Starting a company in Switzerland is easier than many people think. Still, there are a few important topics that are better settled early than late. Decisions about the legal form, taxes, social insurance or bookkeeping often seem secondary at the start, but they can later have a noticeable impact on workload, costs and flexibility. If you take these basics into account from the outset, you build a stable foundation for growing the business. When you start out, you have to decide early which legal form fits, whether you need a commercial register entry, when VAT liability begins, how registering with the AHV (old-age and survivors' insurance) works and how to keep clean books from day one.
In the early phase, the focus is often on the product, customers, the website, financing or the first jobs. That is understandable. Even so, it pays to set up the administrative and financial basics properly and early. Mistakes with the legal form, taxes, social insurance or bookkeeping can later become unnecessarily expensive or time-consuming.
In this guide, you'll learn how to start a company in Switzerland, which legal forms exist, which tax and administrative obligations matter and what founders, freelancers and SMEs should pay particular attention to.
Starting a company in Switzerland: the key steps at a glance
When you start a company in Switzerland, you should think about more than the name and logo. What matters is that the legal, tax and accounting foundations are right from the beginning.
A typical company formation includes these steps:
- Test the business idea and business model
- Choose the right legal form
- Settle on a company name and check its availability
- Budget for formation costs and start-up capital
- Clarify whether you must register in the commercial register
- Prepare your AHV registration or social insurance
- Check whether you are liable for VAT
- Open a business account
- Sort out insurance and contracts
- Set up your bookkeeping and record your first receipts properly
Not every step matters equally for every legal form. A sole proprietorship is set up faster than a GmbH or AG, but you are personally liable. A GmbH or AG takes more preparation, but in return it separates private and business assets more clearly.
Which legal form suits your new business?
Choosing the legal form is one of the most important decisions when starting a company. It affects liability, taxes, social insurance, capital requirements, how you come across and, later on, the options for equity stakes or investors.
In Switzerland, many founders start with one of three legal forms:
| Legal form | Suitable for | Minimum capital | Liability | Commercial register |
|---|---|---|---|---|
| Sole proprietorship | Freelancers, self-employed people, smaller person-centred activity | No minimum capital | Personal and unlimited | Mandatory from CHF 100,000 annual turnover for a commercial business |
| GmbH | SMEs, agencies, service providers, small teams | CHF 20,000 share capital | In principle, the company's assets | Mandatory |
| AG | Startups, growth-oriented companies, equity participation models | CHF 100,000 share capital | In principle, the company's assets | Mandatory |
The best legal form doesn't just depend on what is easiest today. It should also fit your risk, your growth, your financing and your long-term plans.
Setting up a sole proprietorship in Switzerland
The sole proprietorship is the simplest way to become self-employed in Switzerland. It is particularly suitable for people who work alone, have low start-up costs and don't take on a high business risk.
Typical examples are freelancers, consultants, designers, coaches, photographers, tradespeople and other person-centred services.
The big advantage: a sole proprietorship needs no minimum capital and is comparatively easy to set up. If you work under your own name and for your own account, you can in principle start your activity and take care of the necessary registrations.
The main disadvantage is personal liability. With a sole proprietorship, there is no clear separation between business and private assets. If debts or legal claims arise, you are liable with your private assets.
For tax purposes, too, the sole proprietorship is directly tied to you. The profit from your self-employed activity counts as personal income and is taxed through your private tax return. Social insurance contributions are also calculated on the basis of your self-employed income.
A sole proprietorship is therefore a good fit above all if you want an uncomplicated start, work alone and your financial or legal risk remains manageable.
Setting up a GmbH in Switzerland
The GmbH (limited liability company) is one of the most popular legal forms for Swiss SMEs. It suits founders who want to come across more professionally, bring several people on board or keep their private assets more clearly apart from the business.
Setting up a GmbH requires at least CHF 20,000 in share capital. This capital must be paid in full. Important: the money is not a formation fee. After incorporation, it belongs to the company and can be used for business purposes.
