Yes this is right. And do not forget the returnining annual costs for a GmbH, i.e. reporting, audit, annual GAM, etc. All of these you can avoid being just self employed.
What you need in this case is the mentioned above registration with the AHV, regular book-keeping and annual tax declarations. And Good luck!

VAT: Would your annual turnover exceed CHF 75'000? If so you must register for VAT and charge your customers VAT.

Small businesses can opt-out from the audit.

And the AGM consists of you and you agreeing that you will do whatever you wanted to do.

Can't he declare his on your form?

Married couples always file a joint tax declaration. So it is not his form or her form. It is their form.

Thanks to everyone who has left such helpful information on this thread.

I was wondering if anyone has an opinion on this situation: I have a regular job, for which I have a (non-EU) B-permit. I would like to provide some external "consultant" (hate that word) services to a different company at the same time. Is it possible to be a freelancer/self employed as described on this thread and at the same time have an employment contract with another company? And if so, is this a better structure for this set-up than forming a GmbH which would have a service contract with that company?

The contract would be steady every month (as opposed to one-off or fluctating).

Thanks in advance to anyone who has an opinon on this.

I don't know for sure, but I would guess that it is OK if you declare the income on your annual tax statement (pretty much all you seem to have to do to freelance) and as long as your current work contract doesn't forbid you working for other companies at the same time - I know this is common in many larger companies.

Personally, I favor forming a GmbH. But may not be worthwhile for minor earnings.

Otherwise, you must register with the AHV as self-employed.

You need your major employer's permission.

Miller,

If you already have a B-permit which is based on your employment (versus self-employment status), yes, i believe you can provide consulting services on the side and add this income to your overall tax return at the end.

Best in my eyes would be to form a GmbH somewhere in Zug and contract yourself out of there, even to your current employer, if possible. This structure has very many benefits for any future possible contract in and even out of Switzerland (especially if you run projects).

If a self-employed status is chosen, though, there would be some tests on the way (3 unrelated clients in SUI, by the way, this test doesn't really apply if you have only one client but from outside of Suisse - Swiss give you green light to bring money from outside). Still a self-employed pays off in terms of red tape and the latest and greatest i've come across is that you don't even have to have your Einzelfirma to be self-employed. You can invoice from your own name/address and create a separate bank account just to keep the business related incomings/outgoings separate. You only need Einzelfirma/GST, etc.. registrations if you hit 100K per year depending on Canton.

My 2cent,
Groovy

Probably you will also have to pay AHV so you should inform them that you plan to do freelance work on the side - better than getting a surprise AHV bill some years down the road.

The authorities want to prevent Swiss employers declaring their employees as "self-employed". This forces the de facto employee into low earnings, no job security, long working hours, etc.

A 1 client relationship is therefore not recognized as "self employed". It has nothing to do with green lights and bringing money.

No escape from AHV. Cautious clients will want to see the AHV approval of "self employed" status. Otherwise the client becomes liable.

Hi Everyone,

Very very helpful thread...would really appreciate if any of you could shed some light on my sistuation.

I am non-EU, married to a Swiss, have B permit. My US employer has offered to let me work from home in Zurich but unwilling to pay the social security after finding out the employer contribution is much higher than that in US. So I am thinking about set up as sole-trader or Gmbh.


My questions are:

1.The tax accountant we talked to in Zurich recommended Gmbh and cited 5K for booking keeping,3k tax administration per year and 2k for other expenses per year. Does that sound high? I am a CPA in US, but not familiar with Swiss tax law, can I act as my own book keeper?

2. Can I be set up as a sole-trader as it is only going to be myself and charge my US employer on a monthly basis, pay employer as well as employee contributions. From Goldtop's post, it seems this will be a problem as I will only have one client?


Thanks very much in advance!

Goldtop, i'm telling all this out of personal experience with two cantons and not out of bookworm letter-of-the-law approach. If you have various intl projects which you take part in and a company thru which you operate outside Switzerland (which is not just some agency), it only makes sense to register yourself as self-employed. Sure, if i had run into some perm road-block, i would've not been here by now. With a letter Kantonal authorities understood the situation and were einverstanden.

Pardon, in this situation, whom would you make liable for AHV? The company outside SUI? Hmm...

@ Groovy:
The discussion was about why the AHV authorities hesitate to grant the "self-employed" status. If you have been granted that status, then congratulations and make the most of it.

From the postings here, I understand that a single client is sufficient if it is outside CH. I have no experience of that situation. Suggest you talk to the AHV authorities.

OK. Thanks very much. Goldtop.

Looks like sole-trader (self-employed) is a better choice over Gmbh for the following reasons:

1. Easy to set up with very little starting up cost

2. Low on-going administration costs.

3. Lower tax rate than Gmbh too??? How much?

Would some veteran here please kindly help me out? Thanks a million!

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Yes, 10K is pretty high per year but that's why the sole proprietorship (as it is known in US and Canada) is the way to go. The problem is that two clients are needed.

The accounting overhead can be high for a GmbH plus the initial start up cost which is about CHF 1500.

And the start up capital but that can be used for the business.

If a self-employed status is chosen, though, there would be some tests on the way (3 unrelated clients in SUI, by the way, this test doesn't really apply if you have only one client but from outside of Suisse - Swiss give you green light to bring money from outside). Still a self-employed pays off in terms of red tape and the latest and greatest i've come across is that you don't even have to have your Einzelfirma to be self-employed. You can invoice from your own name/address and create a separate bank account just to keep the business related incomings/outgoings separate. You only need Einzelfirma/GST, etc.. registrations if you hit 100K per year depending on Canton.

My 2cent,
Groovy[/quote]

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Most of the above is correct as I have the same info. The only thing I cannot confirm is the one client from outside Switz...

Thanks so much for all the helpful information!!!

Regarding the one client situation, my husband and I called the SVA Zurich, the lady told us I will need to have 3 unrelated clients in order to be self-employed, even if my client is outside Switzerland.