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| Hi, I set up as an independent (sole trader) in Geneva a couple of months ago. I was dreading going there but, just like Aussiegirl said, it was very straightforward- just one form, the woman made a phone call to some federal office in Bern, gave me a bill for 190chf and a few sheets of information and that was it. I visited a website that she told me about a few days later and could print the company documents directly from there, official copies were optional for a small charge.
One thing I was told and no-one else here has mentioned is that you will receive a ridiculous amount of mail with bills, offers, association memberships etc. NONE OF THIS IS MANDATORY!! and I think the best place for most of it would be the paper recycling bin.
I have, however, now received a reminder from SUVA which I think is a declaration of how much I think I will make in a year so I can pay AVS and other stoppages. Any info on this would be most welcome if anyone out there knows, it's high on my to-do list and looks pretty official.
Just for info I'm a Brit with a C permit but the process should be the same as long as you have a valid permit.
Also, if you want to register a SARL (Ltd company) there is the small matter of putting aside 20,000chf which is some kind of deposit in case you go bankrupt. For an SA I think the figure was 100K! As a sole trader I am the company and we are one as far as the law is concerned- if it owes someone money then so do I, that is something that should be understood if you register as a sole trader.
Good luck if you decide to start something up yourself and don't be scared, everybody has been surprisingly helpful for me. | |
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Well, on self-employed vs. Ltd or corporation:
- To become self-employed,
it is not mandatory to be registered at the Swiss commercial register! For some business, it is also not possible. Being self-employed is a matter of facts, organization, how you appear towards clients and independance. Those criteria will be checked by the AVS authority. Being registered at the Swiss commercial register has a
very significant impact on proceedings and bankruptcy. If you are not registered, you are subject to the ordinary legal proceeding procedure, which basically imply a long and difficult process for the claimant. Whereas if you are registered, you fall into the bankruptcy procedure, which means the process will be very much simplified and straight forward for the claimant to seize your goods and obtain payments.
- Creating a company (Sàrl or SA) means creating a separate legal entity, with own assets and capital. This means the
end of transparency between shareholder and the corporate entity. Which means that if the corporate entity goes bankrupt, the shareholder will not have to pay anything in addition than the initial paid-in capital. This is clearly a
security compared to the self-employed activity for which you will be responsible and liable
on all your goods and assets!
- The downside on creating a separate corporate entity, is that it is not transparent at all! This means dual legal and tax obligations (for the individual and for the corporate entity). This means that what is paid in the name of the individual can not be "transferred" to the corporate entity (or with significant restrictions). This non transparency is not flexible at all and for non experienced people, it can lead to significant issues. Being self employed means that what you earn through your business is for you and can go directly in your pocket. Being employed by its own company means having a salary (maybe subject to tax at source if you have a B permit!!!), paying 2nd pillar, accident insurance, different 1st pillar rates for employer (corporate entity) and individual, issuing a salary certificate which have to mention also the amount of expenses paid back to the employee and other benefits, such as company car, etc. This means also that the profits realized by the company are in the pocket of the company and are subject to profit tax. Once distributed, they are subject to withholding tax (wich can be claimed back by the individual). The dividend is then taxable in the hands of the shareholder, as income, together with his salary. Furthermore, the net assets of the company (share capital plus retained earnings) are subject to a capital tax... If you start denying the non transparency by having the corporate entity assuming private expenses of the individual, you will fall into tax fraud procedure! Wrong accounting that leads to a tax evasion is a tax fraud! It's penal, with fine, taxes and interest for late payments! Withholding tax is also due, which can not be claimed back as you did not declare the income!!! Well, I'm "painting the Devil on the wall" as I would say in French, but all this to say that you can't say "create a Sàrl or SA, it's easier".
In my practice, I recommand a Sàrl or SA as soon as:
- you want to remain anonymous
- you trade goods outside Switzerland
- you need bank financing
- you will or intend to hire people
- you intend to integrate a partner
- you will potentialy face high risks of responsibility
- etc.
Whereas if you want to have a small business you run and it is you and you and you don't face special risks, go for self-employment. Also dont' forget: going self-employed is basically free of charge, whereas creating a GmbH implies at least costs of CHF 2'000-3'000....
There is a lot of potential planning by creating a separate legal entity (2nd pillar, tax planning...) and this is a powerful tool. Nevertheless, it has some administrative and legal constraints and implies costs you don't face being self-employed. This needs an analysis of each individual case and no general answer can be given at anytime, but this might give some guidelines.