A GmbH is a legal entity in its own right. This means it signs contracts, issues invoices, owns assets and pays tax on its profit. Liability is in principle limited to the company's assets.
For founders, the GmbH is often a good middle ground. It involves more effort than a sole proprietorship but is less complex than an AG. At the same time, it often comes across as more reliable to customers, banks, partners and employees.
For tax purposes, the GmbH's profit is taxed at company level. If dividends are paid out later, they are also taxed at the level of the shareholders. That's why it's worth thinking early about how salary, profit, dividends and reinvestment fit together.
Setting up an AG in Switzerland
The AG (company limited by shares) is especially suitable for growth-oriented companies, startups with investors, larger SMEs and companies with employee participation models.
Setting up an AG requires at least CHF 100,000 in share capital. At least part of it must be paid in at incorporation. Like the GmbH, the AG is a legal entity in its own right and in principle is liable with its company assets.
The AG's big advantage is its scalability. Shares are comparatively easy to transfer, stakes can be structured, and the legal form is well established among investors. That's why many startups choose the AG straight away, even though it takes more effort to set up and run.
But the AG is not automatically the best choice. If you start alone, don't plan to bring in investors and have a manageable risk, a sole proprietorship or GmbH is often simpler. If, on the other hand, you want to raise capital, give employees a stake or grow strongly, you should look at the AG early on.
Checking your company name: Zefix, Regix and trademark rights
Before you set up your company, you should check the name you want carefully. It's not just about whether you like the name. It must also be usable from a legal and practical point of view.
A good first step is a search in the central company name index Zefix. There you can see whether identical or similar companies are already entered in the Swiss commercial register. A company search via Regix can also be useful, especially if you want a more reliable view of whether your preferred name could clash with existing company names.
What matters, though: a company name and a trademark are not the same thing. Just because a name looks free in the commercial register doesn't automatically mean it's unproblematic under trademark law. That's why it's also worth searching the Swissreg trademark database of the Swiss Federal Institute of Intellectual Property.
In practice, this means:
- check the company name in the commercial register
- research similar names
- check the trademark in Swissreg
- secure the domain and social handles
- get legal advice if in doubt
Especially if your company is meant to build a strong brand over the long term, this check is more than a formality. Changing the name later costs time, money and trust.
Commercial register, notary and formation costs
Whether you have to register in the commercial register depends on the legal form and in part on turnover.
A GmbH or AG must always be entered in the commercial register. Formation involves a public deed, articles of association, payment of the capital and subsequent registration. On top come costs for the notary, the commercial register and, depending on the set-up, advice or a formation platform.
For a sole proprietorship, the commercial register entry is simpler. It becomes relevant in particular when a commercial business is run and annual turnover reaches CHF 100,000. A voluntary entry can also make sense below this threshold, for example if you want to come across more professionally or make certain business relationships easier.
Formation costs differ considerably depending on the legal form:
| Legal form | Typical cost logic |
|---|---|
| Sole proprietorship | Low formation costs, no minimum capital, commercial register depending on the situation |
| GmbH | CHF 20,000 share capital plus notary, commercial register and formation documents |
| AG | CHF 100,000 share capital plus higher formation and structural costs |
The distinction between capital and costs is important. Share capital isn't simply gone. It belongs to the company. Actual costs, on the other hand, are fees, notary costs, advisory work or external services.
Taxes when starting a company
Taxes aren't just a topic for later when you start a company. The legal form you choose directly affects how profits are taxed and what kind of planning makes sense.
With a sole proprietorship, business profit is taxed as the owner's income. For tax purposes, the business is not separate from the person. The higher the profit, the more progressive income tax kicks in.
With a GmbH or AG, it's different. Both are legal entities and pay profit tax on their corporate profit. They also pay capital tax on their equity. If profits are later distributed as dividends, they also become taxable for the shareholders.
For founders, the key point is this: the legal form affects not just the formation, but also salary, profit, dividends, reinvestment and future distributions.
