Thank you this analysis. It is very interesting and helpful!
I did not include the full analysis for sake of brevity. I have a specific question about it however, for Richard, or for anyone else who followed the analysis.
If the company pays the employee 10,000 per month why is it that the company pays a total of 159,000 in fully expensed salary for the year? I calculated 120,000 fully expensed salary for the year (12 * 10,000). Does anyone know why the difference of 29,000 (159,000-12*10,000)? I ask because there is probably some significance to this that I am missing. Thank you

Yes there is quite some significance... There are social costs that are borne by the company and some that are split betwen the company and the employee. As a very minimum the company will pay:

1.5% unemployment insurance
5.1% state pension
7% pension fund (minimum)
2.5% accident insurance
1% other compulsory insurances and administrative charges

This amounts to at least 17% os the salary and in all probability more. On top of that there are things such as spesen, cost of a workplace, telephone etc that are real costs that are regularly missed from equations but still exist. A cost of 30% of the base salary isa relatively realistic if not conservative estimate.

Hi,
I need help for a couple of questions:

Is it possible to deduct the rent as an expense if you are free-lance and work from home? I know in some EU countries this is possible only as a certain %.

If I am an IT free-lance and I have a contract to work abroad, is there a limited time i can be paid in my Swiis bank accoun? I know in the Uk when you work abroad more than 6 months you have to pay taxes there and nowhere else.

I heard that if you are entitled for unemployment benefit and you do some free-lance jobs but the total amount is less than the unemployment benefit, the RAV tops it. I think this is an interesting way to start as a free-lancer but I would like to be sure this is true.

As a company you need to register for a sector but as a free-lancer is it also necessary?

Thanks in advance

hI
This is good poll. Looks like a lot of people like me need help from this forum

Regards
MDCP

Hi Richard,

Thank you very much for the excellent overview you have given here.

Regarding starting a company (GmbH) as a vehicle through which I can be employed and accept contracts to do work as IT contractor for others you have mentioned in your report:

"Insurance: ca 3000 should see it okay note these need to be paid in advance..."

Could you give a breakdown of these 3000 chf?

I understand that this is the total cost for
-AHV/IV/EO
-BVG
-Accident Insurance (private)

Where did you get your insurance from? / Which "Vorsorgeeinrichtung" have you chosen and why?

How could social security insurance costs be minimized?

I understand especially in the area of BVG the costs can vary quite a bit.

Thanks!
Steven

Hi

I have a question that may fit here. I am a UK passport holder and here on a B permit, however when I got my B permit I was employed (which I still technically am) and I am now starting up my own business therefore will be self emplyed/sole trader. Am I ok on my B permit as an EU citizen or do I need to head to the kriesburo to update them and register as a sole trader?

Will this effect my visa?

Be great to have your thoughts struggling to find the right answer as everyone says different things it seems.

Thanks

Yes and yes.

Why do you have a visa?

The AHV (or AVS) is compulsory so the rates are fixed. The amount you pay is based on your annual mass salary (for all employees). So there's no real way of minimising it.

With regards to the BVG (or LPP - 2nd pillar) again it's compulsory (depending on age and minimum salary) but depending on who you go with, you can design it so it's more suited to you. e.g. have more going into the savings part and less into the death benefits and vice versa.

Despite the rates being the same for LPP and accident cover, your premiums could vary between companies depending on their charges.

As all the insurances are based on annual mass salary, it's difficult to give an average figure. The best thing to do is ask for some quotes from different companies.

P.S. I was on a B permit when I started my company (still am in fact).

I didn't have to go to the population office or anything?
Maybe it's cantonal?

It may be worth noting that Richard, who started this thread, hasn't posted on here for around six months. Hopefully, other people may be able to offer you advice.

Hi
First of all thanks for all your posts - I've now read all these posts twice and taken notes! All soooo useful!

I have a question:
If you are self employed (a sole trader) and you make losses in your first year in business (due to initial investment, set up costs etc). If you are married and your spouse works in Switzerland, are your losses deductable on their tax return? Or does your spouse just get charged tax as if you didn't earn anything?

Thanks!

Very sound advice, I got a lot of pink slips coming from groups claiming to be a Handelregister. Hopefully this link helps people who might otherwise fall victim to these scamming leeches.

http://www.ktipp.ch/service/Warnlisten/Registerhaie.php

Its in German but Google Chrome Translate does a fine job. The one you mentioned (IFW...) is also on the list

Hi everyone, I am a EU citizen and a guitar teacher with a permit L and I wish to become self employed by giving guitar lessons.

can I be self employed with a permit L?

My permit L expires in October the 10th, where can I renew it?

I live in Davos, Klosters.

In a word: no. Not officially (legally)until you have a B. Will be happy to be corrected if I'm wrong.

Dear Richard, and indeed anyone else who can help.

I am currently self employed in Vaud. More or less got everything set up. Had a year's successful trading, filed first year's tax return with accountant's help, paid all my AVS each quarter, and then bugger me, the other half gets a job in Zurich.

So we're moving. I have informed all banks, pensions, savings, phone companies, the leccy etc, and the controle des habitants in Lausanne, who are telling the tax office. I need to let the local Caisse AVS know too (tomorrow's task).

Obviously, I need to inform the Zurich tax office and find the right AVS/AHV office to register with. So first question: is there more than one place to register, and is it anything other than location/ kreis based?

Second question, is there anything else official I need to do? (I don't earn enough to pay TVA/MwSt at the moment, as all clients are outside Switzerland and I've been hammered by the exchange rate)

Has anyone else who is self employed moved from one canton to another, and if so are there any crucial lessons to learn?

With apologies if this has already been covered: I couldn't find anything this specific already - but that's not to say it's not there.

Thanks in advance for any advice or insight

Sarah

t

Hi - this is really interesting and I am trying to work my way through what I should be doing if I want to establish my business. I was planning to start a consultancy business in canton Zurich in January 2012. I am a trailing spouse (yukky term) on a B permit and a UK citizen. I would be setting up as a sole trader working from home. I have information overload - this thread is so helpful - but I am trying to take all the information back to the basics.

I am allowed to do this unhinered though need to register to do this at my local town hall? or can I just go about marketing my services and then declare income for taxation?

Sincere apologies if I have already missed the obvious replies to this.

Hi John,
I also have an L permit and when i enquired about how to register as a sole trader/independent at the Fachstelle Migration in zug i was helped enormously and told all i needed to do was register for AHV, and with the Tax office.....but i called them both and i dont need to register until i have some money coming in.
Most people told me you have to register on the Handelregister ( the business register) but this isnt true....it is an option, there is no legal requirement until you earn over 100,000 chf a year. It costs 200 chf to register and the only benefit my brother in law could find for me would be to show that i am a registered business for credibility. Im a massage and psych therapist and generally get work from word of mouth so that isnt too important for me........
If you dont reply i will assume you couldnt renew the permit.....hahha...good luck.
Hope this helps

Hi OCMA,

I was told by the Fachstelle Migration in zug that you can deduct a part of your rent off your tax bill.......she suggested you just send it in and see how much they will give you as credit.
Also as a freelancer you dont need to register with the Handelsregister...it could have the benefit of making you more credible but im not sure that it is worth the 200 chf just for that...depends on you. It is only obligatory when you earn over 100,000chf a year.
You only need to register as freelancer with AHV and the tax office when you start earning money.......

Hope this helps