Sole proprietorship is in practice the simplest way to set up a company in Switzerland. Basically, a sole proprietorship means an individual conducting the business under his own family name and under his full responsibility. There is no legal distinction between the business and owner is a sole proprietorship.
There is no need to provide minimum capital and it is not necessary to submit notarized documents in order to create the company. If the turnover is less than CHF 100’000.- per year, 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).
The individual willing to start a sole proprietorship must have a working-permit and a residence permit in Switzerland (and this even if a domicile in Switzerland is not mandatory).
To sum up, an expatriate willing to start a sole proprietorship must:
- obtain a working-permit (see work permits);
- 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.-).