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Old 25.01.2007, 17:28
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Self Employment issue

I am a UK national and arrived in Thurgau with my UK partner and our three children in September 06. looked for a normal Swiss job in Sales & Marketing, but was unable to find one.

I then managed to get a years contract with a UK company on a self employed basis, salary guaranteed for 12 months and three months notice thereafter. I send them an invoice every month and they transfer the money into my Swiss account. All my travelling expenses and work related expenses get paid by the UK company. I get paid Gross in USD from the UK.

I then employed a local accountant to take up my case with the local authorities so that my tax and pension is paid in CH. I am earning good money and it didn't seam to be an issue.

The authorities have come back and said that I cannot be self employed on the basis that I have signed an exclusive contract with a UK company. Ie I cannot receive a revenue from anybody else.

This has left the accountant recommending that I set up a Swiss GmbH at CHF 20K. Firstly I have not got 20K to do this and I am asking the question why must I.

If I do this then I will obtain the B or C Bewilligung.

So then I ask the questions:-

My partner works full time, if we marry then I will get an L Bewilligung, same one as her, but can I now enter the Swiss tax system

My kids are in CH, can they say that I can only stay here for 90 days / year. Although we have adequate childcare in place for the three kids, I am saying that because I work from home and my partner works full time I look after the children on a daily basis that fits around my work. I can adequately finance myself and am no burden on the state and have all the necessary insuraces in place, ie health, accident etc.

What would happen if I set up a UK Ltd company (CHF 250) and employ myself and send myself to Switzerland on a years contract to be with my family. Obviously I want to pay tax here.

Has anyone been in a similar situation or know of a sensible way forward.

Andy

Last edited by telandy; 25.01.2007 at 19:38.
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Old 30.01.2007, 21:27
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Re: Self Employment issue

Quote:
I am a UK national and arrived in Thurgau with my UK partner and our three children in September 06. looked for a normal Swiss job in Sales & Marketing, but was unable to find one.

I then managed to get a years contract with a UK company on a self employed basis, salary guaranteed for 12 months and three months notice thereafter. I send them an invoice every month and they transfer the money into my Swiss account. All my travelling expenses and work related expenses get paid by the UK company. I get paid Gross in USD from the UK.

I then employed a local accountant to take up my case with the local authorities so that my tax and pension is paid in CH. I am earning good money and it didn't seam to be an issue.

The authorities have come back and said that I cannot be self employed on the basis that I have signed an exclusive contract with a UK company. Ie I cannot receive a revenue from anybody else.

This has left the accountant recommending that I set up a Swiss GmbH at CHF 20K. Firstly I have not got 20K to do this and I am asking the question why must I.

If I do this then I will obtain the B or C Bewilligung.

So then I ask the questions:-

My partner works full time, if we marry then I will get an L Bewilligung, same one as her, but can I now enter the Swiss tax system

My kids are in CH, can they say that I can only stay here for 90 days / year. Although we have adequate childcare in place for the three kids, I am saying that because I work from home and my partner works full time I look after the children on a daily basis that fits around my work. I can adequately finance myself and am no burden on the state and have all the necessary insuraces in place, ie health, accident etc.

What would happen if I set up a UK Ltd company (CHF 250) and employ myself and send myself to Switzerland on a years contract to be with my family. Obviously I want to pay tax here.

Has anyone been in a similar situation or know of a sensible way forward.

Andy
Firstly as a UK national you can get a permit without much difficulty normally. The mistake you made is to sign an exclusive contract in your name. It is not just Switzerland that does not like this but many other countries as well. Effectively you are now a pseudo employee of the company without the benefits ie social benefits and with a strong desire to deduct things such as expenses from your taxable income - hence the resistance.


Lets look at some of your points. A Swiss GmbH is actually relatively cheap to set up and does not cost 20K. I assume you have some work related tools ie computer, printer, fax etc. You can "Sell" these to the company and effectively place them in the company's name. Also, you might own a car. If so, then you can give that to the company too. At this point you will have achieved the 10K paid up requirement of a GmbH. The 20K is the minimum maximum that you can be liable for and not the amount of money required to be invested. You will also need to create articles of incorporation and have these formally notarized as well as registering with the local company registrar and potentially the VAT people. You will then be a director of a Swiss company and can work and bill through it. At this point you have a right to a permit. You can find out plenty about setting up a GmbH in other threads.

