What to Consider When Moving Your Company to Switzerland

There are many reasons why you may want to move your business to another country, and Switzerland has long been an attractive choice. Switzerland is an international financial hub known for its business-friendly environment, low taxes, and high quality of life, along with a host of other advantages for companies looking to relocate.

This article covers the key reasons for choosing Switzerland, the difference between relocating, opening a branch, and establishing a subsidiary, and the legal, tax, and residency factors to consider before making the move.

The world of business is full of surprises, both good and bad. Whether you are looking to move your business due to some unexpected obstacles in your home country, or to take advantage of new opportunities elsewhere, there could be plenty of good reasons for doing so. Some natural reasons to relocate your business to another country include:

1. Market access: You are looking to access new markets where you feel your company will be more profitable.
2. Tax incentives: Some countries, such as Switzerland, offer beneficial tax incentives to attract foreign companies. You may be able to greatly optimise your tax position by relocating your company to a new country.
3. Regulatory environment: Corporate and tax regulations are always shifting. You may run into difficulties operating your business in your current country due to a change in legislature and be looking for a more favourable regulatory environment elsewhere.
4. Cost savings: If you are finding it increasingly costly to operate your business in your home country, you may benefit from relocating to a country with lower operational costs such as cheaper labour, real estate, and equipment.
5. Political stability: Unfortunately, political instability and upheavals are all too common, and this can be a major cause for businesses to relocate to a nation with a more stable political system and economic environment, something which Switzerland offers.
6. Quality of life: Last, but certainly not least, you may simply be looking to relocate to a new country yourself for a higher quality of life. In such a situation, it usually makes sense to relocate your business too!

When we talk about “moving your company” to Switzerland, it actually involves forming an entirely new corporate entity. Switzerland has its own corporate regulations and types of registered entities, so it is generally not possible to just transfer the registered location of a company from abroad to Switzerland.

Practically, what this entails is as follows:

• When relocating your company to Switzerland, you would typically establish a new legal entity in Switzerland and transfer your existing assets, operations, and/or employees from your previous company to this new entity. Note that changing the location of your company can result in significant upheavals, so it is common that most of your employees would not make the move. You may also need to make significant changes to your operations and management structure.
• The new Swiss entity would be subject to Swiss laws and regulations, and it would become the legal entity through which your company operates in Switzerland.
• This process involves creating a new legal structure under Swiss law, which is likely to be similar to the structure of your existing company but adapted to comply with Swiss regulations and requirements. For example, if your existing business is operating as a limited liability company (LLC) in the U.S., it might make most sense to incorporate a Swiss GmbH to relocate the company to Switzerland. The new entity would have its own registration, governance, and compliance obligations in Switzerland. This includes securing a registered domicile address in Switzerland for your new entity.

So, you’re pretty sure that Switzerland is the ideal location for relocating your business. However, before making the move, you need to consider the following important factors:

Legal considerations

It is essential to have a thorough understanding of Swiss laws and regulations related to company incorporation, employment contracts, withholding tax, import duties, and intellectual property rights, among others. This is where it helps to have the guidance and support of an expert in Swiss company corporation, such as Nexova AG.

Taxation of businesses in Switzerland

Switzerland has an overall attractive tax regime, but it's important to understand its finer nuances. Switzerland has a multi-tiered tax system which includes federal, cantonal, and municipal taxes. Research the tax implications for your specific industry and business structure in the different cantons you are considering so as to ensure compliance and minimise tax liabilities.

Swiss residence permit

Depending on your current nationality, you may need to obtain a residence permit or have special permission to open a company in Switzerland. Typically, European Union and European Free Trade Area (EU/EFTA) nationals can move to Switzerland and set up a company almost as easily as Swiss nationals, as they benefit from the Agreement on the Free Movement of Persons.

However, foreign nationals moving to Switzerland from a country outside of the EU/EFTA are categorised as “third-country” nationals, which results in stricter requirements and visa restrictions for setting up a company in Switzerland. In this case, you need to either have a valid C residence permit or be married to a Swiss resident or citizen. You will also need to fulfil other requirements such as being able to demonstrate that your business will have a lasting positive impact on the Swiss labour market, along with obtaining the necessary permission from your local cantonal authority to open a company.

If you do not meet these residency requirements, Nexova's nominee director service can help fulfil the requirement for a Swiss-resident representative in your company.

Refer to our dedicated article for more information on setting up a company in Switzerland as a foreigner.

Choosing a legal form

The choice of legal form is one of the most important decisions you will make when moving your business to Switzerland. The legal form of a business impacts everything from governance and liability to capital requirements and tax obligations. Depending on the size and nature of your business, you would typically choose one of the following company forms in Switzerland:

• Sole proprietorship
• Limited liability company (GmbH)
• Stock corporation (AG)
• Other entities such as a limited or general partnership, foundation, cooperative, etc.

For a more detailed description of each of these legal forms and how to choose the right one for your business, refer to our comprehensive comparison of legal forms in Switzerland. For a step-by-step overview of the full process, see our checklist for starting a business in Switzerland.

Choosing a Swiss canton

Each canton within Switzerland offers a different business environment, as well as sets its own cantonal tax rates and incentives. For example, the canton of Zug is a favourite choice for tech and financial startups in Switzerland due to its low corporate taxes, favourable regulations, and openness to innovation.

With the help of a professional advisor, choose a canton that aligns with your company’s requirements and aims. Read our more detailed discussion on which is the best canton for founding a company in Switzerland.