TL;DR

  • Switzerland attracted 111 foreign investment projects in 2024, a 24.7% increase year-over-year
  • GmbH requires CHF 20,000 minimum capital (fully paid); AG requires CHF 100,000 (CHF 50,000 paid-in)
  • Corporate income tax ranges from 11.85% (Zug) to 20.54% (Bern), depending on the canton
  • VAT standard rate: 8.1%; reduced rates at 2.6% and 3.8% for specific goods/services
  • Non-EU nationals face strict work permit quotas: 4,000 L permits and 4,500 B permits annually
  • At least one director must be a Swiss resident with sole or joint signing authority
  • 26 cantons operate independent tax systems, creating location-based optimization opportunities

Switzerland maintains its position as one of Europe’s most stable business destinations, combining political neutrality, institutional sophistication, and strategic location. For foreign businesses, the country recorded 111 new investment projects in 2024, a 24.7% increase from the previous year, while European investments declined by 5% overall.

To start a business in Switzerland, entrepreneurs must address cantonal incorporation requirements, federal tax obligations, and work permit restrictions. The country operates under a three-tier tax structure (federal, cantonal, communal) with corporate rates varying from 11.85% to 20.54% depending on location.

This guide provides foreign founders with a structured roadmap for establishing Swiss operations. It covers entity structures, capital requirements, immigration pathways, multi-jurisdictional tax compliance, and operational obligations across Switzerland’s 26 cantons.

Why Foreign Entrepreneurs Choose Switzerland

Switzerland delivered 930k CHF million in foreign direct investment in 2023, driven by economic stability, R&D infrastructure, and direct access to European markets through bilateral agreements with the EU. The country sits at the geographic center of Europe, providing distribution access to Germany, France, Italy, and Austria within a four-hour radius.

U.S. companies led foreign investment in 2024, accounting for 27 projects and 131 new jobs, a 69% increase from 2023. Germany followed with 14 projects, France with 10, and Italy with 9. This investment concentration reflects Switzerland’s appeal to technology, financial services, and life sciences sectors.

Switzerland operates under a federal structure with 26 cantons, each maintaining an independent tax system:

  • Zug: Corporate tax rate of 11.85%, lowest in Switzerland; popular for fintech and trading companies
  • Geneva: International headquarters hub; corporate tax rate approximately 14.70%
  • Basel: Pharmaceutical and life sciences cluster; corporate tax rate approximately 13.45%

Understanding Market Entry Strategy in Switzerland

Market entry in Switzerland demands cantonal analysis before entity formation. Each of Switzerland’s 26 cantons operates independent tax rates, business incentives, and administrative procedures. Location decisions directly impact effective tax rates, talent availability, and operational costs.

Switzerland’s business environment centers on four key economic regions:

  • German-speaking region (Zurich, Zug, Basel): Financial services, pharmaceutical manufacturing, technology; German language required
  • French-speaking region (Geneva, Vaud, Neuchâtel): International organizations, commodities trading; French language required
  • Italian-speaking region (Ticino): Cross-border services, logistics; Italian language required
  • Romansh-speaking region (Graubünden): Limited commercial activity

Minimum Capital and Investment Options for Foreigners

Switzerland requires minimum capital for limited liability structures, with different thresholds depending on entity type.

Private Limited Liability Company (GmbH):

  • Minimum capital: CHF 20,000
  • Must be fully paid-in at incorporation
  • Suitable for small and medium-sized enterprises
  • Shares are not freely transferable; they require shareholder approval

Public Limited Company (AG):

  • Minimum capital: CHF 100,000
  • Minimum CHF 50,000 must be paid at incorporation
  • Suitable for larger enterprises planning to raise capital
  • Shares are freely transferable unless restricted in the articles of association

Switzerland does not maintain investment screening mechanisms. Foreign acquisitions do not require government approval regardless of sector or transaction size.

Choosing the Right Business Structure

Swiss company law recognizes several entity types, each carrying distinct capital requirements and tax treatment. Foreign businesses typically select between GmbH and AG structures.

GmbH (Private Limited Liability Company):

  • Minimum capital: CHF 20,000 (fully paid-in)
  • One or more shareholders
  • Shareholders’ names are publicly disclosed in the commercial register
  • Limited liability protection
  • Shares are not freely transferable

AG (Public Limited Company):

  • Minimum capital: CHF 100,000 (minimum CHF 50,000 paid-in)
  • Shareholders can remain anonymous
  • Freely transferable shares
  • Requires at least one director (three if more than two shareholders)
  • Suitable for businesses planning to raise capital

Branch Office:

  • No separate share capital required
  • Foreign parent company remains fully liable
  • Subject to Swiss corporate income tax on Swiss-sourced income only
  • Requires a permanent Swiss representative

For detailed legal registration procedures, entity formation steps, and documentation requirements, see our guide on [How to Register a Business in Switzerland].

