Sole proprietorship (“raison individuelle”) is in practice the simplest way to set up a company in Switzerland. Basically, a sole proprietorship means an individual conducting a business under his own family name and under his full responsibility. There is no legal distinction between the business and the owner.
There is no need to provide a minimum capital and it is not necessary to submit notarized documents to create the company. If the turnover is less than CHF 100’000.- per year, the inscription to the Commercial Register and registration for VAT is not mandatory. Moreover, there are no legal audit or disclosure requirements.
The main disadvantages of the sole proprietorship are the unlimited liability of the owner and the limited possibility to raise capital.
Regarding social insurances, the owner of the sole proprietorship conducts his business under a self-employed status. In order to obtain such status, the entrepreneur must register with the competent authorities (in Geneva, Office cantonal des Assurances Sociales or OCAS).
The individual willing to start a sole proprietorship must hold a Swiss permit (and this even if a domicile in Switzerland is not mandatory).
To sum up, if you are planning to start a sole proprietorship, you must:
• hold or obtain a valid permit;
• register to the competent authorities as a self-employed individual;
• register to the Commercial Register (if the annual turnover is more than CHF 100’000.-);
• register for VAT (if the annual turnover is more than CHF 100’000.-).
We can advise you on how to start a business in Switzerland, contact us !