Setting up a business in Switzerland for a French cross-border worker

Why set up a business in Switzerland if you’re a cross-border worker?

Moving to Geneva, or elsewhere in Switzerland, to set up a business… Why start a business in Switzerland if you’re French? Here are some of the advantages Switzerland offers when it comes to setting up a business:

• Favourable tax regime: Switzerland offers lower corporate tax rates than France, although these vary from canton to canton.
• Although the cost of living is high, Switzerland is an economically stable country with promising economic prospects for businesses, and therefore for entrepreneurs wishing to establish a long-term presence there. Its banking system is recognised worldwide, offering high-quality services to support businesses and entrepreneurs.
• Genuine administrative flexibility: in Switzerland, the procedures for setting up a business are streamlined, with relatively short processing times.

These advantages make Switzerland a strategic location for entrepreneurs, particularly cross-border workers, who can benefit from Switzerland’s proximity to France.

What are the tax benefits for cross-border workers?

For an entrepreneur, setting up a business in Switzerland offers numerous tax advantages. The rate of corporation tax is lower than in France, although this varies by canton, as each canton is free to set its own rate to attract businesses according to its needs. Social security contributions are also lower, with reduced contributions for employers and the self-employed.

For information, the corporate tax rate is approximately 19% in Zurich, 21% in the canton of Bern, 14% in the cantons of Geneva and Vaud, and 17% in the canton of Valais.

In Switzerland, certain costs or expenses can be deducted from your business income. This applies to business travel and business meals, but also, in some cases, to rent, equipment and professional insurance. This, in turn, reduces the taxable income base.

Key steps for setting up your business in Switzerland

You’ve made up your mind: you want to set up your own business in Switzerland. But how do you go about it?

Choosing the type of company: limited liability company (LLC), public limited company (PLC) or sole trader?

The first step before setting up a business in Switzerland? Choosing the right legal structure!

Switzerland offers several types of business structure:

• A sole proprietorship (individual business), with no minimum capital requirement and optional registration in the commercial register. It is ideal for the self-employed, craftspeople, small businesses, and so on.
• A general partnership (SNC), which has no minimum capital requirement but must be registered in the commercial register. This is ideal for businesses that are not sole traders, such as those with several founders.
• A limited liability company (Sàrl). It requires a minimum share capital of 20,000 Swiss francs. Registration with the Commercial Register is mandatory. It is an ideal structure for small and medium-sized enterprises, start-ups, etc.
• The SA, or public limited company. It requires a share capital of 100,000 Swiss francs (with at least 50% paid up: this means that, even if a share capital of 100,000 Swiss francs is declared, it is possible to deposit only half of this amount into the company’s bank account initially). Registration in the Commercial Register is mandatory. This structure is generally best suited to large companies, companies with investors, or businesses wishing to raise capital.
• A cooperative company, with no minimum capital requirement, but which must be registered in the Swiss Commercial Register. It is particularly suited to collective or community-based projects, associations of entrepreneurs, or collective initiatives by residents of a municipality, for example.

Once you have chosen your business structure, choose a name for your company. If it is a sole proprietorship, the name must include your surname. For a limited liability company (Sàrl) or public limited company (SA), any name is permitted, provided it is available in the Swiss Commercial Register (with which you must register if you are setting up a Sàrl or an SA). Consult a notary in Switzerland to draw up the articles of association and officially incorporate your company in Switzerland. If it is a sole proprietorship, you must obtain a certificate of self-employment (AVS or SUVA). Finally, open a bank account in Switzerland specifically for your business.

Writing a business plan tailored to the Swiss market

To successfully launch your business venture in Switzerland, you must bear in mind that the Swiss market differs from the French market in many respects. Draw up a business plan tailored to the Swiss market: analyse the local market, the competition in your sector, your positioning within your target market and its specific needs… Carefully estimate the start-up costs of your business and your potential revenue. When launching your business, do not hesitate to seek advice from experts in the Swiss market before drafting your business plan.

Opening a business bank account in Switzerland

Opening a bank account in Switzerland is essential for running your business successfully. But which bank and which package should you choose? Here, the choice of bank will depend on several factors: do you prefer a local bank, which is closer to home and more responsive, or an international bank offering extensive services abroad? If your business operates internationally, or even in France, this could be a wise choice. Also consider management fees, digital services and the support on offer: a freelancer will not have the same needs or resources as an entrepreneur setting up a limited liability company (Sàrl) or a public limited company (SA) with partners. These legal structures require a minimum share capital to be paid up when the account is opened.

VAT registration and other tax formalities

What about VAT? Good to know: VAT registration is a mandatory requirement for Swiss companies with an annual turnover exceeding 100,000 Swiss francs. They are therefore required to collect VAT on your sales and pay it to the Swiss tax authorities. There are also other tax obligations to fulfil in Switzerland: filing an annual tax return and paying social security contributions for the company’s employees.

Registering your business in Switzerland: best practices and pitfalls to avoid

Which is the best canton in which to register a business in Switzerland? As tax laws vary from canton to canton, location is of significant importance when it comes to a company’s tax situation. Each Swiss canton has its own tax and regulatory advantages, which can have a significant impact on your company’s profitability. However, if you are French or a cross-border worker, choosing a canton close to the French border may be a wise move, such as the cantons of Geneva, Jura or Valais.

The costs and timeframes involved in setting up a business in Switzerland

How much does it cost to set up a business in Switzerland? You should expect to pay around 1,260 Swiss francs to formalise the incorporation of a GmbH or AG in Switzerland (this covers notary fees, registration with the Commercial Register, and the opening of an escrow account). Allow around two to three weeks to complete all these procedures.

Tax optimisation: tips for French cross-border workers

Did you know? Entrepreneurs and cross-border workers can optimise their tax situation by taking advantage of the tax treaties in force between France and Switzerland. This helps to reduce the risk of double taxation. As a result, income from Swiss sources may be partially exempt from tax in France.

Insuring and financing your business in Switzerland

Are you setting up a business in Switzerland? Make sure you take out adequate insurance. Please note that businesses are required to take out compulsory insurance, such as occupational accident insurance and public liability insurance. Optional insurance policies can be added to cover specific needs, depending on your sector of activity: fire insurance, cyber risk insurance, insurance for company vehicles, business interruption insurance, or insurance for property and equipment.

Mistakes to avoid when setting up a business in Switzerland

So, you’ve decided to set up your business in Switzerland: here are a few tips and things to avoid.

• Be careful not to underestimate the costs of setting up a business across the border. Yes, Switzerland offers a favourable business environment… However, bear in mind that the costs of setting up and running a business may be higher than in France. It is essential to budget carefully for start-up capital and to find out about the administrative, legal and tax costs associated with setting up a business in Switzerland.
• Avoid choosing the wrong canton: as you will have realised, in Switzerland, each canton offers its own tax and regulatory advantages. It is important to compare the tax regimes of each one.
• If you are unfamiliar with Switzerland, seek the advice of specialists. Setting up a business in Switzerland often involves complex legal and tax procedures. Working with local experts (advisors, bankers, solicitors or accountants) can help you avoid many pitfalls.
• Underestimating local competition: bear in mind that Switzerland remains a highly competitive market, where competition is fierce in many sectors (finance, banking, industry, tech) … Refine your business plan and research the competition in your sector thoroughly.
• Don’t forget about currency conversion: are you a French entrepreneur based in Switzerland? As you know, the currency used is the Swiss franc (CHF), which means you’ll face exchange rate fluctuations if you deal with international clients or suppliers. Failing to take these fluctuations into account can harm your profitability. It is therefore essential to use a trusted partner to convert your Swiss francs into euros.