Hello,

I am currently living in Zurich and my brother is living in Germany. We are in the process of forming a new GmBH but I don't know which country is better in that case.

I know that company taxes are higher in Germany but I don't know by how much. On the other hand any expenses are much lower in germany like rent, lawyer, accountant,..etc

I would really appreciate any advice because I am completely lost

Cheers,

-Hosam

well, to form a company, you need a business plan.

why dont you do your financial plan based on a german setup and a swiss setup.

Its very hard to answer a question like that as it also involves market prices and the market itself.

nobody says its easy to start a business so if i were you i would get started on that

Company and other taxes are indeed higher in Germany, but that is not the relevant question. If you form a company, it's to do something you couldn't do yourself. Ideally it's a means to collect an investment, and then use that investment to do something large. During the buildup phase, your company should not make a profit, or else it is not efficiently structured. Any profits you make (from sweat equity, or whatever) should be ploughed back into the company, to develop products, markets, or what have you.

The real key is one of double or triple taxation. If you have to pay taxes on money when your company earns it, and then pay taxes on it when you pay it out to implement your investment, and then again when you receive the money, say as an employee of the company, then it's a losing proposition.

There are accounting rules that allow you to avoid this under certain circumstances. Switzerland (in particular Zürich) are very picky about limiting these circumstances -- forming a company in Zürich is not something I would recommend.

Other cantons (and perhaps Germany, I don't know) are much more flexible about such things.

Zürich are very good about recruiting local subsidiaries of large international companies to come here, but they get tax holidays of 10 years, in return for agreeing to employ a certain number of people out of the local market. Such deals used to be available to small companies, but no more.

These politics are likely shortsighted -- the canton of Neuchatel did the same thing back in the 80s, bringing a bunch of microelectronics companies in. After the tax holiday expired, the companies simply left.