Switzerland is one of the stable and strong economies in the world by offering developed and attractive investment environment for the entrepreneurs. Establishing a company in Switzerland allows investors to benefit from its strategic location, political neutrality, and competitive tax system.
Country Overview
Official Name: Swiss Confederation (Confoederatio Helvetica)
Capital: Bern
Population: Approximately 8.7 million (as of 2024)
Official Languages: German, French, Italian, Romansh
Religion: Christianity (mainly Roman Catholic and Protestant), with a growing secular population
Climate: Temperate climate with four distinct seasons; alpine regions have cold winters and mild summers
Time Zone: UTC+01:00 (UTC+02:00 during daylight saving time)
Phone Code: +41
Currency: Swiss Franc (CHF)
Types of Companies
| Company Type | Key Features |
|---|---|
| Swiss Limited Liability Company (GmbH) | – Minimum 1 shareholder (individual or legal entity) – Minimum share capital: 20,000 CHF – Foreigners can be shareholders – At least one director must be Swiss resident – Liability limited to invested capital – Popular for SMEs and foreign investors due to simple setup and limited liability |
| Swiss Joint Stock Company (AG) | – Minimum 1 shareholder – Minimum share capital: 100,000 CHF – Majority of directors must be Swiss or EU citizens – Foreigners can be shareholders – Liability limited to unpaid shares – Preferred by larger companies and corporations |
| Sole Proprietorship | – Owned by one individual – Unlimited liability – Must register with Chamber of Commerce if annual sales exceed 100,000 CHF – Easy formation and low setup costs – Ideal for individual entrepreneurs |
Taxation in Switzerland
Corporate Income Tax in Switzerland
In Switzerland, corporate tax is levied at three levels: federal, cantonal, and municipal.
- Federal Corporate Tax: A flat rate of 8.5% is applied to net (after-tax) profits.
- Total Tax Burden: Including cantonal and municipal rates, the total corporate tax rate ranges from 11.9% to 20.5% depending on the canton in which the company is registered.
- 2025 Average Effective Rate: The average total corporate tax rate in Switzerland is approximately 14.4%.
Note: Switzerland offers tax planning tools such as “Patent Box,” R&D incentives, and interest rate reductions to increase international competitiveness. As a result, the effective tax rate in some cantons may be even lower.
VAT Rates in Switzerland
Switzerland has some of the lowest VAT rates in Europe. The revised rates, effective as of January 1, 2024, are as follows:
| VAT Type | Rate | Description |
|---|---|---|
| Standard Rate | 8.1% | Applicable to most goods and services |
| Reduced Rate | 2.6% | For essential goods such as food, books, medicine |
| Special Rate | 3.8% | For accommodation and hotel services |
Switzerland presents a highly attractive environment for both local and foreign entrepreneurs. Its flexible tax regime, investment-friendly policies, and low VAT rates make it one of the most business-friendly countries in Europe. Depending on your company’s legal form, industry, and location, your overall tax liability can be significantly optimized. For more information or tailored support on establishing a company in Switzerland, please contact us.
