Just wanted to thanks, Richard. I fall into the freelancer category but all the information you've provided in this thread is extremely useful, cheers.

Thanks Richard et al for the useful questions and answers so far. One thing I'm having problems to grasp with is the relationship between registering for MWST and starting an Einzelfirma. Whilst the VAT Registration threshold here is turnover SFr 75,000, does a similar threshold exist which then necessitates the founding of a company once the turnover has exceeded this amount?

Based on projected out-turns, I am likely to exceed the VAT threshold, but the cost involved to start an Einzelfirma would just not be worth it unless the business undertook a rapid amount of expansion which I am not ready for yet. I suppose it’s a bit of a catch 22, but surely there are many start-ups in exactly the same position?

Cheers.

I will write about VAT I promise I am just not finding the time to do this and am currently sinking under the workload. Be careful with the VAT threshhold of 75K though. This is NOT fixed in stone there are exceptions. You can as a sole trader be registered for VAT that is not a problem at all and the administrative effort of VAT is also no issue.

My wife is about to accept an offer for an ex-pat assignment from the US to Switzerland and I have a couple of questions in regards to my possible new career upon our relocation. I am considering becoming a "Day Trader" of equities, futures, etc.... and was wondering about any tax implications that may arise in Switzerland.

A few details......

I will be ONLY be trading my own funds.
I will be clearing trades through US brokerage firms.
I will continue to report all gains/losses on US tax returns.

Thanks for your help,

mick c

Just one question. Given that you are almost certainly doing this electronically how will the Swiss authorities possibly know? If you are not claiming a discounted tax rate in America it makes no logical sense to declare it?!

Thanks Richard.

I had thought that might be the case but I wasn't sure. Just wanted to make sure and didn't want to break any tax laws. Last thing I want, is to move and find out that there is some massive tax or some special rules.

Thanks Again,

mick

Please do not misunderstand me. The Swiss are wanting you to declare all income earned world-wide so legally you are obliged to tell them. Point here being they have a bilateral tax agreement with Switzerland and to do this correctly you would need to declare your income in Switzerland and change your domicile status in America. You would also need to get permission to work in Switzerland which would mean forming a company unless of course your wife would be working for a well known NGO in which case you can with a Ci permit simply be self-employed. Whichever way you would then become liable to Swiss social contributions and insurances and this is quite a lot of red tape. So I simply asked whether you wanted to do this or whether you simply wanted to carry on living as if you are still in America...

Hi Everyone,

Dave A, thanks for pointing me to this thread because it's right on time!

Richard, thanks for all of your valuable advice! I'm new to the forum and have just moved to Lausanne from Paris by way of Chicago so working in Switzerland is all new to me.

I am a freelance web content writer/editor. I've had my own Limited Liability Company (LLC) registered in the US for seven years now so your description of a GmhB seems a little familiar at least -- except in the US you could set up everything in an LLC for about 1,000 US max! It's way less expensive then what I've encountered in Europe.

So far I'm finding a market for my service, which surprised me. I have one client ready to come on board now. We thought that because the client's parent company is in the US, that working through my existing LLC would work. Unfortunately, that's not the case because the actual work will be in Switzerland, and after talking to their legal team yesterday, it appears I will have to setup either a GmhB or become a soletrader.

Naturally, they want to do what will be legal and tax efficient for them and I want to do the same for me, yet at the same time, I still want to put myself in a position where working with me remains attractive to other Swisss organizations in the future. My concern is that I will probably only be in Switzerland for about 2 years before my husband is ready to take on some other country.

Does it make sense to start up a GmhB now? Or should I just start off as a soletrader? If I do start GmhB now how easy, time consuming, expensive is it to dissolve it later if I need to? What happens to any money I've paid out in pension -- can it stay where it is or must it be transferred to another fund? Basically, I'm looking for advice as to what would be the smart thing to do long term versus short term. Honestly, with moving from France to Switzerland, etc., I just don't have the extra 10K right now to set up as a GmhB? If I'm going to be working here I want to help not hurt the family income. Many thanks for any thoughts you have!

I really don't know where to write this but I left my business back in my none-EU home and working on my MBA in Lausanne. Even though the MBA is demanding but the fact that I'm not working is driving me off the wall, I've gotten so used to working...to voulanteer is great but I'm thinking in the lines of Free Lance as my Student permit hasn't come through yet.

Hi Richard

I've been researching and reading as much as I can here!

We live in Strasbourg, France and moved here from the UK last year. I run as a sole trader (organic as it is termed here) in France, selling rare and highend audio to people all over the world.