Legal, Residency, and Immigration Requirements

Switzerland’s corporate framework is open to foreign ownership, but company formation and hiring involve specific residency, representation, and immigration rules. The following requirements outline the obligations foreign founders must meet when appointing directors, employing non-EU talent, and operating in regulated sectors.

Resident Representation Requirement

Both AG and GmbH structures must appoint at least one individual domiciled in Switzerland who has legal authority to represent the company. This may be a person with sole signing authority or a joint signatory structure, depending on the company’s internal rules.

Work-Permit Quotas for Non-EU/EFTA Nationals

Switzerland applies annual federal quotas for non-EU/EFTA nationals:

  • 4,000 L permits (short-term, up to one year)
  • 4,500 B permits (long-term, over one year)

Work-Permit Quotas for UK Nationals

Following post-Brexit arrangements, Switzerland operates separate quotas for UK citizens:

  • 1,400 L permits
  • 2,100 B permits: These quotas are released quarterly, and utilisation remained low through late 2024.

Sector-Specific Limitations

Switzerland has no general foreign investment screening law, and full foreign ownership is allowed in most industries. However, certain fields, such as real estate under Lex Koller, banking, and telecommunications, may require special approvals or fall under separate regulatory rules.

Permit Requirements (Non-EU/EFTA Nationals)

Core criteria applied by cantonal and federal authorities include:

  • a confirmed employment offer from a Swiss employer,
  • evidence that no suitable Swiss or EU/EFTA professional is available,
  • salary aligned with Swiss market levels,
  • qualifications appropriate to the role.

Processing times vary widely by canton and case.

EU/EFTA Nationals

Citizens of EU and EFTA member states benefit from free movement. They do not require a work permit for stays of up to 90 days. For longer stays or ongoing employment, they must register locally and obtain a residence permit.

Foreign Investment Restrictions and Business Incentives

Switzerland maintains an open investment policy without sector-specific restrictions or screening mechanisms. Foreign investors can acquire Swiss companies at any ownership percentage without government approval. The tax incentives are as follows:

Federal Level:

  • Patent Box: Up to 90% deduction on qualifying intellectual property income
  • R&D Super-Deduction: Up to 150% deduction for qualifying research expenses
  • Capital contribution principle: Tax-free return of capital to shareholders

Cantonal Level:

  • Several cantons provide tax holidays for new companies, creating significant employment
  • Regional development zones offer reduced tax rates for up to 10 years
  • Cantons provide grants for job creation and training programs

Switzerland implemented the OECD global minimum tax of 15% effective January 1, 2024, through a constitutional amendment. Low-tax cantons have begun adjusting rates upward toward the 15% threshold.

Opening a Bank Account and Managing Cross-Border Payments

Swiss company bank accounts are mandatory for depositing share capital and conducting business operations. Banks apply enhanced due diligence for foreign-owned companies under anti-money laundering regulations.

Documentation Requirements:

  • Notarized articles of association and incorporation deed
  • Commercial register extract
  • Identification documents for all directors and ultimate beneficial owners
  • Business plan describing operations
  • Proof of registered office address
  • Evidence of the source of funds
  • Professional references

Swiss banks typically require in-person meetings for foreign-owned company accounts. Account opening takes 2-4 weeks after submission of complete documentation.

For AG structures, founders must deposit a minimum capital (CHF 50,000) in a blocked account before notarization. The bank issues a capital certificate required for commercial register filing. For GmbH structures, the full CHF 20,000 must be deposited before incorporation.

Taxation and Compliance for Foreign-Owned Businesses

Swiss corporate taxation operates across three levels: federal, cantonal, and communal. Companies face different effective tax rates depending on their registered office location.

Corporate Income Tax:

Switzerland levies federal corporate income tax at approximately 7.8%. Each canton adds its own corporate income tax, creating combined effective rates ranging from 11.85% to 20.54%:

  • Zug: 11.85%
  • Basel-Landschaft: 13.45%
  • Geneva: approximately 14%
  • Zurich: 19.61%
  • Bern: 20.54%

Companies are tax-resident if their registered office, place of effective management, or administrative center is located in Switzerland.

Value Added Tax (VAT):

Switzerland applies three VAT rates:

  • 8.1% standard rate (most goods and services)
  • 2.6% reduced rate (food, books, medicines)
  • 3.8% special rate (accommodation services)
  • 0% rate (exports, international transport)

Businesses with an annual turnover exceeding CHF 100,000 must register for VAT. Foreign companies making taxable supplies in Switzerland must register immediately, regardless of turnover.

