Establishing a company or branch in Switzerland

When establishing a business in Switzerland, a variety of documents and information need to be procured, allowing a swift procedure for the registration of the new Swiss company or branch in the Commercial Register.

This article will not outline the various types of companies available under Swiss law, but rather the required documents and information, which basically are the same with respect to the most favourite Swiss companies: the stock company (Ltd, or Aktiengesellschaft) and the limited liability company (LLC, or Gesellschaft mit beschränkter Haftung).

THE FOUNDER

If the founder is an individual, a copy of a valid passport and the place of residence are required.

If the founder of the Swiss company is a Chinese legal entity, a certified (by a notary public) and super-legalized commercial register extract; a certificate of good standing or comparable document of the founding legal entity, providing the full company name, registered seat and company identification number; together with a certified translation, are required.

The translation must be made into the official language of the competent Commercial Register in Switzerland. As a rule, English is acceptable as well. If the translation is not done in Switzerland, the translation certified by a foreign notary public needs to be super-legalized (if done in China) or be apostilled (if the country of notarization is a member state of the Hague Convention on Apostilles).

Furthermore, a certified and super-legalized or apostilled power of attorney of the founding legal entity to the natural persons acting on its behalf in connection with establishing a business in Switzerland is required.

In the case that it is not a Swiss company to be established but rather a branch of an existing Chinese company registered in Switzerland, the same documents and information are required. In addition, a copy of the articles of incorporation of the Chinese company and a copy of the resolution of the Chinese company resolving to establish the Swiss branch must be procured. Both copies must be certified and super-legalized or apostilled, with certified translations (with respect to the certified copies, super-legalization, apostille and certified translation, the same rules apply as mentioned above).

The Swiss bank may require additional documents to complete the know your customer (KYC) procedure before setting up the bank account. The Swiss bank may also require evidence that the Swiss company has its own offices and employees, as well as evidence that the Swiss company has taken up its business. Without the latter information, due to the applicable anti-money-laundering regulations, the Swiss bank may be reluctant to release the capital amount that had to be paid in at the bank when establishing the company.

THE EXECUTIVE BODIES

Additional documents and information are required with respect to the executive body of the Swiss company.

A copy of a valid passport and the place of residence must be procured, together with instructions as to the corporate function (director of the board, managing director or director) and signatory power that must be assigned to the relevant individual. A certified (by a notary public) execution of the declaration of acceptance of appointment, and of the signature specimen for the Commercial Register, is also necessary. Unless the notarization is done by a Swiss public notary, the declaration needs to be super-legalized or apostilled.

At least one person with sole signature power or two persons with joint signature power must be resident in Switzerland.

WORK PERMIT AND TAXES

Work permits for non-EU/EFTA (European Free Trade Association) nationals will only be issued to qualified applicants for which no Swiss or EU/EFTA nationals are suitable or available.

In practice, work permits to non-EU/EFTA nationals will be granted upon a convincing business plan and evidence that the applicant – be it the founder, or any other contemplated member of the executive body, or employee – holds a university Master’s Degree or has other qualifications that are indispensable for the company’s business. The minimum wage must be CHF100,000 (US$103,000) per year.

If all prerequisites are met, initially a temporary work permit valid for one year will be granted. The permit may be extended for another year.

If the company is able to demonstrate that it has successfully established its business, a work permit will be granted valid for several years (renewable) or an undetermined period of time, issued for consecutive periods of one year, or renewable without further examination of the business. However, after the initial phase, it is expected that three quarters of all employees must be individuals who are not initially attributable to the founder.

The work permits are subject to a yearly quota and the discretion applied by the competent Swiss authorities with respect to the qualifications of the applying individual differs among the various 26 cantons of Switzerland.

However, the work permit will only be valid in the relevant Swiss canton by which it is granted. The work permit must hence be applied for in the same canton where the Swiss company shall have its registered place of business.

On the other hand, with respect to the contemplated registered place of business of the Swiss company, it is important to consider that the tax load among the 26 Swiss cantons differs considerably. It is recommended to consider both the various tax loads and practices, with respect to work permits, when identifying the place of business for the new company.

Thomas Krizaj is a managing associate with VISCHER. Fiona Gao, an associate of VISCHER’s China Desk, also contributed to this article