Hi,

I was wondering whether anybody here has had any experience with incorporating in other Canton (not the one of residence) using a c/o address.

There're many companies offering this service and they say it's all perfectly legal however I'd like to know whether you may actually end up getting audited/ in trouble.

In my case I'm looking for better taxation (of course) but also to separate the company and domicile addresses.

My activity is about remote IT services with hardly any clients in Switzerland.

Thank you,

J

Yes it is legal, but whether it is actually worth it or not is an entirely different matter and you need to make very careful calculations before doing it.

- These addresses are not for free, there is usually a standard charge plus further fees for each correspondence forwarded to you, further charges if they have to sign for letter and so on...

- All income will be effectively taxed twice once at the corporate level and once again at the personal level when you distribute it.

- The calculation for the valuation of ownership of a company can be very high in some cantons when it comes to wealth tax.

Seek proper professional advice.

__________________
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Thank you for the information.

I'm aware of the double taxation but I think it's worth it in my case.

Yes, I'll indeed seek professional advice.

I wanted to know if somebody had a bad experience.

Not advice per se, but more hear'say, as I've been considering the same: check with a tax specialist for sure.

Just having especially a c/o domicile address at a Treuhand in a low tax canton is a risk. If you actually show some kind of 'establishment' eg. office, staff employed there, then you're generally good.

(Check your dm I may have something to help)

Regarding experience, I have one second-hand... there was this chatty woman on the train to Italy, and she spent a lot of time educating us on how much she was pissed because some authorities were looking into her husband's company, apparently due to him working in a canton but having the address in another one.
Details aside, my takeout was that these strategies are sometimes a bit stretched and there is some official scrutiny.
If you're having professional advice you should be covered.

I've done this in the past, mainly Cantons Zug and Schwyz. I never had a bad experience and when I eventually closed the company's as they no longer served purpose, the procedure was quick and easy. We just had to wait a bit for the certificate of no objection from the tax authorities which took 3 months, so I had to continue to pay the registered office fee for that period.

Distributions in the form of salary and expenses are of course deductible from profits, and should you pay a dividend the 35% withholding tax will apply, and which you can claim back on your personal taxes. We never paid dividends so that was not an issue, even though the company's were profitable.

My only caution now, is if you are resident in Switzerland, and in another canton, the authorities are cracking down and may ask you to prove substance. This goes beyond just having an office and a local employee. It's where the key management decisions are also taken that count.

So you may need to travel once or twice a week to your "office". Keep detailed records of when and how you travelled, with backup receipts, and make proper minutes of your meetings / decisions showing clearly they were taken in the "office" and showing who was present.