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Old 19.05.2017, 10:40
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Husband and Wife Business Setup

I am employed full time on a B permit since 2012 and am taxed at source for that. My wife does not currently work and has a B permit since we are married.

We are wanting to start a business for which she will be the primary worker but which I will have an active role in. I also do my own private work on the side. It's all home based business.

We're unsure how the best way to proceed will be, mainly in terms of tax and general ease of administration.

I think there are probably two options:

1) She is sole proprietor of 'her' business and I help her out with it but have no official connection to the business. My side work is me being 'partially self employed'

2) We create a partnership and the new business and my side work come under that banner.

I suspect option 1 is probably the easiest to set up but would option 2 be better in terms of taxation? With option 1, she would be liable for all the tax of that business, whereas option 2 it would presumably be 50/50 between us and my 'half' would perhaps be lower as I am already taxed on my 'day job'.

Any and all advice, suggestions, alternatives welcome.
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Old 19.05.2017, 11:10
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Re: Husband and Wife Business Setup

First of all, you'll either need to ask for a permission to do any such kind of self-employment work, or just get C permit - you can get one after 5 years with a language test, so apply already.

Tax-wise, a partnership shouldn't really make a difference: yes, partners normally tax their own part of income separately, *but* as a family you're taxed together anyway so long as you're going through ordinary taxation process (which she'll be probably required to do as a self-employed or after you get a C), so it makes zero difference.

More interesting can be to establish a capital corporation, GmbH or AG. The company then constitutes a separate taxable subject and this gives you some playroom for tax planning. Rent a mailbox in low tax commune to minimize corporate taxes, take some earnings as privilegedly-taxed dividends instead of as a highly taxed salary.

It's also better from liability perspective. You make a product that accidentally kills someone - there's a good chance that only your GmbH/AG with its invested capital will go down
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Old 19.05.2017, 13:34
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Re: Husband and Wife Business Setup

Thanks ivank.

I was under the impression that on a B permit it was perfectly acceptable to be self-employed. Is this not so?

My permit is due for renewal at the end of the year, but I've been led to believe different things about getting the C. Some seem to say it's optional after 5 years, some say it may be automatic and some say that it's not possible and I need to wait until 10 years is up.
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Old 19.05.2017, 13:46
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Re: Husband and Wife Business Setup

https://www.ch.ch/en/working-switzerland-eu-efta/


And re the C Permit: depending on your nationality, you need to be able to show them a language certificate
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Old 19.05.2017, 14:02
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Re: Husband and Wife Business Setup

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I was under the impression that on a B permit it was perfectly acceptable to be self-employed. Is this not so?
No, a B permit does not automatically imply any right to work or engage in self-employment activities, especially for non EU. Check the conditions of your permits.

But a C permit on the other hand does. Whether you'll automatically get it or how hard otherwise you have humiliate yourself to get it depends primarily on your nationality. Some get it automatically after 5 years, some have to do a language test, some have to pass a language and luck test. After 10 years you generally get a right to have it regardless of nationality.
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Old 19.05.2017, 14:22
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Re: Husband and Wife Business Setup

I have been self-employed as a sole trader on a B permit for the last 2&1/2 years & your option 1 would be the easiest way to go. Having said that though if you decide to join your wife in the business then you would be treated as an employee & there by need to have all the extra insurance & pension regulations to pay & sort out. GmbH or AG are better suited if you expect to expand & have more employees & are also better with regards to not being personally liable. If you trade in excess off CHF99,000 per annum then you'll need to be VAT registered.. With regards to the C permit you can apply after 5 years living in the same Kanton but will need to take language test & possibly & integration test.There is absolutely NO problem setting up as self employed person, which ever way you decide to go if you are from an major EU country & hold a B permit..
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Old 19.05.2017, 14:35
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Re: Husband and Wife Business Setup

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No, a B permit does not automatically imply any right to work or engage in self-employment activities, especially for non EU. Check the conditions of your permits.
I'll check with the Gemeinde/immigration office.

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With regards to the C permit you can apply after 5 years living in the same Kanton but will need to take language test & possibly & integration test.
I didn't realise for the C you had to be in the same canton for 5 years. I had my first year in Bern, then 2 in Fribourg and now 1.5 in Bern again. Migros estimates I am B1 language level, which should be OK I think.
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Old 19.05.2017, 14:37
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Re: Husband and Wife Business Setup

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Migros estimates I am B1 language level, which should be OK I think.

Yes, as long as you have a test result to prove that, Migros certificates are not accepted.
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Old 19.05.2017, 18:35
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Re: Husband and Wife Business Setup

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With regards to the C permit you can apply after 5 years living in the same Kanton
The federal law (AuG) mandates only minimum 5 years residence in Switzerland. Cantons may have additional requirements, but as far as I can find,
this doc for BE doesn't say that you had to stay in BE all this time, just 5 years on B anywhere in Switzerland. So give it a try, they may give you a C or they might reject it on some other grounds.
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Old 20.05.2017, 10:58
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Re: Husband and Wife Business Setup

Yes, I moved from Lausanne to zurich, after 4.5 years in Lausanne... and I was eligible to apply for C permit after overall 5 years in Switzerland. Yes, you need B1 level language certificate. Only Zurich canton needs B1 level... other cantons are OK with A2 level.
Goethe institute is accepted for applying for C permit. I am in the same boat now for C permit, non-EU but language at B1 seems quite challenging for me...
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Old 20.05.2017, 11:46
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Re: Husband and Wife Business Setup

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Yes, you need B1 level language certificate. Only Zurich canton needs B1 level... other cantons are OK with A2 level.
Goethe institute is accepted for applying for C permit.
Depends on your nationality. I didnīt need a language certificate for my C, so check that out as several EU countries are exempt from this.
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Old 20.05.2017, 12:45
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Re: Husband and Wife Business Setup

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Thanks ivank.

I was under the impression that on a B permit it was perfectly acceptable to be self-employed. Is this not so?

My permit is due for renewal at the end of the year, but I've been led to believe different things about getting the C. Some seem to say it's optional after 5 years, some say it may be automatic and some say that it's not possible and I need to wait until 10 years is up.
EU permit holders have full professional Mobility and are free to change employment or be self employed.

but you do need to prove to the social security that you are really self employed and not an employee in disguise.
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