Offering a legally, politically and economically stable framework, Switzerland an attractive place for foreigners to launch a fruitful business. Its geographical location, in the very middle of the EU and its strong economy reinforce this position.
Regarding the legal framework, launching a business in Switzerland is relatively easy and accessible for Permit C holders (ie. Swiss permanent residents). However, when it comes to foreigners, the rules tend to be stricter. Moreover, these rules vary depending on the country of origin of the to-be-founder. Indeed, the Swiss system is said to be “dual”, meaning two regimes coexist and apply alternatively, whether the foreigner is an EU/EFTA national or a non EU/EFTA one.
What is the legal regime for EU/EFTA nationals?
EU/EFTA citizens (with the exception of Croatians) can be self-employed in Switzerland without holding a permanent residence permit, based on the Agreement of the Free Movement of Persons. It’s sufficient for them to fill an application for a B permit (valid for 5 years) and present a business plan. For cross-border workers, a cross-border work permit is sufficient.
Swiss law also requires the planned business activities to be declared and proven through, for instance, a business plan, a valid VAT number, a professional register entry, the registration at the social insurances as self-employed entrepreneur etc.
What is the legal regime for non EU/EFTA nationals?
Non EU/EFTA citizens must hold a valid C Permit, alternatively, be a Swiss citizen in order to be able to set themselves as self-employed.
Non EU/EFTA citizens not meeting these requirements must submit an application to the respective cantonal authorities. In that perspective, they have to prove that their future company will have a “lasting positive effect or influence on the Swiss labor market”, mainly meaning that the company “contributes to the industry-specific diversification of the regional economy, preserves or creates several jobs for local staff, makes substantial investments and generates new orders for the Swiss economy”[1]. The business plan plays a key role in that overall assessment and shall carefully be drafted. Following that procedure, they might receive a short-term authorization to work or reside in Switzerland (L Permit) or a residence permit (B Permit), both subject to annual quotas.
Last but not least, foreign entrepreneurs shall also meet the Swiss labor market requirements and be qualified to run the proposed business.
Common requirements
The following step is to select the best legal structure for a future business (details can be found on our website).
Each new entrepreneur, EU/EFTA or non EU/EFTA citizens, must also be aware of the fact that some activities are regulated and subject to authorization under Swiss law; in that case, specific qualifications might be required in order to be able to exercise them.
Insurance, taxes and other considerations shall also be analyzed very carefully in order to fully comply with Swiss rules.
[1] Setting up a company as a citizen of a third states, SME Portal https://www.kmu.admin.ch/kmu/en/home/concrete-know-how/setting-up-sme/starting-business/foreign-national/citizen-of-third-state.html
06/01/20 - Sophia Ouadouri, trainee at Legal Expat Geneva
