Incorporating Your Business in the Greater Zurich Area & Legal Forms of Companies in Switzerland

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In the Greater Zurich Area, we understand that time is …

In the Greater Zurich Area, we understand that time is
money and speed is key when it comes to incorporating
a new business.
Switzerland‘s pro-business legal system makes it easy to
launch operations in the Greater Zurich Area.
http://www.greaterzuricharea.ch/

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  • 1. Greater Zurich Area AG, May 2013: Incorporation 1 In the Greater Zurich Area, we understand that time is money and speed is key when it comes to incorporating a new business. Switzerland‘s pro-business legal system makes it easy to launch operations in the Greater Zurich Area: • Incorporating in Switzerland usually takes two to seven weeks. • Set-up is easy, fast and inexpensive. • Applications for work/residence permits run parallel, and don’t require additional time. • Efficient and competent public officials stand ready to help you with procedural questions. Please note: As entering the commercial registry and obtaining work permits is a parallel process at cantonal level, it is highly advisable to make a prudent choice of business location before registering your business. Incorporating Your Business in the Greater Zurich Area & Legal Forms of Companies in Switzerland Incorporating in the Greater Zurich Area • Costs of incorporating: Company set-up CHF 4,000 to 7,000 (Swiss francs). Stamp duty: 1% of the capital stock; the first CHF 1 million is exempt; the exemption applies at time of incorporation and to further capital increases up to a total CHF 1 million. Fees (registration, notary public, commercial register): approx. CHF 2,000. Consulting and legal fees: starting at approx. CHF 2,000 to 5,000 for small companies. Without stamp duty, start-up costs amount to approx. CHF 7,000. Total start-up costs however depend on the volume of capital stock and amount of consultancy. • No special permits are needed to purchase real estate for business purposes. • Company name must be exclusive; no danger of confusion with existing company in Switzerland is admissible (commercial registry webpage: www. handelsregister.ch; member cantons of the Greater Zurich Area currently are GL, GR, SH, SO, SZ, ZG, ZH). • Product registration may be required in special cases. Your partners at the Greater Zurich Area will suggest the best location available to your type of business and guide you through the incorporation process.
  • 2. Greater Zurich Area AG, May 2013: Incorporation 2 Product registration, permits and services Only a few products and services in Switzerland are sub- ject to special rules and regulations. They are carefully put in place to ensure safety and public health, as well as to provide environmental and consumer protection and to comply with international trade standards and norms. Selected professional services, such as banking and in insurance, may require a special licence and/or registra- tion before taking up operations. Permits and registrations may be required for importing or selling pharmaceuticals, cosmetic products, cleansing products, electrical devices, measuring and weighing devices, heating systems, pressure vessels and motorized bicycles. With the ratification of the “Cassis-de-Dijon” princi­ ple in June 2009, the few remaining restrictions on the import of goods and products from the EU have been further eased. Choices of incorporation: AG, GmbH, Branch The two most common types of legal entities for per- forming business activities in Switzerland are: The joint- stock company (or the “AG”) and the limited liability company (or “GmbH”). A popular third choice of for- eign companies for doing business in Switzerland is to operate through a branch office or work with distr­ib­ utors/agents. Joint-stock company: “Aktiengesellschaft (AG)” The “Aktiengesellschaft (AG)”, or joint stock company or corporation (equivalent to corp., Inc., Ltd. and Pvt. Ltd.) is most widely used in Switzerland by larger companies in trading and manufacturing, as well as by holding and commercial finance companies. The AG is an independent legal entity and its liability is limited to its capital. Capital requirements of the AG • An AG (Aktiengesellschaft) requires a minimum capital of CHF 100,000, which serves as the company’s liability. • At least 20% or a minimum of CHF 50,000 has to be deposited into an escrow bank account for set-up. • After entry into the commercial registry, the money is released and can be used in the company. Set-up of the AG • Set-up consists of filing public deed, containing articles of association, governing bodies and documenting shareholders’ individual deposits at time of incorporation. • The AG becomes legally official upon entry in the commercial registry. • Incorporation can be done by proxy. • At least one founder necessary. • The company name must have the addition “AG”, and may not bear any resemblance to an existing Swiss company. • Clearance of name by Commercial Register. Governing bodies & founding parties of the AG A) General meeting of shareholders: The general meet­ ing of shareholders consists of all shareholders and it is the most powerful body of an AG. It can change the