A sole proprietorship in Switzerland is straightforward to set up and involves minimal legal requirements, making it an attractive option for individual entrepreneurs. However, the owner has unlimited personal liability for business debts, meaning personal assets are at risk if the business encounters financial difficulties.
To open a sole proprietorship in Switzerland, you need to start by clearly defining your business idea and conducting thorough market research to understand the market and competition. Choose a business name that includes your surname, ensuring it is unique and not misleading. You must register your business with the local municipality, and if your annual turnover exceeds CHF 100,000, also register with the Swiss Commercial Register. For turnovers below this threshold, registration with the Commercial Register is optional but recommended for credibility.
Next, open a business bank account to manage your finances effectively. Register with the AHV office for social security, arrange for mandatory accident insurance, and ensure you have health insurance coverage, as it is mandatory in Switzerland. Although optional for sole proprietors, you might consider contributing to a private pension fund. If your annual turnover is expected to exceed CHF 100,000, register for VAT, though you can choose to register voluntarily if your turnover is lower. In accordance with the rules of the Swiss Code of Obligations Art. 957 et seq, a Sole proprietorship which generates a turnover of CHF 500'000 or more has to keep and present accounts within the rules.
Depending on your business activity, you may need specific permits or licenses, so check with local authorities for any industry-specific requirements. Set up proper accounting and bookkeeping practices, and consider hiring an accountant or using accounting software to manage your finances. If you plan to hire employees, ensure compliance with Swiss labor laws regarding employment contracts, working conditions, and social insurance contributions.
Develop a marketing strategy to promote your business, utilising both online and offline channels to reach your target audience. Ensure ongoing compliance by filing annual tax returns and keeping up with any changes in laws and regulations that may affect your business. With careful planning and adherence to legal requirements, opening a sole proprietorship in Switzerland can be a straightforward and efficient process.