We are looking to move to CH, although in this instance we want to move to the French side. Numerous reasons, don't want to bore you.

Anyway I have seen many questions about setting up companies in Zurich and Zug etc but nothing about the Vaud and south Freiburg (gruyeres).

I would be looking to start as a sole trader once again...I am quite scared to make the wrong decisions! I think in Geneva this type of business is classed as a Raison Individuelle.

Say I could earn 120k CHF brut per year in the Vaud (after TVA/VAT)..as a soletrader selling many items to clients all over the world. What kind of taxes would be involved and how could a sole trader be more tax efficient? I would obviously set up a seperate business account in CH to make things more black and white.

Also, I came up against a real shit law this week in France. It came about as I sold some amplifiers for over 10000 euros and the gents travelled around 1000kms to check them over first. When I tried to take my money to the bank in cash they told me it was forbidden to deposit cash into a business account in France...only in small amounts per month under 3k euros. I can only imagine how it encourages people here to hide money away...crazy. Is it the same in CH?

From what I can see there is a minimum pillar 1 contribution. This is on top of the income tax in the Vaud. Then there is personal pension (pillar 2?), can this be in the form of property/second home?

I guess I can get a B-CE permit to start all this off.

What I want to make sure is that we would definitely be better off in the Vaud than in Strasbourg....from a tax/earnings perspective.



Best regards

Richard

Doh! Double post.

Because those are usually cheaper, although there are areas in Switzelrand that grant a 0% tax rate to companies for 10 years to encourage regional development...

No, as this is your pension fund...

Is that to Gmbh's only?

Where do you mean?

I'm not sure whether it also applies to sole traders. There is a map somewhere that shows all the regions where this happens.

I have been a bit busy lately and therefore have neglected this somewhat... Anyway you are stuck a bit in your situation as the only way you can proceed is to set up a GmbH. As a US citizen you cannot simply work as a soletrader. Disolving a GmbH is relatively straightforward and in your circumstances could have some additional tax benefits. That said if you don't have the ca 15K then this is a non-starter...

No it also applies to AGs but the point here is it does not apply to a sole trader as there you are effectively taxed as a person and not as a company and they cannot go around giving everybody 0% tax can they...

When you work as a sole trader your tax situation is that of an individual. Granted you can make additional deductions but you are still being taxed on earnings as if you were an individual.

Your are correct when you say there is a minimum pillar 1 contribution. Pillar 2 is optional and the rules for the pillar 3 change to allow you to make higher contributions. In Switzerland you can deposit whatever you like into a bank - cash is king here. I would also be surprised if that is a law in France. It seems strange as you are allowed to make that kind of deposit as an individual and from there you can transfer the cash over electronically. So it makes not sense to restrict the amount of cash you can deposit. Add to that what if you are a shop and take 4K per day. With this rule you would need to go to the bank twice per day and if your meant that 3K per month is the limit then you would not be able to run your business as you would have the cash but would not be able to buy anything from your suppliers unless you paid cash as well. That makes no sense whatsoever so I think (but don't know) that a mistake has been made somehow.

If you are making or believe you will make 120K Brutto that means you will be having a profit after everything but before tax of 120K. In this case you will also be liable for VAT. It will work out better for you to set up a GmbH or seeing as you are in the French part of Switzerland a Sarl (Société à responsabilité limitée). This would then be appreciatively more tax efficient...

No, no mistake. I am a premier customer with old HSBC and made a point of calling them up personally. Can you believe it? I can't...in this instance I tried to deposit a large sum and they said they needed invoices as security! If you find out different let me know but I have two other sources who said it was the same.

I calculated my income brut after VAT and based on what I earn in France. I will also be helped by the fact that when I sell outside of CH i won't pay any VAT, just the customer...who can arrange for shipping or collect in person as they often do wih very expensive audio.

Thanks for answering the other questions!!!

Richard

I have no idea what I am talking about - but if the customer collects in Switzerland wouldn't then that be considered a local sale and put the onus of VAT recovery on the customer - unless your business takes place in a "port franc" (now what's the english name for that) ?

Hi Shorrick

When I sell on ebay the price is final. In Europe then I have to deduct VAT (in France 19.6% sh#t!!) from the end price. Outside I just send as-is and the importer pays the VAT upon entry into their country and based on the insured value.

Often people try to get around this by arranging shipping themselves (declaring less insured value) or collecting in person and hoping to get through the duane without being stopped. Funny business but I won't take part in falsifying customs invoices.

If I sell within CH then obviously I have to pay the 7.6% VAT.

Richard