In Switzerland a minimum paid-up capital of CHF 20.000 is required

Incorporation of an offshore company in Switzerland

Country analysis: legal structures
switzerland, anonymous bank card

Everything you need to know to set up an operating company with a bank account.

1. Exchange of banking information

β€’ There are prison terms for disclosing customer bank details to third parties (and possibly fines).

β€’ Banks are partially subject to strict customer due diligence regulations (old FATF recommendation 5 / new FATF recommendation 10).

β€’ Banks are fully obligated to maintain sufficient records of customer and transaction data for law enforcement (old FATF recommendation 10 / new FATF recommendation 11).

β€’ Banks and / or other covered entities are not required to report large transactions in currency or other monetary instruments to designated authorities.

β€’ The national administration has sufficient powers to obtain and provide bank information on request, but with significant problems.

β€’ There are undue notice and recourse rights against exchanging bank information on demand without major problems.

2. Legal forms

DOING BUSINESS IN SWITZERLAND WITH A LOCAL ENTITY

The Swiss limited liability company (GMbH / SARL)

A Swiss limited liability company can be registered by a single owner and a minimum paid-up capital of CHF 20.000 (approximately US $ 20.000). The company must also appoint at least one resident director, who can be of any nationality but must be habitually resident in Switzerland. Additional directors can live abroad.

The company must submit financial statements every year to the Swiss tax authority. Corporate tax rates vary by province of company registration. No audit of financial statements is required if at least two of the following criteria are met: i) fewer than 250 employees ii) assets below 20 million Swiss francs and iii) turnover below 40 million Swiss francs .

Best Uses for a Swiss Limited Liability Company: A Swiss LLC is the Optimal Vehicle for most commercial uses, including trading with Swiss and overseas clients and local manufacturing / service operations.

The Swiss Stock Company (AG / SARL)

The Swiss limited company can be registered by a single owner, with a minimum issued capital of CHF 100.000, 20% of which must be paid before company registration. The financial statements of the company are always subject to an audit requirement.

Oversight of the business should be exercised by a Board of Directors, which can then appoint directors and managers to oversee the day-to-day operations of the business. However, most smaller JSCs appoint the same person for these functions, which is allowed by law as long as that person lives in Switzerland.

Best Uses for a Swiss Stock Company: A Swiss stock company is the optimal vehicle for making large investments in Switzerland and for business owners seeking additional management and governance oversight. It is also the only type of entity that can be listed on the Swiss stock exchange.

DOING BUSINESS IN SWITZERLAND WITH A FOREIGN ENTITY

The Switzerland branch

The branch of a foreign company is not considered separate from its head office abroad, which consequently is legally liable for all losses incurred by its Swiss branch.

There is no paid-up capital requirement to register a branch in Switzerland.

The foreign company must appoint a local representative, who must reside in Switzerland. Globally, the branch registration process will follow similar steps as a subsidiary.

Best uses for a branch in Switzerland: egistering a branch is advisable only in industries subject to high capital and regulatory requirements (such as the banking sector) or if our Clients expect their clients to feel more comfortable dealing directly with their company, rather from a local subsidiary.

The Swiss representative office

Swiss laws do not differentiate between representative offices and branches. Consequently, the distinction is made by the foreign company, which will not allow its local office to conduct business.

Best uses for a representative office in Switzerland: It is advisable to register a representative office for a first entry into the Swiss market, if productive and commercial operations are not expected.

KEEP ASSETS WITH A LOCAL ENTITY

The Swiss holding company (formerly ancillary and joint ventures)

Important notice: in February 2017, Swiss voters rejected a federal reform that sought to harmonize the different holding company regimes currently existing in Switzerland (holding company, joint venture and subsidiary company regimes). The Swiss government is likely to pass a new law in the coming months to meet the requirements of the European Union and the OECD. However, the content of this law is unknown.

Meanwhile, Swiss companies can benefit from total or total exemption from the income tax of cantonal companies provided that i) the capital investments of the parent company represent more than 66% of its total assets or ii) the income generated for this investment they represent more than 66% of the company's annual income. Dividends received from subsidiaries may also be exempt from federal income tax if the holding company's investment represents i) more than 1 million Swiss francs (US $ 1 million) or ii) more than 10% of the total capital. of the distribution subsidiary.

Companies not eligible as holding companies can apply for i) domiciled status if they do not carry out commercial and productive operations in Switzerland or ii) auxiliary / mixed status if less than 20% of their sales come from Switzerland.

Best Uses for a Swiss Holding Company: A Swiss holding company is an entity excellent for obtaining business financing in Switzerland and for holding all types of assets, including affiliates and intellectual property. However, choosing the canton can be challenging Due to a complex tax code, please contact us for more information.

The Swiss foundation (private and charitable foundations)

A Swiss foundation can be registered with a minimum capitalization of 20.000 Swiss francs, which can take the form of cash or other types of assets. The foundation is run by a Board, with the requirement of having at least one Board member in Switzerland.

