Question 1

How much capital do I really need?

Accepted Answer

A sole proprietorship has no minimum capital requirement – you can practically start from zero. An LLC needs CHF 20,000 in share capital, which must be paid in full; a corporation needs CHF 100,000 in share capital, of which at least CHF 50,000 must be paid in. This capital isn't lost money: after the commercial register entry, it's available to the company as working capital. On top come one-off formation costs of around CHF 700 (sole proprietorship) to about CHF 2,000–2,500 (LLC/corporation with notary, commercial register and capital deposit account) – noticeably different depending on the canton.

Question 2

From when am I liable for VAT?

Accepted Answer

The obligation begins as soon as your worldwide turnover from taxable supplies reaches CHF 100,000 per year. What counts is the forecast for the coming twelve months, not just the annual financial statements. If you're below that, you can register voluntarily – this is worthwhile especially if you're making large investments or mainly serve business customers, because then you can reclaim input tax. For smaller businesses, the net tax rate method simplifies accounting considerably.

Question 3

Do I have to register in the commercial register?

Accepted Answer

An LLC and a corporation only come into existence with the entry – it is mandatory. A sole proprietorship only has to register once annual turnover reaches CHF 100,000. A voluntary entry is possible at any time and often makes sense: it protects the company name, appears more credible to customers and banks, and is a prerequisite for certain licences. Note: once registered, a sole proprietorship is also subject to bankruptcy proceedings instead of debt collection by seizure.

Question 4

How long does forming a company take?

Accepted Answer

With good preparation, it usually takes two to three weeks from document review to the commercial register entry. The process: draft articles of association and formation documents, open a capital deposit account at the bank, pay in the capital, notarisation by a notary, registration with the commercial register office. The pace is mainly determined by the bank and the cantonal commercial register office – some cantons publish within a few days, others take two weeks. A sole proprietorship without registration is practically ready to start immediately.

Question 5

What changes regarding social insurance?

Accepted Answer

As a self-employed person (sole proprietorship), you register with the AHV compensation office and pay AHV/AI/EO contributions on your income – there's no unemployment insurance for you, and pillar 2 is voluntary. As the owner of an LLC or corporation, on the other hand, you are an employee of your own company: you are compulsorily insured with AHV and, from the BVG minimum salary, also with the pension fund, and generally insured against unemployment. This difference is one of the most important factors in choosing a legal structure.

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