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Old 31.03.2020, 14:01
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Unemployment Insurance/chomage for Directors (Corona)

I am the director of a very small enterprise (i.e. myself) which is itself a subsidiary of a slightly larger US firm. Due to the Corona virus both the US and Swiss offices are now insolvent. The US might stugglemon for a bit hoping to get COVID19 releif but this isn't possible in switzerland.



Some background, last week the company was about to be acquired and I was discussing relocation benefits if I move to their office in Zurich, the next day they terminate the acquisition and revoked any offer of employment. The acquisition was progressing well and we were days away form signing the terms and conditions so I had every expectation that everything would work out. Our other investors pulled out with Corona fears and since we ran the account close to the wire being a tiny startup about to be acquired, we now have no option. Thus leaving my up a creek without a paddle. Luckily no creditors and hopefully just enough cash reserve to cover legal fees.


However, as I understand it, directors of companies are not entitled to chomage in Switzerland, and I can't simply lay myself off or go on furlough as a director. I am working with an attorney but the process takes 1 year once notices to (non-existent) creditors are published. This puts me in a very difficult situation, no salary and no chomage despite paying the social insurances for 2.5 years. I still can't understand why rules would be in place to block directors who have been paying significant social taxes.


I know in some countries with similar rules regarding company directors, that these rules are being relaxed in light of the Corona virus. But I can't find any definitive answer if Switzerland is doing the same?



If not, what options do I have? I believe that somehow I can transfer control of the company to the attorney who can then relieve me of my duties, but my attorney seemed against this option. Perhaps because there is much more work involved and they know that the company has only minimal cash reserves.
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Old 31.03.2020, 14:12
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Re: Unemployment Insurance/chomage for Directors (Corona)

Sell the company to a broker. This has been discussed before. Someone who went through it recently updated their thread. Try searching.
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Old 31.03.2020, 15:43
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Re: Unemployment Insurance/chomage for Directors (Corona)

Thanks.
Won't using a broker require additional costs? It also likely become very complex because the swiss subsidiary is 100% owned by a US firm and they almost certainly don't want the subsidiary sold to a 3rd party which can reuse the company name.
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Old 31.03.2020, 16:15
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Re: Unemployment Insurance/chomage for Directors (Corona)

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Thanks.
Won't using a broker require additional costs? It also likely become very complex because the swiss subsidiary is 100% owned by a US firm and they almost certainly don't want the subsidiary sold to a 3rd party which can reuse the company name.
Just to clarify something, if you do not own any part of the subsidiary or the parent company, then you are simply an employee with the title of 'director', so you should not be subject to the normal rules for directors/owners of a company.
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Old 31.03.2020, 16:31
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Re: Unemployment Insurance/chomage for Directors (Corona)

The word 'Director' can have so many meanings. But I agree with above post, if you are not owner of the Company, you are an employee, and should be treated as such.

A young friend who owns a Company in the UK posted this today, a petition for support for small company Director/owners

https://www.change.org/p/uk-parliame...167-en-gb%3Av2
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Old 31.03.2020, 16:38
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Re: Unemployment Insurance/chomage for Directors (Corona)

Quote:
The word 'Director' can have so many meanings. But I agree with above post, if you are not owner of the Company, you are an employee, and should be treated as such.

A young friend who owns a Company in the UK posted this today, a petition for support for small company Director/owners

https://www.change.org/p/uk-parliame...167-en-gb%3Av2
UK small co directors have been taking the piss by paying themselves salaries of around 8500 a year so no National Insurance is payable but they get a full credit for NI & then pay the balance as a dividend. Avoiding Bothe employee & employer NI, I don't have any sympathy.
When I had a UK LTD co(1981-95) I paid full NI on all earnings & never took a dividend.
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Old 31.03.2020, 16:43
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Re: Unemployment Insurance/chomage for Directors (Corona)

If you are registered in the Swiss "handelsregister" (commercial register) then no, director is not just a title. However, I was in a situation many years ago where the company (of which I was a registered director) placed all staff temporarily on minimum work (2 days per month) due to extreme financial pressure and I claimed from RAV (Chomage) for a top-up. After some months of arguing they did eventually pay, although I don't know exactly the rationale - possibly because I was not an owner.
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Old 31.03.2020, 17:15
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Re: Unemployment Insurance/chomage for Directors (Corona)

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I am the director of a very small enterprise (i.e. myself) which is itself a subsidiary of a slightly larger US firm. Due to the Corona virus both the US and Swiss offices are now insolvent. The US might stugglemon for a bit hoping to get COVID19 releif but this isn't possible in switzerland.



Some background, last week the company was about to be acquired and I was discussing relocation benefits if I move to their office in Zurich, the next day they terminate the acquisition and revoked any offer of employment. The acquisition was progressing well and we were days away form signing the terms and conditions so I had every expectation that everything would work out. Our other investors pulled out with Corona fears and since we ran the account close to the wire being a tiny startup about to be acquired, we now have no option. Thus leaving my up a creek without a paddle. Luckily no creditors and hopefully just enough cash reserve to cover legal fees.


However, as I understand it, directors of companies are not entitled to chomage in Switzerland, and I can't simply lay myself off or go on furlough as a director. I am working with an attorney but the process takes 1 year once notices to (non-existent) creditors are published. This puts me in a very difficult situation, no salary and no chomage despite paying the social insurances for 2.5 years. I still can't understand why rules would be in place to block directors who have been paying significant social taxes.