For growing companies in particular, it pays to plan early. If you want to keep profit in the company and reinvest it, you'll weigh things differently from someone who wants to take the entire surplus privately.
VAT liability in Switzerland
Value added tax is one of the points most often forgotten or checked too late when starting a company.
The basic rule: companies must check whether they are liable for VAT when they reach, or are expected to reach, an annual turnover of CHF 100,000 from taxable supplies. For newly founded companies, it's not just what has already happened that counts. What also matters is whether it's realistic to expect this threshold to be reached within the next twelve months.
If you are liable for VAT, you must charge VAT on your supplies, account for it to the Federal Tax Administration (ESTV) and at the same time check whether you can deduct input tax on business expenses.
In the early phase, registering for VAT voluntarily can also make sense. That's especially true if you make large investments and your customers are themselves businesses liable for VAT. In that case, the input tax deduction can be financially attractive.
What matters, though: VAT isn't just a matter of filling in forms. It affects prices, invoices, bookkeeping, liquidity and how you communicate with customers.
You can find out more in our separate guide to VAT in Switzerland.
AHV and social insurance
When you start a company, there's also the question of how you are classified for social insurance purposes.
With a sole proprietorship, you are not automatically self-employed in the AHV sense just because you've started an activity. The compensation office checks whether you are recognised as self-employed. Relevant factors include whether you work for your own account, bear your own economic risk, operate independently and work for several clients.
This matters because bogus self-employment can lead to problems. If in practice you only work for one client, are bound by instructions and bear no economic risk of your own, the activity may be classified as employment for social insurance purposes.
With a GmbH or AG, as a founder you are often an employee of your own company if you work operationally for it and draw a salary. In that case, social insurance in principle runs through the company as the employer.
In short:
- Sole proprietorship: self-employment must be recognised by the compensation office
- GmbH/AG: founders are often employees of their own company
- Social insurance should be clarified early
- Bogus self-employment can become a problem where you depend on a single client
Especially when you start your first company, it pays not to put this off. AHV, accident insurance, the pension fund and other insurance depend directly on how your activity is structured.
Bookkeeping from day one
Many founders only think about bookkeeping when the first tax return, VAT return or annual financial statements are due. That's exactly when it gets tedious.
Relevant business transactions arise in the very first weeks: formation costs, software subscriptions, first invoices, receipts, expenses paid privately in advance, bank transactions, customer payments or outlays for the website, advice and infrastructure. If these aren't properly documented, the basis is missing later on.
As soon as you issue your first invoice, you should also make sure all the mandatory details are correct, such as sender, recipient, invoice number, description of the service, date, amount and, if you are liable for VAT, the correct VAT. We explain what belongs on an invoice and what to watch out for in Switzerland in our guide to writing invoices.
Good bookkeeping continuously answers the same questions:
- What income has been earned?
- Which expenses belong to the business?
- Which receipts are still missing?
- Which receivables are outstanding?
- Which VAT is relevant?
- How is liquidity developing?
- Which costs recur regularly?
The most important principle: bookkeeping shouldn't only happen at the end of the year. It should keep pace with your business all along.
For founders, this is crucial. If you have a clear overview early on, you make better decisions on prices, costs, investments, taxes and liquidity.
Typical mistakes when starting a company
Many mistakes when starting a company don't come from carelessness but from a lack of clarity. Individually, the key topics seem small, but in combination they quickly become hard to keep track of.
Common mistakes include:
- choosing the legal form based on formation costs alone
- underestimating personal liability with a sole proprietorship
- checking VAT liability too late
- putting off AHV registration
- not researching the company name thoroughly enough
- mixing private and business expenses
- not keeping receipts properly
- not using a separate business account
- catching up on bookkeeping only at the end of the year
- not planning salary, profit and taxes clearly
Mixing private and business payments is particularly critical. At first it seems convenient to run everything through the same account. Later, though, it leads to queries, errors and unnecessary work.