If you marry you will still be in the same situation as before apart from you will indeed enter the Swiss Tax system as Swiss income tax is payable on joint global wealth and earnings of the couple. But do note, you will not be part of the Swiss employment market as they will view you as being a UK employee and part of that market. You will also need to get an accountant involved who is fully aware of the tax treaties between the UK and Switzerland and that is going to cost you

With respect to kicking you out, no they are not going to do that as you have another right here that allows you to stay with your family unit even if unmarried. And now you contradict yourself, sorry for being blunt, by saying that you can adequately finance yourself but are not able to find the few thousand to set up a Swiss company... I know what you mean but the Swiss do have a different opinion of financing yourself...

If you set yourself up as a UK company you will fall inbetween the lines. While you are resident here you are liable for Swiss Tax, however with the contract you have you will need to pay tax in the UK. The Swiss will not see you as part of their system but will tax you and this will fall under the tax treaty between the two countries.

What would I suggest. Firstly, it will be much easier if you set up a Swiss company to deal with this. You then only need to ensure that your existing contractual relationship is switched from your name to your company name. If for some reason you are not prepared to do this then you run the strong risk of not becoming part of the Swiss employment market and that would have negative implications in the long run not least of which is your pension fund.

What you could do is set-up a UK based marketing company and you are employed as the Swiss agent in Switzerland with a salary paid into your bank account in Swiss Francs and pay yourself the deductions for all the relevant social funds. This would however be quite messy although it might work. The reason it would be messy, is that the company employing you should be registered in Switzerland in some form and you don't want it to be. If you are wanting to simply work along side and not within the law then this is not a problem, but you are wanting to work selectively around the law choosing the bits you want to apply and not others. Normally you are either in or out but not in and out if that makes sense.

What I would suggest is simply thinking about where it makes most sense to have your business and if that is in the UK then forget about informing the Swiss authorities - you are a house husband if they ask. If it makes most sense to have your company in Switzerland set up the Swiss GmbH (see other threads for instructions) and join fully in with all the fun. Thanks in advance for the reputation ;-)
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Old 30.01.2007, 22:29
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Re: Self Employment issue

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What would happen if I set up a UK Ltd company (CHF 250) and employ myself and send myself to Switzerland on a years contract to be with my family.
While it is possible to do this in theory, it is really not the way to go. Basically what you would do is set up a UK company, have it establish a branch office in Switzerland and have that branch employ you. This branch would then have to register to pay social security, VAT and corporation taxes. It would also have to join a pension fund and make the required payments for you. There are however several issues with this solution:

- The social security guys may refuse to register your company becase all of the work is out side the country and none of it relates to the Swiss economy. I've had this one from them in the past.

- At this stage our company is not registered in the register of business names and this is often required for may contracts, so you would need to do this. To do so you would need to have the company's M & A translated in to German, certifed and so on this would cost...

- The next thing is that the UK & Ireland no longer accept non resident companies, so you would have to produce two sets of accounts etc., filing one set in Switzerland for the branch and one in the UK for the parent. And given that the contract is with a UK company I expect you would have many long arguments with the various revenue agents to try and agree some kind of accounting rules, given that the revenue would most likely be considered revenue of the parent, while the expenses would be paid out by the branch.... so an expensive process I expect.

The bottom line is that you need to establish a Swiss company and have done with it. Remember that the CHF20,000 does not need to be cash, it can be in kind as well - Computer, Car, Books etc.....

Best Regards,

Jim
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Old 23.02.2007, 17:29
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Swiss Tax - Self employed on an L permit

Out of the kindness of the Swiss hearts they have given me an L permit, due to my family being here, but I am not aloud to work.

Everyone knows that I am working, it is just that they won't accept the UK contract, the Gemeinde are trying to let me pay Swiss tax, although I will have no rights on the social system. I am still waiting to see whether this is possible, the Gemeinde thinks it is, but the accountant has doubts.

My question - Since I am now resident in CH with an L permit, do I have the right to say that I would like to pay Swiss Tax as oppossed to UK tax under the double taxation agreement. I get my fourth monthly pay cheque this month and I would like to pay some Swiss tax.
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Old 19.03.2007, 11:25
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Re: Self Employment issue

Another route is to approach an agency (elanit, talisman - pm me for more). They'll do your payroll for you and suggest contract routes to sort out the mess, (e.g. one from you to them employing an agency employee) and one from them to you (naming you as the employee).

They'll normalyl look to take between 50 and 100 CHF per day for this.

