Go Back   English Forum Switzerland > Living in Switzerland > Business & entrepreneur  
Reply
 
Thread Tools Display Modes
  #1  
Old 14.07.2011, 18:23
xaphod's Avatar
Member
 
Join Date: Oct 2007
Location: Zurich
Posts: 175
Groaned at 0 Times in 0 Posts
Thanked 92 Times in 24 Posts
xaphod has earned some respectxaphod has earned some respect
At what income-level does it become worthwhile to --> GmbH / LLC?

Howdy
I've read a lot of useful info here about how to start various company types, thanks to all that have contributed. One thing that I don't see (yet?) is levels of income (rough guesses are ok!) that make it worthwhile. I'm trying to make the decision of einzelfirma vs GmBH/LLC, and to me it's mostly about the money.

Assume:
- I have a C permit (B-EU right now but will be C next year I hope) and am allowed to do these things, am a resident of Switzerland, am the only one in this company
- My company would only have income in Switzerland
- My company does not import or export anything, and would have no real-estate (rented or owned) - i'd be running it from my home
- Here's the kicker: I would keep my existing 100% job for at least the first few years (assume I made sure with my existing job this was ok for them )

So ignoring the obvious liability advantages of a GmBH, I believe there are probably tax benefits to a GmBH because the income would not be on top of my existing 100% job since it would be income of the GmbH. I also assume there are other advantages like charging the GmbH rent b/c it stores assets in my home, etc...

The question ends up being, at what point, money-wise, is it worth going the GmbH route? Right away because of the 100% job i intend to keep? Or after annual income exceeds some amount like 5,000chf or 100,000chf?

Thanks for any advice from ppl who started a GmbH, bonus points if you can talk about how much it costs you and how much you think you benefit from tax breaks....
X
Reply With Quote
  #2  
Old 15.07.2011, 19:40
Member
 
Join Date: Aug 2007
Location: Luzern
Posts: 100
Groaned at 0 Times in 0 Posts
Thanked 42 Times in 28 Posts
bytheseaside has earned some respectbytheseaside has earned some respect
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

No one can you give a magic number without probing into your personal finances and business plan. Consult a Treuhand specialising in SMEs. Good advice does not come cheap but can save you a fortune in the long run.
Reply With Quote
  #3  
Old 15.07.2011, 20:10
xaphod's Avatar
Member
 
Join Date: Oct 2007
Location: Zurich
Posts: 175
Groaned at 0 Times in 0 Posts
Thanked 92 Times in 24 Posts
xaphod has earned some respectxaphod has earned some respect
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

For a VROM guess I would hope it's possible not to have to consult anyone. Ie. are we talking 10,000 / 100,000 / 1m CHF income to make GmbH worthwhile?
Reply With Quote
  #4  
Old 15.07.2011, 22:57
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 14,500
Groaned at 280 Times in 239 Posts
Thanked 21,738 Times in 8,818 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

I have a GmbH. I did it for the liability, and because I want my company to be able to grow. Also, it helps dealing with other companies. At no point did an issue of money come into it... though if you were only making 10'000CHF a GmbH would propably be overkill. If you want a rough figure, I wouldn't do it for less than ~150K gross company income.

How are you going to get the money out of the GmbH into your hands? It's all very well the company have tax breaks, but you're the one wanting the money to spend.
__________________
Down with racism. Long live miscegenation!
Reply With Quote
The following 2 users would like to thank NotAllThere for this useful post:
  #5  
Old 18.07.2011, 17:02
Forum Veteran
 
Join Date: Dec 2005
Location: ZH
Posts: 1,185
Groaned at 15 Times in 13 Posts
Thanked 77 Times in 72 Posts
danny has earned some respectdanny has earned some respect
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Roughly 100 K or greater.
Reply With Quote
This user would like to thank danny for this useful post:
  #6  
Old 18.07.2011, 17:11
grumpygit's Avatar
Forum Veteran
 
Join Date: Feb 2011
Location: geneva
Posts: 1,476
Groaned at 29 Times in 16 Posts
Thanked 1,508 Times in 695 Posts
grumpygit has a reputation beyond reputegrumpygit has a reputation beyond reputegrumpygit has a reputation beyond reputegrumpygit has a reputation beyond reputegrumpygit has a reputation beyond reputegrumpygit has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Quote:
View Post
I have a GmbH. I did it for the liability, and because I want my company to be able to grow. Also, it helps dealing with other companies. At no point did an issue of money come into it... though if you were only making 10'000CHF a GmbH would propably be overkill. If you want a rough figure, I wouldn't do it for less than ~150K gross company income.