In more complex cases, it's also worth talking early to a suitable fiduciary partner. That's especially true if you're unsure which legal form fits, how to plan salary, dividends and taxes or whether voluntary VAT registration makes sense.
VAT also often causes problems. If you only notice late that the turnover threshold is becoming relevant, you have to correct invoices, prices and bookkeeping retrospectively. You can avoid this by considering the VAT question early on.
Organising your bookkeeping sensibly from the start
Many founders only deal with bookkeeping when the first tax return or the annual accounts are due. That often leads to unnecessary work.
Digital bookkeeping helps you record and organise receipts, invoices and bank transactions on an ongoing basis. That way you keep track of income, expenses and outstanding receivables.
The biggest benefit isn't the automation itself, but the fact that financial information is available sooner. If you keep an eye on your figures all the time, you can better assess developments in turnover, costs and liquidity.
Whatever software you use: the earlier your bookkeeping is properly organised, the easier topics such as taxes, VAT, annual accounts or working with fiduciary partners become later.
Conclusion
Starting a company in Switzerland is very manageable if the most important decisions are made properly and early. The legal form, liability, commercial register, VAT, AHV, taxes and bookkeeping are particularly important.
The sole proprietorship suits a simple start with little administrative effort, but comes with personal liability. The GmbH offers more structure and a separation between private and business assets. The AG is particularly interesting for startups, investors and growth-oriented companies.
What matters is not just that you start a company. What matters is that you start it in a way that lets your business run smoothly afterwards.
Good bookkeeping, clear processes and a realistic view of taxes and obligations create exactly that foundation.
FAQ: starting a company in Switzerland
How do you start a company in Switzerland?
You start a company in Switzerland by choosing a legal form, checking the company name, clarifying whether you must register in the commercial register, registering with the AHV or the relevant social insurance schemes, checking whether you are liable for VAT and setting up your bookkeeping. For a GmbH or AG, articles of association, payment of the capital, a public deed and the commercial register entry come on top.
Which legal form is best for founders in Switzerland?
That depends on risk, capital requirements, growth and ownership structure. A sole proprietorship is simple and inexpensive, but is mainly suitable for individuals with a manageable risk. A GmbH is a good fit for SMEs and small teams. An AG is particularly suitable for growth-oriented startups, investors and equity participation models.
How much does it cost to start a company in Switzerland?
The costs depend on the legal form. A sole proprietorship usually involves low formation costs and needs no minimum capital. A GmbH requires at least CHF 20,000 in share capital. An AG requires at least CHF 100,000 in share capital. On top of that, there may be costs for the notary, the commercial register, advice and formation platforms.
Does a sole proprietorship need a commercial register entry?
A sole proprietorship must be entered in the commercial register in particular when it runs a commercial business and annual turnover reaches CHF 100,000. A voluntary entry can also make sense earlier, though.
When does a company in Switzerland become liable for VAT?
A company must check whether it is liable for VAT when it reaches an annual turnover of CHF 100,000 from taxable supplies or is expected to reach it within twelve months. If it is liable for VAT, invoices, bookkeeping and VAT returns must be adjusted accordingly.
Which is better: sole proprietorship or GmbH?
A sole proprietorship is simpler and cheaper, but comes with personal liability. A GmbH takes more effort and requires CHF 20,000 in share capital, but separates private and business assets more clearly. For individuals with low risk, a sole proprietorship can be the right fit. For more professional structures, teams or higher risks, a GmbH often makes more sense.
Do I have to register with the AHV when I become self-employed?
Yes. Anyone who works self-employed in Switzerland must register the activity with the responsible compensation office. The compensation office checks whether the activity is actually recognised as self-employment.
Do I need bookkeeping straight away?
Yes. At the latest once your first business income, expenses, invoices or receipts arise, you need proper bookkeeping. It helps not only with taxes and obligations, but also with keeping track of liquidity, open invoices and how your business is developing.