Contracting income - beneficial to operate as a Ltd co OR as an employee of an agency
I searched the forums and couldn't find anything specific about my situation, little bits of information from different perspectives were found though. It seems to me given the current employment market scenario in Switzerland a lot of people on here must have come across this dilemma, wherein they want to maintain their ties with Switzerland for living/taxation etc but need to look abroad for work.
I am trying to analyze the benefits vs the drawbacks of each type. The main points in consideration being reduction of taxes & having a safety net of unemployment insurance payouts for those rainy days, in that order.
- Better taxwise? anybody has an actual experience? e.g. UK Ltd one can probably retain about 70% of their billing(not accounting for IR35 etc), what would the percentage be in Switzerland? 85%? say for CHF 120K billing per annum, should be higher, being very conservative here..
- One time setup cost CHF 20K
- Operating cost & time & labour of the Ltd company - accountancy, regulations etc
- Can't claim unemployment insurance, when in between contracts(abroad, not in Switzerland) as still employee of own company, I guess not easy to wind down & start up new ltd co's that easily, frequently etc
- Wind down cost & time & labour etc especially when leaving Switzerland for good. On EU-C permit, not likely to happen soon, but still need to take into account
Employee of an agency
- Simplicity - No setup cost
- Operating cost - limited to agency comission - potentially very low(3-5% estimated), if agency did not find the client in the 1st place and simply operating payroll
- Have the safety net of claiming unemployment insurance when in between contracts(abroad, not in Switzerland)
- More taxes comparatively, as many company related expenses cannot be claimed fully?
- Agency commission vs no commission if own Ltd company
- Simpler? Possible to lower taxable income due to extra pension contributions, expenses
- No possibility of unemployment insurance
- No tax liability abroad, as the work duration in a particular country will be less than 6 months a year
Any feedback is appreciated.
Thanks is advance.