VAT Filing Requirements:

  • Quarterly filing: Standard for most businesses
  • Monthly filing: Optional for businesses regularly in a VAT credit position
  • Annual filing: Available starting January 2025 for businesses with consistent compliance

Returns must be filed electronically within 60 days after the reporting period.

Platform Taxation:

Effective January 1, 2025, Switzerland introduced deemed supplier rules for online platforms facilitating goods sales. Platform operators become liable for VAT on sales to Swiss customers.

Withholding Taxes:

Switzerland applies 35% withholding tax on dividends, interest, and royalties. Rates may be reduced under double taxation treaties (Switzerland maintains treaties with over 100 countries).

Hiring Employees and Payroll Compliance

Swiss employment law operates under the Swiss Code of Obligations, combined with collective labor agreements. Employers must understand contract requirements and social security obligations.

Employment Contracts: Contracts must be in writing and include position description, gross salary, working hours, vacation entitlement (minimum 20 days per year), notice periods, and probation period (maximum three months). Contracts must be drafted in the language of the canton.

Minimum Wage: Switzerland has no federal minimum wage. Certain cantons have minimum wages ranging from CHF 19 to CHF 23 per hour. Geneva, Neuchâtel, Jura, and Ticino maintain cantonal minimums.

Working Hours:

  • Standard working week: 45 hours (office workers) or 50 hours (industrial workers)
  • Overtime compensation: 125% of the regular hourly rate
  • Maximum daily working time: 14 hours, including overtime

Payroll Processing: Employers must register with cantonal compensation offices for social security, join occupational pension funds, obtain accident insurance, and withhold income tax at source for foreign workers.

Notice Periods:

  • During probation: 7 days
  • First year: 1 month notice
  • Second through ninth year: 2 months’ notice
  • After 10 years: 3 months’ notice

Setting Up Operations and Staying Compliant

Post-incorporation, Swiss companies must complete administrative registrations across federal and cantonal authorities.

Key Registrations:

  • Commercial register: Register articles of association, directors, authorized signatories, and registered office
  • VAT registration: Companies exceeding CHF 100,000 turnover must register with the Federal Tax Administration
  • Social security: Employers register with the cantonal compensation offices
  • Occupational pension: Join the pension fund within 30 days of hiring the first employee

Accounting Requirements:

Swiss companies must maintain accounting records complying with the Swiss Code of Obligations:

  • Annual financial statements (balance sheet, income statement)
  • Notes to financial statements
  • Management report (for larger companies)
  • Retention of accounting records for 10 years

Most companies engage Swiss fiduciaries (accounting firms) rather than managing accounts internally. Fiduciary costs typically range from CHF 200-800 monthly for small businesses.

Maintaining Your Business in Good Standing

Swiss companies face ongoing compliance obligations across federal and cantonal jurisdictions.

Critical Filing Deadlines:

  • Annual financial statements: Within six months of the fiscal year-end
  • Corporate income tax returns: 3-9 months after fiscal year-end (varies by canton)
  • VAT returns: Within 60 days after quarter-end
  • Social security declarations: Quarterly submissions required

Penalties:

  • Late VAT filing: CHF 100-300 per late return
  • Interest on unpaid VAT: 4% annually
  • Late commercial register updates trigger penalties

Finding Local Partners, Accelerators, and Support Networks

Switzerland maintains a robust support infrastructure for foreign businesses.

Chambers of Commerce:

  • Swiss-American Chamber of Commerce
  • British-Swiss Chamber of Commerce
  • Cantonal chambers provide local networking

Innovation Support:

  • Switzerland Innovation Park
  • Kickstart Innovation
  • Innosuisse (Swiss Innovation Agency)
  • Venturelab

Investment Promotion:

  • Switzerland Global Enterprise
  • Greater Zurich Area
  • Geneva Economic Development Office
  • BaselArea

How to Close or Sell Your Business in Switzerland

Business exit in Switzerland follows structured dissolution or M&A processes.

Voluntary Dissolution:

Companies dissolve through shareholder resolution followed by liquidation. The process requires shareholders to vote to dissolve, appoint a liquidator, notify the commercial register, publish dissolution in the Swiss Official Gazette, complete a three-month creditor claim period, settle obligations, file final tax returns, distribute assets, and file a deletion request. Liquidation typically requires 4-8 months.

Tax Obligations:

  • Final corporate income tax return
  • VAT deregistration and final return
  • Liquidation proceeds taxed as dividends (35% withholding tax)
  • Capital gains on asset disposals are subject to standard rates

Switzerland’s participation exemption provides favorable treatment for share sales when the seller holds at least 10% of the company for one year or more.

