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Old 31.12.2014, 20:55
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Contracting income - beneficial to operate as a Ltd co OR as an employee of an agency

Hello All,
I searched the forums and couldn't find anything specific about my situation, little bits of information from different perspectives were found though. It seems to me given the current employment market scenario in Switzerland a lot of people on here must have come across this dilemma, wherein they want to maintain their ties with Switzerland for living/taxation etc but need to look abroad for work.

I am trying to analyze the benefits vs the drawbacks of each type. The main points in consideration being reduction of taxes & having a safety net of unemployment insurance payouts for those rainy days, in that order.


Ltd Company

Benefits
- Better taxwise? anybody has an actual experience? e.g. UK Ltd one can probably retain about 70% of their billing(not accounting for IR35 etc), what would the percentage be in Switzerland? 85%? say for CHF 120K billing per annum, should be higher, being very conservative here..

Drawbacks
- One time setup cost CHF 20K
- Operating cost & time & labour of the Ltd company - accountancy, regulations etc
- Can't claim unemployment insurance, when in between contracts(abroad, not in Switzerland) as still employee of own company, I guess not easy to wind down & start up new ltd co's that easily, frequently etc
- Wind down cost & time & labour etc especially when leaving Switzerland for good. On EU-C permit, not likely to happen soon, but still need to take into account



Employee of an agency

Benefits
- Simplicity - No setup cost
- Operating cost - limited to agency comission - potentially very low(3-5% estimated), if agency did not find the client in the 1st place and simply operating payroll
- Have the safety net of claiming unemployment insurance when in between contracts(abroad, not in Switzerland)

Drawbacks
- More taxes comparatively, as many company related expenses cannot be claimed fully?
- Agency commission vs no commission if own Ltd company


Other options

Self Employed?
- Simpler? Possible to lower taxable income due to extra pension contributions, expenses
- No possibility of unemployment insurance


Assumptions
- No tax liability abroad, as the work duration in a particular country will be less than 6 months a year

Any feedback is appreciated.

Thanks is advance.

Regards
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Old 31.12.2014, 21:36
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Re: Contracting income - beneficial to operate as a Ltd co OR as an employee of an ag

If you don't own your own GMBH or AG you'll have to do it as an employee of an agency. After deductions (but not tax) you'll get about 80-85% of the daily rate.
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Old 01.01.2015, 17:36
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Re: Contracting income - beneficial to operate as a Ltd co OR as an employee of an ag

Thanks DodgyKen.

here's wishing everyone a Happy New Year.
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agency, independent, ltd company, self employed




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