In addition, it is possible to apply for charitable status at the Swiss tax office, as long as the foundation is a non-profit organization and finances humanitarian, health, ecological, educational, scientific or cultural activities and projects. Once approved, the foundation is legally tax-exempt in Switzerland.

Although the foundation can be managed by a single member of the board, it is customary to appoint a minimum of three members. According to Swiss law, at least one of them must live in Switzerland.

Best Uses for a Foundation in Switzerland: Registering a foundation is a good way to maintain personal or corporate assets. Switzerland is also one of the best places for registration of a charity, thanks to well-defined laws and good reputation throughout the world

Remember

Se requires a director resident in Switzerland. Fees / Director: € 19.300. Holding companies are available in Switzerland.

OFFICES

Foster Swiss helps our Clients secure offices or we provide an office address. Most emerging markets require our Clients to have a 12-month office lease before company registration is approved.

We help our Clients overcome this challenge in the following ways:

Virtual office service

DDepending on the country and city, the rates range from US $ 900 to US $ 2000 and the annual active virtual office services range from US $ 1500 to US $ 4000).

Shared office space

LThe one-time fee is US $ 850. Thereafter, our Client pays the monthly rent directly to the owner).

Permanent office space

D Depending on the country and the city, the rates range from US $ 5.000 to US $ 8.000).

ACCOUNTING AND TAX

IVA

LThe standard VAT rate in Switzerland is 8%. However, lower rates apply to hotels and lodging services (3,5%) and to basic items such as food, water, etc. (2,5)

A Swiss company must register for VAT if the annual VAT turnover is greater than approximately US $ 99.000 (or CHF 100.000).

Companies must pay customs duties with a standard import VAT of 8% for foreign imports. A reduced rate of 2,5% is applied to certain products, including food, non-alcoholic beverages and pharmaceutical products.

Corporation tax

En Switzerland, corporate taxes are collected at two levels: federal level and cantonal / communal level.

Federal tax is charged at 8.5% on after-tax earnings. At the cantonal level, profits are taxed at rates that vary between 6% and 21%, depending on the individual cantons.

Consequently, the effective corporate tax usually ranges between 12% and 24%.

Non-resident companies are subject to corporation tax on income generated in Switzerland if they i) are partners of a Swiss company ii) have permanent establishments or branches in Switzerland and / or iii) own local ownership.

Swiss holding companies enjoy tax exemptions at the cantonal / communal level and pay a tax of only 7,8%.

Swiss holding companies enjoy tax exemptions at the cantonal / communal level and pay a tax of only 7,8%.

Tax administration

LSwiss resident companies must file annual tax returns no later than March 15 or March 31, depending on the canton. No other monthly or quarterly reports are required.

The Swiss firm must also keep a record of all Swiss GAAP-based accounting records for at least 10 years.

Swiss companies must obtain a full audit if:
β€’ Norwegian is listed on the Oslo Stock Exchange.

Meet at least two of the following three measures in two consecutive years:
β€’ Total assets worth US $ 10,837,760.
β€’ Total billing of US $ 21,675,520.
β€’ Average annual workforce of at least 50.

Swiss companies that do not meet the above criteria get a limited audit. The companies
with fewer than 10 full-time employees can apply to opt out of getting an audit.

Other tax considerations

LResident companies pay taxes on their worldwide income, while non-residents pay taxes on income derived from their operations in Switzerland.

Each canton applies a capital tax between 0,05% and 0,3% of the value of an entity.

A 35% withholding tax is paid on dividends to resident and non-resident companies. However, these fees are reduced, subject to DTA.

Stamp duty of 1% is paid if the paid-up capital stock exceeds US $ 1.083.780.

Currently, Switzerland has signed Double Taxation Agreements (DTA) with 55 countries. Consequently, companies can expect to benefit from paying double taxes on their earned income for DTA countries with Switzerland.

LEGAL AND COMPLIANCE

Company regulation

Toda GmbH and listed AG must publicly disclose to their shareholders.

Antitrust laws prevent Swiss resident companies from entering into contracts that form cartels or monopolies. For mergers and acquisitions matters, approval must be obtained. Switzerland requires that the majority of the members of the board of directors of a Swiss MA be residents or citizens.

A Swiss AG can issue bearer shares only if all of the share capital (US $ 110.000) is fully paid up. A Swiss LLC (GmbH) cannot issue bearer shares.

The Swiss resident company must ensure that an Annual General Meeting (AGM) is held within 6 months after the end of the year.

Companies resident in Switzerland must pay payroll taxes for foreign employees who do not have a permanent residence in the country.

Other considerations

Ehe Federal Data Protection Statute prohibits the disclosure of a person's personal data abroad, if the person's privacy is seriously compromised.

Switzerland is not subject to EU trade guidelines, such as the EU-IAS Regulation, the Accounting Directives, etc.

Switzerland is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Arbitration in other countries that also follow the convention will be enforceable in Switzerland.

COUNTRY PROBLEMS

EThe minimum paid-up share capital for an LLC is CHF20,000, paid before the formation of the company.

The annual government renewal fees for incorporation are € 1.850.

