Switzerland is also known as the Swiss Confederation is a small country in Central Europe known for being a prime business hub that attracts investors and businesses from all over the globe. Despite being a small country with only 16000 square miles of area, it is one of the richest countries in the world.

Switzerland’s law related to civil liberties, freedom of religion, freedom of trade and business, and a democratic setup with stability makes it one of the best countries in the world. Switzerland guarantees civil liberties to not only its citizens but to foreigners visiting and doing business in Switzerland.

How to Start a Business in Switzerland as a Foreigner

Geographically, Switzerland is a very small country with almost very few minerals and raw materials and that makes it dependent on imports from other countries for many basic items. Its business sensibilities have turned that adversity into an opportunity making Switzerland import raw materials and then exporting processed goods.

Looking at Switzerland from an Economic Perspective

Switzerland is located in Central Europe and its location serves well for its international trade route. The country is also known for its exceptional natural scenery having Alps Mountain along with several lakes.  

Switzerland has a population of merely 8.57 million people and therefore has the lowest of unemployment. The country is one of the richest when it comes to per capita income. Due to low demand at home due to less population, the country was forced to opt for a free market economy.

Switzerland boosted its import of raw materials and turned them into finished goods by using cutting edge technology. It does value addition to many semi-processed goods and exports most of them through its very organized transport system. 

Due to higher exports and lower imports it has a positive trade balance making it a richer country that has drastically improved the lives of people and raising the standards of living in Switzerland.

Switzerland does well both in goods and service export. In 2018, it exported goods worth $310B while its export of services was $98.2B. The import of goods amounted to $294B and services amounted to $75.9B.

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Some Statistics on Business and Economy

  • France borders Italy, Austria, Germany, and France do connect well with European nations.
  • Being on 18th rank in exports, most of the products exported from Switzerland are Gold, Packaged Medicaments, Blood, Antisera, Toxins, Vaccines, and cultures, Base metal watches, and jewelry. 
  • Most of the service exports amount to financial services, travel, business professional, technical, and related to computer and IT.
  • Switzerland ranks 36 in Ease of Doing Business as of 2019 improving the ranking from 38th in 2018. 
  • With the inflation rate in negative and a very low unemployment rate of 3.4% Switzerland offers the best living standards to its citizens
  • In order to attract investment and to boost business opportunities, Switzerland has one of the lowest corporate tax rates of 18% while the income tax rate is 40% of income.

Ease of doing business ranked Switzerland on 36th spot and also calculated ranks on other aspects. These are:

  • Starting a Business: 81st rank
  • Dealing with construction permits: 71st rank
  • Getting electricity: 13th rank
  • Resolving insolvency: 49th rank
  • Enforcing contracts: 57th
  • Trading across borders: 26th rank
  • Paying taxes: 20th rank
  • Registering property: 18th ranks
  • Getting credit: 67th rank
  • Protecting minority investors: 105th rank

Thus, Switzerland is one of the most desired places for many of the businesses to invest and start their business.

Starting a Business in Switzerland

According to RISTER Sàrl fiduciary company, starting a company in Switzerland requires a procedure. Almost in all countries, there are certain ways through which one can start a business and it takes its own sweet time. Based on the Ease of Doing Business report, Switzerland scored 70.6 marks in ease of procedures to start a business. It scored 90.5 marks when it came to time requirements. On costs, it scored 98.9 marks while paid-in minimum capital it scored 93.9 marks.

Being a foreigner you have your own restrictions in starting a business. Like every country, Switzerland has also laid down various laws and rules that govern foreigners who intend to invest in Switzerland.

The first and foremost issue you will deal with while starting your business is the issue of getting a business visa and work permit. 

Choosing the right Business

Do deep research, meet with people concerned in this field, and spend time in business in order to find out which business you can manage based on your financial conditions and which business will be right to start in Switzerland.

There are certain types of goods and services that have a huge market in Switzerland and it is also exported. You must also look at various other aspects of business opportunities in Switzerland. 

A brief study of this will help you in choosing the correct business for yourself.

Obtaining Visas and Work Permit

The Visa you will get in order to visit and invest in Switzerland will be a business visa. There are certain rules related to obtaining a visa. There are certain classifications made by the government in order to obtain a visa.

For EU and EFTA members you actually don’t need a visa to visit Switzerland. All you need is a certain permission to invest and work in Switzerland. There are also a group of 26 Schengen Countries that permit passport-free travel between them.

Citizens of those countries that do not count in the above group of countries require Visa permissions from the State Secretariat for Emigration. Citizens of EU and EFTA nations do not require visas to travel to Switzerland.

They do require permits to work and stay in Switzerland in case they want to stay for more than 3 months. Those who want to stay for more than three months and they have visited for work purposes, they can contact the local cantonal migration office in order to extend their stay for another three months.