Challenges Foreigners Commonly Face

Foreign founders entering Switzerland encounter several practical hurdles beyond incorporation formalities. The following are the most common operational challenges that impact setup timelines and day-to-day compliance.

  • Banking Access: Swiss banks apply strict due diligence for foreign-owned companies, requiring in-person meetings and extensive documentation.
  • Work Permit Quotas: Switzerland’s quota system creates uncertainty for non-EU talent. Quotas typically fill before year-end.
  • Cantonal Complexity: Each canton maintains independent tax systems and administrative procedures.
  • Language Requirements: Switzerland’s four-language system complicates contracts and filings.

Why Choose a Cross-Border Platform Instead of Local Agents

Traditional approaches to Swiss market entry involve engaging separate local advisors for incorporation, tax compliance, accounting, and legal matters. This fragmented model creates coordination overhead and compliance gaps when operating across multiple jurisdictions.

Local agents specialize in domestic requirements but lack visibility into cross-border obligations. Swiss fiduciaries handle local corporate tax but may not track EU VAT or U.S. Sales Tax obligations. Corporate service providers manage incorporation but don’t monitor ongoing compliance deadlines across jurisdictions.

For businesses operating internationally, this fragmentation multiplies. Cross-border platforms consolidate these functions into unified workflows, providing integrated compliance management that tracks obligations across all active jurisdictions simultaneously.

How Commenda Helps You Start and Scale Globally

Commenda is an AI-powered global business console that helps entrepreneurs and CFOs manage incorporation, U.S. Sales Tax, EU VAT, and cross-border compliance through one platform.

  • Unified Incorporation Management: Commenda coordinates Swiss entity formation alongside registrations in 30+ other jurisdictions. Instead of engaging separate local agents in each country, businesses initiate incorporations through a single interface that tracks documentation requirements and regulatory approvals.
  • Multi-Jurisdictional Tax Compliance: Commenda monitors VAT registration thresholds across EU member states, tracks U.S. Sales Tax nexus in all states, and manages Swiss cantonal tax obligations. When Swiss VAT returns are due, the platform generates filing data and submits declarations electronically.
  • Cross-Border Compliance Tracking: Switzerland requires parallel filings with federal tax authorities, cantonal commercial registers, and social security offices, each operating on different schedules. Commenda consolidates these obligations into a unified compliance calendar with deadline alerts.
  • Cantonal Optimization: For businesses evaluating Swiss location decisions, Commenda provides a comparative analysis of effective tax rates and regulatory requirements across cantons.
  • Global Operations Dashboard: Commenda provides centralized visibility into compliance status across multiple countries. Instead of monitoring separate portals for Swiss VAT, U.S. Sales Tax, and other jurisdictions, founders access consolidated reporting that identifies risks and prioritizes actions.

Start your business in Switzerland and scale globally with Commenda, your single platform for incorporation, tax, and compliance across 30+ jurisdictions. Book a free demo today.

FAQs

Q. Can foreigners own 100% of a company in Switzerland?

Yes. Foreigners can fully own Swiss companies. However, at least one director with signing authority must be a Swiss resident.

Q. What are the visa or residency requirements to start a business?

Non-EU nationals must apply through Switzerland’s quota-based work permit system (L and B permits). Approval requires proof of employment need, adequate salary, and qualifications. Processing typically takes 4–12 weeks.

Q. What’s the minimum capital needed to start a business in Switzerland?

A GmbH requires CHF 20,000 fully paid in. An AG requires CHF 100,000, with at least CHF 50,000 paid at incorporation.

Q. How are foreign-owned companies taxed in Switzerland?

Federal corporate tax is about 7.8%. Combined cantonal and communal rates range from roughly 11.85% (Zug) to around 20% (Bern). VAT is 8.1%, and employer social security contributions are about 6–9%.

Q. What incentives are available for foreign investors?

Incentives include the Patent Box (up to 90% IP relief), R&D super-deductions (up to 150%), and cantonal tax holidays for job-creating investments.

Q. How can I open a bank account as a non-resident?

Banks typically require incorporation documents, ID for all directors/UBOs, a business plan, proof of address, and source-of-funds evidence. In-person verification is common, and opening takes 2–4 weeks.

Q. What are the ongoing compliance obligations for foreign businesses?

Companies must file annual financial statements within six months of year-end, file corporate tax returns within 3–9 months (depending on the canton), submit VAT quarterly (within 60 days), and update the commercial register within 10–30 days of changes.

Q. How does Commenda simplify cross-border incorporation and tax compliance?

Commenda unifies Swiss incorporation, global VAT, U.S. Sales Tax, and compliance tracking, automating filings and deadlines across all active jurisdictions from a single dashboard.