I know in some countries with similar rules regarding company directors, that these rules are being relaxed in light of the Corona virus. But I can't find any definitive answer if Switzerland is doing the same?



If not, what options do I have? I believe that somehow I can transfer control of the company to the attorney who can then relieve me of my duties, but my attorney seemed against this option. Perhaps because there is much more work involved and they know that the company has only minimal cash reserves.
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Old 31.03.2020, 17:24
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Re: Unemployment Insurance/chomage for Directors (Corona)

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UK small co directors have been taking the piss by paying themselves salaries of around 8500 a year so no National Insurance is payable but they get a full credit for NI & then pay the balance as a dividend. Avoiding Bothe employee & employer NI, I don't have any sympathy.
When I had a UK LTD co(1981-95) I paid full NI on all earnings & never took a dividend.
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Old 31.03.2020, 17:31
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Re: Unemployment Insurance/chomage for Directors (Corona)

This Swiss Federal government webpage "Unemployment insurance and position comparable to that of an employer" might assist the OP with next steps (English):

https://www.kmu.admin.ch/kmu/en/home...-employer.html


Added:

"Abandonment of the position comparable to that of an employer
A person occupying a position comparable to that of an employer is however, entitled to unemployment benefits if he or she leaves the company or abandons this position permanently.
The following facts entail the permanent departure from or abandonment of the position comparable to that of an employer:
Closure of the company
Bankruptcy of the company
Sale of the company
Leave with loss of position comparable to that of an employer"

Last edited by Mullhollander; 31.03.2020 at 18:06.
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Old 31.03.2020, 17:42
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Re: Unemployment Insurance/chomage for Directors (Corona)

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Just to clarify something, if you do not own any part of the subsidiary or the parent company, then you are simply an employee with the title of 'director', so you should not be subject to the normal rules for directors/owners of a company.
Quote:
The word 'Director' can have so many meanings. But I agree with above post, if you are not owner of the Company, you are an employee, and should be treated as such.

A young friend who owns a Company in the UK posted this today, a petition for support for small company Director/owners

https://www.change.org/p/uk-parliame...167-en-gb%3Av2
Quote:
View Post
If you are registered in the Swiss "handelsregister" (commercial register) then no, director is not just a title. However, I was in a situation many years ago where the company (of which I was a registered director) placed all staff temporarily on minimum work (2 days per month) due to extreme financial pressure and I claimed from RAV (Chomage) for a top-up. After some months of arguing they did eventually pay, although I don't know exactly the rationale - possibly because I was not an owner.





Well this does raise an interesting point. I have absolutely zero financial tie to either the swiss company or the American parent. I do have employee stock options the same as all employees (startup) but no actual shares. I didn't found the company, merely operate it.





However, I am listed in the swiss commercial register as director. So this isn't just a job title but a legal title.
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Old 31.03.2020, 17:50
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Re: Unemployment Insurance/chomage for Directors (Corona)

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This Swiss Federal government webpage "Unemployment insurance and position comparable to that of an employer" might assist the OP with next steps (English):

https://www.kmu.admin.ch/kmu/en/home...-employer.html





That is useful but highlights it is a somewhat grey area. While I am the official director of the swiss company, I have infact very limited decision making powers. Financially, the subsidiary is entirely reliant on the US firm and they controlled all matters leaving me to take responsibility of the small scale projects..


Another clarification, is about 80% of my time I was nothing more than a software engineer doing work for the US parent. Only the rest of the time I was developing business strategy, account management for potential clients, etc.
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Old 31.03.2020, 18:52
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Re: Unemployment Insurance/chomage for Directors (Corona)

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If you are registered in the Swiss "handelsregister" (commercial register) then no, director is not just a title. However, I was in a situation many years ago where the company (of which I was a registered director) placed all staff temporarily on minimum work (2 days per month) due to extreme financial pressure and I claimed from RAV (Chomage) for a top-up. After some months of arguing they did eventually pay, although I don't know exactly the rationale - possibly because I was not an owner.
Am also registered as a Director in the Swiss Handelsregister. This title in itself does not exclude me from claiming any entitlements in the case of unemployment.
You will be as entitled to claim according to the conditions available to anyone else. Whether you are entitled to claim is a different matter. You need to consult your local RAV.

OK, my employer is a considerably larger company than one or two persons, but the OP should really inform him/herself properly over such things before setting up an international enterprise.

I doubt that EF can supply this info. Let‘s see.
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Old 31.03.2020, 18:59
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Re: Unemployment Insurance/chomage for Directors (Corona)

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However, I am listed in the swiss commercial register as director. So this isn't just a job title but a legal title.
That is not the same thing, probably have the employees of UBS & Credit Suisse are in the register and was I bank in the day. It made no difference when it came to unemployment benefits - the fact was I did not own any of those companies.
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Old 31.03.2020, 21:01
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Re: Unemployment Insurance/chomage for Directors (Corona)

Is there any possibility that the CH company can continue trading? My accountant told me today that I, as owner and sole director of a Swiss GmbH, cou claim up to 80% of lost earnings through the staff short hours initiative due to the Corona virus. It's not a long term solution, but might give you some breathing space
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