It is frequent for non-EU citizens to set up companies in Switzerland. However, as well as the regulations applicable to the chosen legal structure for the business, specific conditions must be met when applying for the work permit. This article aims to provide the basic knowledge required before thinking of opening a business in Switzerland as a foreigner.
The different legal business structures:
A. Sole Proprietorship (Raison individuelle)
Eligibility: Open to individuals residing in Switzerland.
Capital Requirement: No minimum capital.
Ownership: Owned and operated by a single individual.
Registration: Required with the commercial registry if annual revenue exceeds CHF 100’000.-.
Liability: Unlimited personal liability.
B. Limited Liability Company (Sàrl / GmbH)
Capital Requirement: CHF 20’000.- (fully paid in).
Shareholders: One or more individuals or legal entities.
Representation: The company must be represented by a person with an address in Switzerland. This can be a manager or a director of the company.
Liability: Limited to the company’s assets.
C. Company Limited by Shares (SA / AG)
Capital Requirement: CHF 100’000.- (at least CHF 50’000.- must be paid in).
Shareholders: One or more individuals or legal entities.
Representation: The company must be represented by a person with an address in Switzerland. This can be a member of the board of directors or a director of the company.
Liability: Limited to company’s assets.
Swiss residence and Work Permit Requirements:
A. Self-employed
Permit Type: You need a residence permit (typically Permit B) that allows self-employment.
Requirements:
i. The applicant must present a viable business plan, demonstrating that the business will:
• contribute to the diversification of the local economy in its field of activity
• create jobs for the local workforce
• invest substantially in the local economy
• generate new contracts for the Swiss economy
• expect an important turnover over the next three years
ii. The applicant must have sufficient personal financial means
Approval Process: The cantonal and federal immigration authorities must approve the application.
Health Insurance: Proof of valid Swiss health insurance is mandatory.
As a result of these requirements, the Sole Proprietorship is rarely suitable for non-EU citizens as a legal structure. It is however open to you if you have a B permit based on family reunification or a C permit.
B. Employees
It has been observed that the requirements to obtain a self-employed work permit in Switzerland are rarely considered to be met by the cantonal authorities unless significant funds are demonstrated. It is therefore often recommended to apply as a director of the company in which case the requirements must still be met, but there is less pressure on the applicant.
Practical Steps:
- Choose a legal form.
- Draft the articles of association.
- Open an escrow bank account and deposit the share capital into the account (for Sàrl/SA).
- Register the company with the Commercial Registry.
- Apply for a residence/work permit.
- Proceed to your arrival registration in the Canton.
We are here to assist you with all the different steps involved in the creation of your company as well as your immigration processes, contact us to find out more about our packages or book a consultation !
04/08/25 – Amélia Rauss, Attorney-at-law