How are you going to get the money out of the GmbH into your hands? It's all very well the company have tax breaks, but you're the one wanting the money to spend.
Shareholder dividends. These days the effective tax on dividends is about 22pct
Reply With Quote
  #7  
Old 09.12.2011, 19:33
Newbie
 
Join Date: Nov 2011
Location: Spain
Posts: 5
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Gabyp has no particular reputation at present
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

The way you get the money out of the GmbH is you pay yourself a salary. Alternatively, the GmbH can loan you money.
Reply With Quote
  #8  
Old 03.01.2012, 21:13
Junior Member
 
Join Date: Feb 2009
Location: Basel
Posts: 43
Groaned at 2 Times in 1 Post
Thanked 11 Times in 3 Posts
dylan dog has earned some respectdylan dog has earned some respect
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Very interesting GabYp,

could you please detail what you mean by paying a loan to yourself?
If you get a loan from the GmbH, don't you have to repay it, sooner or later?

Thank you,
Dylan
Reply With Quote
  #9  
Old 03.01.2012, 21:23
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 14,500
Groaned at 280 Times in 239 Posts
Thanked 21,738 Times in 8,818 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Eventually, you have to repay it. It's useful for cashflow.
Reply With Quote
  #10  
Old 03.01.2012, 21:31
JBZ86's Avatar
Forum Legend
 
Join Date: Oct 2010
Location: Zurich and various mountains
Posts: 3,709
Groaned at 520 Times in 337 Posts
Thanked 4,258 Times in 1,944 Posts
JBZ86 has a reputation beyond reputeJBZ86 has a reputation beyond reputeJBZ86 has a reputation beyond reputeJBZ86 has a reputation beyond reputeJBZ86 has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

There's a reason folks pay 250chf upward an hour for this kind of advice by the way.

Just saying....
Reply With Quote
  #11  
Old 13.01.2012, 22:34
Junior Member
 
Join Date: Jan 2012
Location: Zurich region
Posts: 30
Groaned at 0 Times in 0 Posts
Thanked 7 Times in 7 Posts
guarana has no particular reputation at present
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

In this special case, if besides the small private business, one still has a monthly salary, it is worth preparing a business plan to see how the profits will develop. For the first one-two years, the business may have losses. And if you have "einzelfirma" being self-employed, the losses from your einzelfirma will be set against your salary in your "normal" tax return- and you may end up paying no tax at all... There is a rule that the losses should not be borne for more than 5 years in a row- then the Swiss tax authorities consider this business as hobby and losses will not be deductible for tax purposes.

And you can always convert your "einzelfirma" to a GmbH if you wish so at a later stage.
Reply With Quote
This user would like to thank guarana for this useful post:
  #12  
Old 23.04.2012, 22:51
axxxxe's Avatar
Member
 
Join Date: Jan 2009
Location: Zurich
Posts: 126
Groaned at 0 Times in 0 Posts
Thanked 36 Times in 14 Posts
axxxxe has made some interesting contributions
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Quote:
View Post
There's a reason folks pay 250chf upward an hour for this kind of advice by the way.
Anyone care to recommend someone who will give good advice for my 250chf?

I have an einzelfirma, around 150K income (80K profit) and am wondering if / how I can benefit going GmbH (or AG).

