How to Establish a Swiss Entity: A Practical Setup Guide
Switzerland stands for stability, reliable banks, and strong business credibility. It’s exactly what you want in a new market. With the right entity setup, you can hire staff and build trust with clients and partners.
A Swiss entity is a company registered in Switzerland that can sign contracts, run payroll, and pay taxes under Swiss law.
This guide walks you through setting up a Swiss entity, covering company types, costs, taxes, and payroll. If you want to hire sooner, we also explain how an EOR in Switzerland lets you start without forming a company first.
Opening an Entity in Switzerland
Many companies set up a Swiss entity to gain legal presence in Switzerland, open corporate bank accounts, pay employees through Swiss payroll, build business credibility with clients and banks, and manage risk within a Swiss legal framework.
This structure lets you invoice locally, hire staff on Swiss contracts, and show commitment to the market. It also makes tasks like renting an office or registering for social security far smoother than operating from abroad.
Can a foreigner open a company in Switzerland? Yes. Foreign founders can open a Swiss GmbH or AG. A Swiss-resident director or representative may be required based on the canton and legal form.
You can appoint a local board member or use a professional director service. If you plan to hire before setup is complete, you can pick an EOR path first, then switch to your own entity later.
How to Set Up a Swiss Legal Entity
We’ve prepared the practical steps for opening an entity, from choosing a company type to full registration. This will help you get the overall idea of what you need before you start the process.
Choose the Right Type: GmbH, AG, Branch/Subsidiary
GmbH (Sàrl) is a private limited company. Owners (quota holders) are listed in the commercial register. Common for SMEs and service firms. Management can be one or more managers. At least one director or authorized signatory must live in Switzerland.
AG (SA) is a public limited company. Shares are easier to transfer than GmbH quotas. Shareholders are not named in the public register, but the board is public. Often used by larger firms or investor-backed groups. A board of directors is required, with at least one member or authorized signatory resident in Switzerland.
A Branch/Subsidiary is an extension of a foreign company. It is not a separate legal entity and has no separate share capital. The parent company is liable for the branch’s obligations. The branch must register in the Swiss commercial register and name a local branch manager with signing rights, usually resident in Switzerland.
Here’s a quick comparison of the most common structures:
Registration Process: Authorities, Documents, and Timeline
- Choose a Name and Legal Form
Reserve a company name that meets Swiss naming rules. Confirm availability with the commercial registry (Handelsregister/Registre du commerce). - Prepare the Incorporation File
Draft the articles of association. Collect identification and address details for founders and directors. Arrange a Swiss-resident director or representative if required. - Open a Capital Payment Account
Open a Swiss bank capital deposit account. Deposit the paid-in share capital. The bank issues a capital deposit confirmation. - Notarize the Incorporation
Sign the deed of incorporation in front of a Swiss notary. Submit articles, capital confirmation, and director details. - File with the Commercial Registry
The notary or your advisor files the documents with the cantonal registry. Once approved, your entity is listed and gets an official UID number. - Register for Taxes and Social Security
Register for VAT if your turnover requires it. Sign up with social insurance (AHV/AVS), accident insurance (SUVA), and pension (BVG/LPP) once you hire staff. - Set up Payroll and Insurances
Set up payroll software or a provider. Put mandatory insurance in place. If you will sponsor work permits, prepare for the labor market and canton processes.
Typical timeline runs 2-6 weeks from document prep to registry approval. Add time for bank onboarding, which can vary widely by bank and risk review.
Documents often include articles of association, deed of incorporation, shareholder and director IDs, proof of paid-in capital, proof of registered office, and declarations on beneficial owners.
Corporate Accounts and Capital Requirements
Swiss banks run strict KYC and AML checks. Expect a structured review of your ownership chain, source of funds, business model, and expected payment flows. A capital payment account is used to deposit share capital before registration. After the entity is listed in the commercial registry, the account converts to a standard corporate account.
Requirements differ by bank and entity type. Some banks ask for in-person meetings. Others accept remote onboarding for low-risk profiles. An AG may find share transfers simpler later, though a GmbH is often fine for smaller teams. Provide a clear business plan and projected volumes. This speeds up the processing of questions on transactions and cross-border flows.
Fees vary. Many banks charge a monthly account fee, plus charges for international payments. If your business needs multi-currency accounts, ask about FX margins and same-day settlement cutoffs. If opening a bank account proves slow, consider a payment service provider for interim use, then move payroll to the Swiss account once ready.
Taxes, Payroll, and Social Security
Swiss payroll compliance requires monthly salary processing under Swiss law. Employers register and pay social security contributions in Switzerland for AHV/AVS, unemployment insurance, accident insurance (SUVA), and pension (BVG/LPP) when thresholds apply. Many cantons withhold income tax at source for foreign employees without a C permit. Others expect employees to file later and pay directly.