EU/EFTA citizens who want to stay for more than three months for work purposes need to register themselves in Swiss canton within 14 days of their arrival. You have to show that you have enough means to stay in Switzerland and you also need health insurance. 

For non EU/EFTA Citizens

Those who do not belong to EU/EFTA require a valid visa permit from the Swiss authorities in order to stay for more than 90 days. They also need a work permit in order to work. For those who want to stay for less than 90 days, it depends on country to country.

Types of Visas

L-Permit: This is a non-renewable type of visa permit granted to people who are here to work on a contract or fixed amount of time. The period of stay granted is 12 months.

B-Permit: Issued as a biometric card it is issued for a duration of 1-5 years and it can be renewed as per need. Usually given to those who have work commitments in Switzerland. 

Short term Swiss Visa: You can stay for 90 days especially for short term stay and work.

Immigrant Visa: Those who want to stay for long term basis and want to settle down while being at work in Switzerland. 

Non-Immigrant Visa: Issued for a fixed period of time for those who want to study and work in the country for a short and fixed duration of time.

Business Visas: You can stay for 90 days in the country for business purposes. Those requirements are the same as that of a tourist visa but few more requirements are needed. They are:

  • Invitation for business by a Swiss Company or Organization
  • Employer’s letter permitting you to work
  • You need to give evidence that your stay for business can be financially afforded
  • Last six-month bank statement of your business
  • Business documents to prove your business and its legitimacy like AoA.

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Application for Business Visa

You will have to apply for your business visa and for this you require several documents which are as follows:

  • You need to show proof of your funds that are available with you for investment
  • You must come up with a detailed business plan in order to explain how your business will create jobs and boost the economy of Switzerland
  • You must also present a detailed plan regarding money investment and the Articles of Association. Some required only memorandum of association
  • Your business visa permit will lead you to a permanent residence permit

You will also need to take C-permit for permanent settlement in Switzerland. You have to reside for 5 years in the country if you are EU/EFTA, Canada, and US citizen while 10 years of stay if you belong to another country.

Application for Business Visa in switzerland

Legal Structure of your Business

The legal structure of your business matters a lot in starting your business. A foreign national in most cases cannot start a business unless he gets permission after guaranteeing a certain amount of investment. 

Only a citizen of Switzerland can start a business in the country and you as a non-citizen requires a business invitation or work invitation from your employer.

The legal structure of your business determines various things when it comes to taxes, permits, revenue generation, exemptions, etc. You need to consult an expert while choosing this as it will impact your business.

Here are those seven types of legal structures:

  • Sole Proprietorship
  • Limited Partnership
  • General Partnership
  • A corporation or joint-stock company
  • Limited Liability Company
  • Subsidiary and
  • Branch

Documentation and other Formalities

Register your business by following the legal procedures established by the concerned authority. You will have to choose the legal structure of your business along with other necessary steps. 

The next step is registering yourself as a taxpayer along with your company. Since you will have to pay close to 18% as the corporate tax you need to get your company registered. It would be advisable for you to hire a tax expert.

Choosing your Business Space

It is a necessary requirement to register a place for your business office. It can be anywhere in Switzerland as authority permits. Get a space for yourself equipped with necessary amenities.

In case you are employing more than a dozen people you will need a big office and you can choose as per the requirements. 

Hiring Employees

Based on your choice of business you aim to start in Switzerland, you will have to hire employees for work. There are chances that you will ask some of your trusted colleagues to become senior members of your company and therefore you will be required to obtain a work permit for your employees who are not citizens of Switzerland.

It is obvious that a certain size of employees in your office will be from Switzerland and therefore you should open up applications, select them for interviews, and after scrutinizing the resume of each you can choose the deserving candidate.

One thing that can be perceived in a negative sense and that is a high standard of living and expensive lifestyle. Switzerland is one of those countries that have the highest per capita income and therefore you have to pay a lot to your employees.

Your Business and Legal Advisor

All this is not possible without having a legal and business advisor. Both can be the same or different people and it depends on you. Hire someone who is well experienced in this field. You can also consult foreigners who have started business in Switzerland. 

Fix a time to meet some of them who stay in Switzerland and take their guidance. Your legal and business advisor will handle most of your job related to visas, banks, loans, finances, business structure, and business setup, hiring of employees, and setting your business in motion.

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Managing Finances

For starting a business as a foreigner you must be required to invest a certain amount of money in Switzerland. In other cases, you need a Swiss citizen to start a business. Thus you need a certain amount of money as an investment with a plan.

It would be advisable to manage money without going for an immediate loan. Since you will not only be surviving in Switzerland but you will also be starting a business and it can’t entirely be done on bank loans. 

Thus it would be advisable for you to manage a decent amount of money on your own to start the business.