My first guess was it would be bad since the GmbH would pay taxes on its profit, out of which I would pay myself a salary (and get taxed again). But maybe that's not at all how it works...?
Reply With Quote
  #13  
Old 24.04.2012, 00:03
Forum Veteran
 
Join Date: May 2009
Location: suburbs of LA, USA
Posts: 934
Groaned at 11 Times in 10 Posts
Thanked 873 Times in 439 Posts
BrianJW has a reputation beyond reputeBrianJW has a reputation beyond reputeBrianJW has a reputation beyond reputeBrianJW has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Quote:
View Post
Anyone care to recommend someone who will give good advice for my 250chf?

I have an einzelfirma, around 150K income (80K profit) and am wondering if / how I can benefit going GmbH (or AG).

My first guess was it would be bad since the GmbH would pay taxes on its profit, out of which I would pay myself a salary (and get taxed again). But maybe that's not at all how it works...?
Im pretty sure you're salary would be a business expenses and so you would not get taxed on the profits before the salary is deducted and then on the salary (double taxed). By pretty sure it wouldn't work like that in Australia, England, or the US so Id be really really surprised but hey its Switzerland.

Definitely get professional advice. Sorry I don't know anyone.
Reply With Quote
  #14  
Old 24.04.2012, 07:06
Treverus's Avatar
Forum Legend
 
Join Date: Dec 2007
Location: Work in ZH, live in SZ
Posts: 12,232
Groaned at 351 Times in 284 Posts
Thanked 23,444 Times in 8,473 Posts
Treverus has a reputation beyond reputeTreverus has a reputation beyond reputeTreverus has a reputation beyond reputeTreverus has a reputation beyond reputeTreverus has a reputation beyond reputeTreverus has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Simple answer: If your company is intended to be a pure tax vehicle... why don't you instead move to a place with a lower tax than Zurich? I saved some 40% income tax when moving half an hour out of the city and there are many thousand Swiss doing the same... so I guess it is the more practical approach compared to running a company that does not really do anything. I am not a lawyer, so I cannot get you legal advice, but I'd bet that there must be a catch: you are in a city full of financial guys who love to discuss nothing more than which village offers the lowest tax rates... and nobody seems to use companies the way they are used to save tax in other countries... then there must be some hurdles, no? I know that there are some laws on "Scheinselbststaendigkeit", "pseudo self-employment", I guess that is a good starting point to research.
Reply With Quote
  #15  
Old 24.04.2012, 10:48
RTN RTN is offline
Forum Veteran
 
Join Date: Nov 2009
Location: Uetikon am See
Posts: 1,471
Groaned at 13 Times in 9 Posts
Thanked 1,678 Times in 749 Posts
RTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond reputeRTN has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Quote:
View Post
Anyone care to recommend someone who will give good advice for my 250chf?

I have an einzelfirma, around 150K income (80K profit) and am wondering if / how I can benefit going GmbH (or AG).

My first guess was it would be bad since the GmbH would pay taxes on its profit, out of which I would pay myself a salary (and get taxed again). But maybe that's not at all how it works...?
I use www.trevin.ch , Herr Boksburger has quite good english and knows all the tricks in the book to minimise your tax. He also handled all the start up paperwork when we started our GmbH, his fee for that was around Chf1000 plus government charges.
Reply With Quote
This user would like to thank RTN for this useful post:
  #16  
Old 24.04.2012, 12:34
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 14,500
Groaned at 280 Times in 239 Posts
Thanked 21,738 Times in 8,818 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: At what income-level does it become worthwhile to --> GmbH / LLC?

Quote:
View Post
...
My first guess was it would be bad since the GmbH would pay taxes on its profit, out of which I would pay myself a salary (and get taxed again). But maybe that's not at all how it works...?
It doesn't work like that. Your salary is indeed a business expense. You do, however, have to pay employers AHV, so a 100K salary is actually a bigger cost to the company.
Reply With Quote
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Second Job Abroad: Small Business/US LLC Geo039 Business & entrepreneur 4 09.12.2011 19:26
Can capital losses from GmbH be applied to founders' personal income for tax? itaril Business & entrepreneur 4 28.09.2010 15:45
Ice cream maker -- a worthwhile investment? ljm Food and drink 14 27.11.2008 11:56


All times are GMT +2. The time now is 02:24.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2022, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0