). If such a company is sold, the old director shall better start again activities and eventually expand the object before his resignation and other changes happen, so an interim income statement with solid revenue can be presented.

    5. As soon as we receive your documents and the receipt from the bank, we sign on your behalf at the notary the statutes (articles of association)             and memorandum of association and submit the application documents (list of documents below). So legally, you are the incorporator.
    Within usually two weeks the commercial register of the Canton Zug will register the company.

    Company formation or takeover of a company is offered only together with other services (accounting etc.), because this way we know the activities of our clients. If we also assist the company to apply for a bank account, please be aware that banks do their own due diligence, so we have little influence on their decision.The notary submits one set to the commercial register and gives us a second set.

    Within usually two weeks the commercial register of the Canton Zug will register the company and send us an original extract.

    • After formation, several steps have to be done:
        • You have already approached banks to open a company account. We send the original extract and the second set of the notarized documents to the bank of your choice.
        • setup of accounting infrastructure, questionnaires from authorities, VAT application, logo and stationary, stamp, website (recommended)

    7 steps to save structure costs, so your Swiss company pays off:

    1. Appoint foreign board members who have their residence outside Switzerland. According to art. 718 and art. 814 Swiss Code of Obligations, you need at least one Swiss resident with signature rights, but a person without formal responsibility demands less fees. To avoid misuse, you can appoint two residents with joint signatory rights. Foreign board members need no special permit. It is not mandatory that they receive a compensation or salary.
    2. Avoid professional fiduciary relationships: do not pay for compliance, but for services that create benefits for you.
    3. Make sure there is an active business: with active business, the company does not qualify as “domicile company” and the board can avoid additional anti money laundering bureaucracy.
    4. Make sure relevant double tax treaties are applicable: this requires regular presence and major decisions in Switzerland (or maybe in countries with lower tax and costs).
    5. Have at least two bank accounts in different countries: banks are suppliers of relevant infrastructure; a second account reduces dependencies and increases flexibility. Check our guideline how to deal with banks and you will have more success in opening a bank account.
    6. Do not submit bills with small amounts to the bookkeeping: with low Swiss tax rates, it is cheaper to pay tax than to pay high bookkeeping costs.
    7. Make a foreign holding: organize an exit for your profits to a holding in a country with zero withholding tax or create a foreign company with Swiss branch.

    Company Formation in Switzerland – benefits:

    • Swiss image and Swiss quality
    • legal opportunities, e.g. special regulation for ICO and crypto/ blockchain companies
    • local customers require presence
    • Reasonable taxation, especially in the Canton Zug, and many double tax treaties
    • Stable political environment, friendly and predictable public administration
    • Secrecy of information (e.g. the share register of an AG is kept at the domicile, it is not submitted to the commercial register)
    • Audit can be waived according to art. 727 Swiss Code of Obligations, if the company does not exceed two of the following thresholds in two successive financial years: balance sheet total of 20 Mio CHF, sales revenue of 40 Mio CHF, 10 full-time positions on annual average;
    • Consolidation of accounts is not required according to art. 963a Swiss Code of Obligations, if the company together with the controlled undertakings(s) does not exceed two of the following thresholds in two successive financial years: balance sheet total of 20 Mio CHF, sales revenue of 40 Mio CHF, 250 full-time positions on annual average]

    Legal Forms and Types for Swiss Companies:

    Most common form of companies:

    • Gesellschaft mit beschränkter Haftung (GmbH) – Limited Liability Company – shareholders are registered publicly
    • Aktiengesellschaft (AG) – Joint Stock Company –share register held at the domicile
    • Zweigniederlassung – Branch of a foreign entity

    Additional options:

    • Kommanditgesellchaft (KG) – Limited Partnership
    • Kollektivgesellschaft – General Partnership
    • Einfache Gesellschaft – partnership without registration
    • Einzelunternehmen, Einzelfirma – Sole Enterprise, Sole Trader
    • Genossenschaft – Registered Cooperative
    • Verein – Association

    For further information: Company Structures

    Zugimpex: Professional Services:

    • At Zugimpex, clients receive comprehensive services in Switzerland from one source for their company. Based on the requirements, we recommend the best types of structures
    • There are some legal requirements to perform Customer Due Diligence, but with our support this goes quick– for us it is important that you have good financial standing, good qualification and successful experience in your business. (Please note: Zugimpex does not provide services to US citizens and to US residents. In case of companies with domicile or in case of persons with residency in Germany, Italy or France, activities have to be coordinated with a local tax expert!!!)
    • Fair calculation:
      • Company formation Switzerland- costs/prices: Calculate formation costs plus notary and public fees. If required, you also need to include fees for a Swiss resident person.

      • Annual costs depending on the activities: domicile, flexi desk and basic post service, bookkeeping/accounting, VAT declaration per quarter or per month, annual financial statement and tax declaration. We work after prepayment and our services are charged per time, so customers who work efficient have lower costs.