Accounting and taxes come on a fixed cycle. File corporate income tax returns based on your canton and federal rules. Register for VAT if your global group turnover meets the Swiss VAT threshold or if Swiss turnover passes the local threshold.
Keep orderly books and maintain a share register for GmbH and AG. Renew insurance each year and review pension plans if your team grows. If you sponsor permits, track permit dates and renewals. If you lease staff to clients, confirm SECO labor leasing rules apply and secure the right license.
Practical Considerations and Challenges
Costs of Setup and Maintenance
Expect one-time setup costs for notary, legal review, and registry filings. Ranges often sit around CHF 3,000–10,000 for a straightforward GmbH or AG formation, rising with complex shareholder structures or cross-border board compositions. Bank account opening can add fees depending on the provider and package.
Recurring costs include accounting, payroll service, tax filings, audit if required, and pension plan administration. Many SMEs budget CHF 5,000–20,000 per year for these admin tasks. Add employer social contributions and accident insurance premiums to your payroll costs. Office space, software, and local advisors will add to the yearly run rate.
Compliance and Reporting
Swiss rules are clear, yet detailed. Payroll has monthly steps. Social charges and tax at source need timely remittance. VAT filings can be quarterly or semi-annual, based on turnover and method. Annual financial statements must be prepared. Some entities fall under audit criteria once they pass certain size thresholds.
Many canton portals and notices run in German, French, or Italian. English support varies by authority. A local payroll partner or accountant saves time here. Create a calendar of deadlines and set reminders in your payroll and accounting tools. That simple habit prevents late fees.
Time and Resource Investment
Plan for a few weeks to get the entity registered and a bank account ready. The first payroll cycle will take more time since registrations and insurance must be in place. Later cycles run smoother once templates and approvals are set.
Most foreign founders bring in a Swiss fiduciary for bookkeeping and tax. A payroll provider helps with AHV, SUVA, BVG, and tax at source. If you plan to hire non-EU citizens, work permits add lead time and paperwork. This is all doable with a clear plan and the right helpers.
Alternative Option: What an EOR Does in Switzerland
An Employer of Record (EOR) is a Swiss company that becomes the legal employer of your people in Switzerland. You direct the day-to-day work. The EOR runs payroll, signs compliant contracts, withholds taxes, and manages benefits under Swiss law. It also takes care of AHV/AVS, BVG/LPP, SUVA, sick leave insurance, if selected, and reporting to local authorities.
How EOR Enables Local Hiring Without Full Entity Setup
An EOR lets you hire in Switzerland without creating a separate legal entity. You skip notary visits, share capital, and bank onboarding. Setup is fast and predictable. Contracts run on Swiss employment laws, and payroll begins once the EOR completes registrations.
The total cost is known upfront, with a single invoice covering salary, employer charges, insurance, and the service fee. This route works well for market tests, pilot teams, or small headcounts, and then you can switch to your own entity later if the team grows.
What is the difference between an EOR and a subsidiary?
A subsidiary (GmbH or AG) is your own Swiss company. You handle everything: registration, bank accounts, payroll, taxes, social security, and insurance. You gain full control and long-term presence, though setup takes time and money.
An EOR is a third party that hires your staff on its payroll. You get Swiss legal employment and payroll right away with lower upfront costs. The trade-off is less structural control compared to owning your entity. Many firms start with an EOR to move fast, then open a subsidiary once headcount or revenue justifies the shift.
Hire Swiss Talent with EOR Services
Numeriq is a SECO-licensed Swiss EOR that helps you hire employees in Switzerland without forming a local company. We create compliant Swiss employment contracts, run payroll with accurate withholdings, manage AHV/AVS, BVG/LPP, SUVA, and handle tax at source where needed. Visa and work permit support is available for EU and non-EU staff.
Setups are quick. Contracts are signed electronically. Payroll runs on time with clear payslips and reporting. You receive a single invoice in CHF that shows the full cost of employment. Our advisors speak English, French, and German. We are happy to run cost simulations and timelines so you can pick the right path.
Final Words
A Swiss entity gives you legal presence, direct control, and strong business credibility with clients and banks. You run payroll in-house or with a provider, open local accounts, and build a long-term base in a stable market. It takes planning, share capital, and ongoing admin for payroll, taxes, and reporting.
An EOR is a practical route if you need to hire now or test the market first. You gain Swiss payroll, contracts, and benefits through a licensed local partner, without the time and capital required for company formation. Many teams start lean with an EOR, then move to a GmbH or AG once the team and revenue grow.
If you want a simple way to hire in Switzerland, speak with Numeriq. We can help you weigh both options and set up the path that fits your plans.
