Want to become self-employed and looking for the simplest way to get started? A sole proprietorship could be the right legal form for you. There is no minimum capital, no notary and no incorporation agreement. You simply start your business activity and you are in business. This guide explains step by step how to set up a sole proprietorship in Switzerland, what it costs, which obligations apply and what you need to consider regarding accounting and social insurance.
What is a sole proprietorship?
A sole proprietorship, officially referred to as a sole enterprise, is the simplest and most popular legal form in Switzerland. More than 340,000 sole proprietorships are currently entered in the commercial register (Zefix), along with hundreds of thousands of others that operate below the mandatory registration threshold.
The principle is simple: one natural person runs a business or carries out a professional activity. A sole proprietorship has no separate legal personality. In legal terms, you and your business are one and the same. This means that you make all decisions yourself, retain the entire profit and are liable with all your private and business assets.
The sole proprietorship is a typical choice for freelancers, consultants, tradespeople and service providers who work alone or with a small number of employees.
Sole proprietorship vs. GmbH: the most important difference
Before you start, it is worth taking a brief look at the alternative. The key difference compared with a GmbH is liability. With a sole proprietorship, you have unlimited personal liability. With a GmbH, liability is generally limited to the company’s assets. However, a GmbH requires at least CHF 20,000 in share capital, a notary and double-entry accounting from day one.
A sole proprietorship is the better choice if you are starting with limited risk, want to remain flexible and do not want to provide a large amount of capital. If your business grows, you can convert it into a GmbH later. You can find a detailed comparison in our guide to legal forms.
Setting up a sole proprietorship: the process step by step
1. Start your business activity
Unlike a GmbH, a sole proprietorship is established without formal incorporation. It exists as soon as you begin your business activity. You do not need a notary or a commercial register entry. You become a business owner from the moment you send your first quotation or offer your first service.
2. Choose a business name
Your business name must include your surname. This is a legal requirement. You may add your first name, a creative element or a description of your activity, provided the name is not misleading. Examples include “Meier Web Design”, “Anna Meier Consulting” or “Meier & Co. Textile Trading”.
You can check whether your preferred name is already in use through the federal business name index Zefix. Note that the name of a sole proprietorship is protected only at the location of its registered office, not throughout Switzerland as it is for a GmbH or public limited company.
3. Enter the business in the commercial register when required
Once your annual turnover reaches CHF 100,000, you must enter your sole proprietorship in the commercial register. Below this threshold, registration is voluntary but offers several advantages, including local protection of the business name, a unique enterprise identification number (UID) and a more professional image when dealing with business partners and banks.
The simplest way to register is through EasyGov.swiss, the federal government’s official platform for businesses. Complete the online form, print it, have your signature certified by your municipality or a notary and send it by post to the cantonal commercial register office. Your entry is usually published within a few days.
4. Register with the OASI compensation office
This is the step most frequently forgotten, and one of the most important. As soon as you begin your activity, you must register as self-employed with the relevant OASI compensation office.
You can choose between your cantonal compensation office, such as SVA Zurich or SVA Bern, and an association compensation office. The office uses documents such as quotations, invoices and contracts to assess whether you are genuinely self-employed.
Practical tip: If you plan to enter your business in the commercial register, wait until the entry is active before registering for OASI. The compensation office can then retrieve your business details directly from Zefix, which can speed up recognition of your self-employed status.
As a self-employed person, you pay your OASI, disability insurance and income compensation contributions yourself. Depending on your income, these contributions amount to around 5.4% to 10% of your net profit. Set aside a reserve for them from the beginning. The first invoice from the compensation office often comes as a surprise.
5. Register for VAT from CHF 100,000 in turnover
Once your annual turnover reaches, or is expected to reach, CHF 100,000, you are generally liable for VAT and must register with the Federal Tax Administration (FTA). Below this threshold, registration is voluntary. It may still be worthwhile if you can reclaim a significant amount of input tax, for example because you have high material costs.
Our VAT guide explains the details of VAT reporting, including the effective method, the net tax rate method, deadlines and common mistakes.
6. Set up your accounting from day one
Even as a sole proprietorship, you are required to keep accounts from day one under Art. 957 of the Swiss Code of Obligations. The good news is that simplified accounting is sufficient as long as your annual turnover remains below CHF 500,000. This means maintaining a clear record of income, expenses and your financial position. Double-entry accounting becomes compulsory only above this threshold.
However, simplified accounting must also be complete and accurate from the start. Your profit flows directly into your personal tax return, and gaps or missing receipts can cause problems with the tax authorities and the compensation office.
Our recommendation is to use double-entry accounting from the beginning. This may sound like extra work, but it does not have to be if you use the right tool. With Infinity, double-entry accounting is just as straightforward as a simple income and expense record because the traditional debit and credit logic runs entirely in the background. You see clear entry suggestions, confirm them and AI assigns everything correctly. This gives you two real advantages: a much better overview of your finances from the beginning, including your balance sheet, income statement and outstanding items, and a system you already understand if you later convert your business into a GmbH or public limited company.
How much does it cost to set up a sole proprietorship?
A sole proprietorship is the least expensive legal form in Switzerland. If your turnover remains below CHF 100,000 and you do not register voluntarily in the commercial register, setting up the business itself costs CHF 0. The only potential costs are:
- Commercial register entry, voluntary or compulsory from CHF 100,000 in turnover: around CHF 120
- Certification of your signature by a notary or municipality: CHF 20 to CHF 50, depending on the canton
- Domain name, website, business cards, accounting software and similar expenses: varies
There is no minimum capital, no notary fee for incorporation and no deed of incorporation.
Checklist: setting up a sole proprietorship
- Defined and started the business activity
- Chosen a business name that includes the surname and checked it on Zefix
- Completed the commercial register entry through EasyGov.swiss, either voluntarily or because turnover has reached CHF 100,000
- Registered as self-employed with the compensation office
- Opened a business bank account, recommended but not required
- Checked VAT liability, which generally applies from CHF 100,000 in turnover
- Set up accounting for income, expenses and receipts from day one
Taxes: how your profit is taxed
One major advantage of a sole proprietorship compared with a corporation is that there is no double taxation. The profit of your sole proprietorship is not taxed separately. Instead, it flows directly into your personal tax return as income from self-employment. The same applies to the business assets, which are added to your private assets.
This simplifies many things, but it also has a downside. In profitable years, tax progression can noticeably increase your taxable income. Once your profit reaches a certain level, it is therefore worth comparing the tax burden with that of a GmbH, ideally with a brief calculation or a discussion with a fiduciary.
Your accounting with Infinity
Accounting is the part of self-employment that most people prefer to postpone, and the part that causes the most trouble when neglected. With Infinity, you manage your accounts the way accounting for sole proprietorships should work: simply, accurately and without prior accounting knowledge.
Connect your bank account and Infinity uses AI to suggest the appropriate entries automatically. Capture receipts by taking a photo with Live Capture, create QR invoices and quotations directly in the app, and keep track of your income, expenses and overall financial position at all times. If you eventually exceed the CHF 500,000 threshold and need to switch to double-entry accounting, Infinity grows with you.
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