Its not cheap, but they'll do your payroll and sort it out. Its not an option I would recommend (I would go down the swiss gmbh route) but it is another option.
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Old 19.03.2007, 12:04
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Re: Self Employment issue

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I
The authorities have come back and said that I cannot be self employed on the basis that I have signed an exclusive contract with a UK company. Ie I cannot receive a revenue from anybody else.
Ask your accountant if it is possible to register as "Selbstständig im Nebenerwerb". Sorry, I cannot translate into "official" english. It basically means you can earn part-time, on the side, independently. I did this when working from home as a translator and didn't have to "set up" a company for it.
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Old 23.08.2008, 08:09
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Re: Self Employment issue

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Out of the kindness of the Swiss hearts they have given me an L permit, due to my family being here, but I am not aloud to work.

Everyone knows that I am working, it is just that they won't accept the UK contract, the Gemeinde are trying to let me pay Swiss tax, although I will have no rights on the social system. I am still waiting to see whether this is possible, the Gemeinde thinks it is, but the accountant has doubts.

My question - Since I am now resident in CH with an L permit, do I have the right to say that I would like to pay Swiss Tax as oppossed to UK tax under the double taxation agreement. I get my fourth monthly pay cheque this month and I would like to pay some Swiss tax
Not enough information for a helpful answer. Please state your circumstances as clearly as possible and I'm sure someone will be able to help.
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Old 23.08.2008, 08:59
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Re: Self Employment issue

I was in the same situation a couple of years ago and still find myself in this situation. Firstly what is your job,since you are not allowed to work in Switzerland. That is a fact and will be in your L permit.

In my case I am a European Sales Manager for a company and travel a fair bit. This means that I can say and do say that my work is outside of Switzerland, so I get around the clause of not being able to work in CH.
I even have a letter to that effect from my company.

With the UK company I used to work for I was deamed by them to be a self employed consultant. This meant that I wrote and sent them an invoice every month and they transferred my gross salary directly into a Swiss bank account. The Swiss authorities didnt accept the contract, but it did mean that I could pay Swiss tax. Dont expect the Gemeinde to sort out the tax quickly. We have just sorted out 2006 and I have paid no tax for 2007 or 2008 at the moment.

On the social side you have no rights to enter the Swiss social system, the only thing that you can do is set up a pension fund elsewhere and perhaps have some llife and critical illness cover here, which would pay out a sum of say CHF100K per year if you had a critical illness, ie it would substitute an income. This sort of cover is offered by Winterthur and Swiss life, however it is expensive, but you can offset it against tax, column 3a.

Bottom line, what is your work and legally you are not allowed to work in Switzerland, other options may be that you become self employed, if you have more than three customers. The only dissadvantage of this is that you have to pay both the employers and employees contributions.

Second other option is that your UK company set up a branch office in Switzerland, but this will require CHF20K (the same as if you set up here on a self employed basis).

Third option is marriage, giving you work rights but then it depends on youir job in the UK, it is probably best to try and get a job with a Swiss employer.

In my case my employer is opening an office here in 2009 and that will solve my problem.

Hope that this helps. I have been down the road that you are embarking on.

If you get caught working in Switzerland you could be deported by the immigration Police.

So to answer your original question - If you are domicile here, you are entitled to pay Swiss tax, however this doesnt give you the rights to enter the Swiss social system. Yes I am not allowed to work in Switzerland, but because I am domicile here, I pay Swiss tax. I also fill out a UK tax return.

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Out of the kindness of the Swiss hearts they have given me an L permit, due to my family being here, but I am not aloud to work.

Everyone knows that I am working, it is just that they won't accept the UK contract, the Gemeinde are trying to let me pay Swiss tax, although I will have no rights on the social system. I am still waiting to see whether this is possible, the Gemeinde thinks it is, but the accountant has doubts.

My question - Since I am now resident in CH with an L permit, do I have the right to say that I would like to pay Swiss Tax as oppossed to UK tax under the double taxation agreement. I get my fourth monthly pay cheque this month and I would like to pay some Swiss tax.


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Old 25.08.2008, 16:48
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Re: Self Employment issue

I think the regulations changed in 2008 for a company set up.
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Old 25.08.2008, 16:51
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Re: Self Employment issue

Danny - Please tell us more! If things have changed then please tell the forum, so we can all benefit.
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Old 01.03.2012, 12:21
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Re: Self Employment issue

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I think the regulations changed in 2008 for a company set up.
Please let me know about the new regulation in switzerland for self-employed Portuguese and where to begin the registration
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