Purchasing employee health insurance is mandatory, which increases labor costs, as Swiss insurance costs are the 3 highest in the world.

A Swiss resident company with more than 10 full-time annual employees must obtain an audit of its financial statements.

The country has one of the highest average wages in Europe. As a result, it is considerably expensive for foreign employers to hire qualified employees in Switzerland.

Only EU citizens can obtain a Swiss Entrepreneur Work Visa for self-employment. For example, a US citizen must have lived and worked in Switzerland for 5 years before they can be self-employed.

Non-EU citizens are granted work visas based on a quota system for their country. Entry will also be based on the worker's qualification.

MORE CONFIGURATION SERVICES SOLUTIONS

  • Shareholders and Agents
  • Office permits
  • Protection of trademarks and copyrights. - Market study.
  • Legal support
  • Proportion of details of temporary unions or associations
  • Fusions and acquisitions.
  • Internal control.
  • Group restructuring.
  • Financial management consulting.
  • Buy a business.
  • Valuation of companies.
  • Credit recovery
  • Job solutions
  • Due diligence search on existing companies and individuals

3. Commercial register

The national registry comprises all the identity information of the legal owner.

Information on legal owners is not always available online (up to 10 EUR / GBP / USD).

4. Transparency of society

All businesses require the registration of all legal owners.

Updating the information on the identity of the legal owners is not mandatory.

5. Shareholders publications

Companies available without registered information on beneficial owners.

Real property is not always available online (up to 10 EUR / GBP / USD).

6. Publication of the company account

It is mandatory to carry accounting data.

It is not always necessary to present the annual accounts to a public authority.

7. Country-by-country financial reports

No country-by-country public reporting at all.

8. Corporate tax return

The secondary mechanism is subject to the restrictions imposed by the OECD model legislation; or no secondary mechanism (only the ultimate national parent entity has to present the CbCR).

Unilateral cross-border tax rulings (eg advance tax rulings, advance tax rulings) are available in laws or regulations, or administrative practice.

9. Identifier of legal entities

β€’ The use of an annually updated Legal Entity Identifier (LEI), developed under the guidance of the Financial Stability Board, FSB, is not mandatory.

β€’ The use of a Legal Entity Identifier (LEI) updated annually, developed under the guidance of the Financial Stability Board, FSB, is mandatory both for trading derivatives (OTC) and for some operators of financial markets and / or classes. of assets. beyond trading OTC derivatives.

β€’ The use of an annually updated LEI for the identification of reporting financial institutions (in accordance with the Common Reporting Standard (CRS) is not mandatory.

10. Measures to avoid tax evasion

Dividend payments: No unilateral relief for double taxation through a tax credit system.

Interest payments: No unilateral relief for double taxation through a tax credit system.

11. Tax matters judicial secrecy

None or restricted access to both criminal and civil tax procedures.

None or restricted access to both criminal and civil tax judgments / verdicts.

12. Opaque structures

β€’ The jurisdiction issues or accepts the circulation of large notes / cash notes of its own currency (of a value greater than 200 EUR / GBP / USD).

β€’ Unregistered bearer shares are available / outstanding or registered by a private custodian.

β€’ Series LLC / Shielded Cell Companies are not available.

β€’ Trusts with escape clauses are not prohibited.

13. Anti-money laundering legislation

Switzerland is not on the FATF list of countries that have been identified with strategic AML deficiencies.

The last Mutual Follow-up Evaluation Report related to the implementation of anti-money laundering and terrorist financing regulations in Switzerland was carried out in 2019. According to that Evaluation, Switzerland was considered Compliant in 8 and Largely Compliant in 27 of the 40 FATF Recommendations. It was also considered Highly Effective for 0 and Substantially Effective for 7 with respect to the 11 areas of Effectiveness of its AML / CFT Regime.

Overall Non-Compliance Score of FATF Standards in Percentage: 37,9%. (100% = all indicators rated as not met / low level of effectiveness; 0% = all indicators rated as completed or highly effective).

14. Automatic exchange of information

You signed the MCAA and committed to sharing information on or before 2019.

Number of significant activated AEOI relationships (under the MCAA) published by the OECD as of October 2019: 89.

What type of private banking exists in Switzerland?

International Banking
Local banking

Central bank security ⭐⭐⭐

The international and digital banks They're available.

CRS: YES

Real bank operations: 90%.

Visa type: CHF Fr, €, $.

Joint accounts.

Remote management account: To consult.

Asset management Depending on the rating of the company.

Rates: It depends on the type of account.

Credit / debit cards in local currency

Why with Foster Swiss?

Foster Swiss is an international company registered in Switzerland aimed at providing financial and compliance advice on a variety of topics related to company formation
and commercial banking internationally. We are specialized in the implementation of businesses in different jurisdictions, which means that we offer value-added services helping our clients in their expansion abroad.

Some of these services include:
Advice and consultancy,
visas, offices, nominated director / shareholder / secretary,
accommodation if necessary… to name a few.
Check with your assigned consultant for more information.

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