articles of the association, and it elects the board of di- rectors as well as the auditors. B) Board of directors: The board of directors consists of one or more individuals and is the managing body of the corporation. At least one board member or director with single signature authority or two board members/ directors with joint signature authority must have do- micile in Switzerland. C) Auditors: A company must have its annual financial statement and the consolidated financial statements duly audited (“ordinary audit”) if two of the following figures are exceeded in two consecutive fiscal years: • Balance sheet total of CHF 10 million. • Turnover of CHF 20 million. • Annual average of 50 full-time employment positions. If this is not the case a company is only required to have its financial statements audited to a limited extent (“limited audit”). In the case of small companies with no more than 10 full-time employees the audit may be waived with the consent of all members (“opting out”). AGs are suitable for capital-intensive businesses in which the capital investment of the owners plays a major role.
  • 3. Greater Zurich Area AG, May 2013: Incorporation 3 Benefits and advantages of the AG • Liability is limited to company’s assets. • Anonymity of equity holders. • Shares are easily transferable. • Access to capital market if desired. Limited Liability Company – GmbH The GmbH (“Gesellschaft mit beschränkter Haftung”), (similar to LLC) is a legal entity in which the economic beneficiaries are partners. Partners take equity in the company by subscribing capital whereas the company’s liability is limited to the amount of the capital regis­ tered. A GmbH is suitable for any type of small to midsize enterprises, as well as for a holding company, adminis­ trating other group companies. Capital requirements of the GmbH • Minimum capital is CHF 20,000. • Capital must be fully paid at time of incorporation. • Easy transfer of equity shares, multiple equity shares per partner possible. • Minimum partner share is CHF 100. Set-up of the GmbH • Similar procedure as in setting up an AG. Governing bodies & founding parties of the GmbH • Managing director: At least one partner with single signatory power must be resident of Switzerland (or two with joint signature power). • Economic beneficiaries are the partners. • No board of directors required. • Auditors: same as AG. Benefits and advantages of the GmbH • Smaller capital requirement, which makes it better suited for small and midsize companies. • Liability is limited to company’s assets. Branch office The branch office is a Swiss business entity of an interna- tional parent company. A Swiss branch is treated like a Swiss company with respect to taxation, authorization, and registration making it operationally independent within Switzerland. Relations to the parent company are subject to CFC rules. The Swiss branch is often the incorporation model of choice for foreign companies entering the Swiss market. Incorporation of the branch • No branch capital necessary. • Only registration of the parent company at the cantonal commercial registry is required. • Swiss residency required to act as an authorized signatory and managing director. • Economic beneficiary is the parent company, which is also liable for the Swiss branch. Benefits and advantages of the branch • No separate equity required; endowment capital can be provided by the parent company, no particular amount is specified. • Set-up is easier and costs are the same compared to an AG or GmbH. • No stamp duty, anticipatory tax on profit transfer. • No Swiss partner required. • Attractive taxation (in conjunction with foreign tax laws). A GmbH is suitable for small and midsize businesses with medium scale capital in- vestment and limited liability of founding partners. Swiss branch is an attractive tax-efficient incorporation model well-suited for close business relations between a parent compa- ny and a branch office in Switzerland.
  • 4. The Swiss Code of Obligations holds the instruments for incorpo- rating your company readily available. To assure a successful and fast incorporation of your business, we recommend seeking the advice of relocation specialists such as the Greater Zurich Area AG at an early stage in the process of establishing a presence. At the Greater Zurich Area AG, we assist you with obtaining work permits and facilitate contact to cantonal authorities. We are happy to refer you to our proven partners such as local law firms and fiduciaries. All incorporation is local – the Greater Zurich Area AG is here to help you! Switzerland Greater Zurich Area AG Limmatquai 122 8001 Zürich / Switzerland Phone +41 44 254 59 59 Fax +41 44 254 59 54 info@greaterzuricharea.ch www.greaterzuricharea.ch USA Greater Zurich Area Inc. swissnex building 730 Montgomery Street San Francisco, CA 94111 / USA Phone +1 415 912 5909 CHINA Jianping Gao Representative China Phone +86 21 6149 8208 Have we sparked your interest? Would you like to get to know your options in the Greater Zurich Area in more detail? If yes, please contact your nearest Greater Zurich Area representative for more information. We are happy to assist you in every aspect of expanding your business to the Greater Zurich Area! Greater Zurich Area AG, May 2013: Incorporation 4