    • Payroll services:
      • We assist you in planning the requirements and inform about the special Swiss employment conditions
      • A preselection and scheduling of video interviews can be offered. If required, we can organize background checks, too.
      • After your decision, we provide all necessary registrations for your employees
      • We administrate monitoring of actual working time, ongoing payroll and social charges, so you need just to transfer the amounts.
      • From the very beginning, we provide you with a guideline and the necessary sample texts how to terminate an employment correctly, so you have everything ready in case it is required.
    • Professional consulting:
      • Our company is proud to offer customers quick responses to inquiries- even in the evening and at the weekend. You find this not everywhere in Switzerland.
      • Use our experience at Zugimpex, our contacts and our know how as consultants in international business and in international tax planning.
      • We are able to review your international business contracts and check if it is possible to enforce them internationally. In addition, differences in national law (e.g. continental law, common law or France/Italy/Spain) can be considered- they can work for your disadvantage, but also for your advantage.
      • If required, our sister company can act as escrow agent or take over fiduciary tasks.
      • We can assist to apply for tax benefit in the area of Research and Development, and in the registration of trademarks, designs  and patents.
      • If you plan with us your setup, your operations and the transfer of functions, your corporation in Switzerland will open and operate successfully.

    Sometimes it is reasonable to ask for a Second Opinion:

    Although many lawyers, tax advisors and corporate service providers in Switzerland have good knowledge and work honestly, there are situations where it is useful to ask for a second opinion. Here are some examples:

    1. Your service provider charges high costs – higher than expected, especially as fiduciary
    2. Your service provider has rarely time or he answers your questions late, general or never
    3. You have the impression that your fiduciary does not fully act in your interest
    4. Your service provider permanently tries to frighten you without offering economically reasonable solutions
    5. You think about changing the canton
    6. Your company structure does not take into account a tax free exit – your money is stuck in the company
    7. You have the impression that there may be other solutions to some topics

    Option: Swiss branch (e.g. of a Slovak company)–
    works like a Swiss company with additional benefits:

    1. A Swiss branch of a foreign company works like a Swiss company and the branch can act as a holding as well. The manager of the main seat can run the branch, if a Swiss resident person with signature rights is appointed.
    2. A branch is part of the same legal entity. Therefore, the transfer of funds from the branch to the main seat is no dividend and there is no withholding tax on dividends and interests.
    3. Later, you can transfer money almost tax free from corporate to private level using the right foreign structure. There is no need to change your private residence.
    4. Minimum capital for a foreign entity is low, the branch does not need any initial capital.
    5. You avoid the challenging task to open a blocked capital deposit account for the initial capital. Foreign banks treat you friendly and act quickly if you want to open a bank account.
    6. Some foreign law has less bureaucratic regulations with regards to nominees.
    7. All steps can be done with power of attorney.

    Additional information: List of Documents to register a Swiss Company:

    1. Power of attorney (notarized, apostille) to sign your documents at the Swiss notary.
    2. Sample signature of each board member (notarized)
    3. Copy of the Articles of Association which we will sign later at the notary for you
    4. Copy of the Memorandum of Association, the deed that we will sign later at the notary for you
    5. Appointment and Contract with one or two Swiss resident(s) with signature rights
    6. Contract regarding domicile and flexi desk or rental contract for an office
    7. Contract with Zugimpex and power of authority to represent to authorities
    8. Declaration Stampa / Lex Friedrich (regarding real estate purchase)
    9. Declaration to waive the obligation for independent annual audit
    10. Customer Due Diligence Form – Identification and Know your customer
    11. Application to the commercial register
    12. Passport or ID copy of every founder and board member
    13. If the founder is a corporate body: company documents (extract from commercial register and articles of association, both notarized with apostille) and declaration of the board to register a subsidiary

    Residence and Working in Switzerland

    Switzerland know several forms of residence permit:

    • L permit (3 – 12 months), usually granted to non EU/EEA citizens or
    • B permit (5 years)
    • C permit (permanent, after 5 years)

    Because of the agreement of free movement, EU citizens can apply for the B permit if they are employed in a company. For self-employed or employed in their own company, there is additional bureaucracy.

    For citizens outside EU and for citizens of Croatia, there is a limit of residence permits issued every year. Priority is given to highly qualified persons, and the employer has to submit a request. After recommendation of the cantonal authorities, there is a final decision by the federal authorities.

    The Swiss Federal Act on Acquisition of Real Estate by Persons Abroad Lex Koller restricts the acquisition of Swiss residential and other non-commercial real estate by foreigners to purchase residential apartments, except for own purposes in case of a C permit.  In addition, there are detailed rules to avoid circumvention, in particular with legal persons.

    Because of the Cross Border Service provision (Posted Workers Act), it is possible for every employee of EU companies or for EU self-employed persons, to work more than 8 days and up to 90 days annually in Switzerland by submitting an online notification at least 8 days in advance. Swiss work conditions must be met, and for some industries, this is restricted (construction, security, hotel and catering etc.).

    (updated April 2020)