Setting up a business in Switzerland: LLC, Ltd, or Sole Trader
Want to launch your business in Switzerland? Discover domiciliation rules, how to optimize the transfer of your share capital, and billing obligations (VAT and AHV) for small turnovers.
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- Setting up an LLC (GmbH/Sàrl) or a Ltd (AG/SA) in Switzerland requires minimum capital: CHF 20,000 fully paid in for an LLC, CHF 100,000 for a Ltd, of which at least CHF 50,000 must be paid in at incorporation.
- Partners can live abroad: a non-resident can hold all of the capital, but at least one person authorized to represent the company must be domiciled in Switzerland.
- The capital goes through a consignment account: it is paid into a blocked account at a Swiss bank, which issues the certificate the notary needs to found the company.
- You can also invoice without a company: as a sole trader, registration in the Commercial Register is not mandatory below CHF 100,000 of turnover, but your self-employed status must be recognized by the AHV compensation fund (contributions of around 10% of net profit).
- VAT: below CHF 100,000 a year of worldwide turnover from taxable services, VAT registration is not mandatory: invoices are issued without VAT, and the VAT paid on purchases cannot be recovered.
Table of Contents
- Can you invoice in your own name without setting up a company?
- Can a non-resident own an LLC (GmbH) or a Ltd (AG)?
- How do you pay the capital into the capital payment account?
- When does a young company have to charge VAT?
1. Can you invoice in your own name without setting up a company?
Many entrepreneurs wonder if it is absolutely mandatory to found a capital company (LLC or Ltd) to start issuing invoices. The answer is no. You can operate as a Sole Proprietorship (independent worker status).
The threshold for Commercial Register registration
One of the advantages of Switzerland lies in its initial administrative flexibility. If you carry out a commercial activity in your own name and your gross annual turnover is under 100,000 CHF, registration in the Commercial Register is not mandatory (although recommended to reassure business clients).
The real judge: The AHV Compensation Office
This is where many founders (especially foreigners) make a costly mistake. In Switzerland, you cannot just decide to issue invoices randomly. For your income to be legal and not considered undeclared work, you must have your independent status recognized by the AHV (OASI) compensation office of your canton.
The Swiss independent status is not a free choice; it is recognized a posteriori. The AHV office will analyze your real economic situation. To be recognized as independent, you must prove that:
- You act in your own name and on your own account.
- You bear the economic risk of the business (investments, equipment).
- You have several distinct clients (to avoid disguised employment).
Once recognized, you will have to pay your AHV social contributions (around 10% of your net profit) directly to the office.
2. Can a non-resident own an LLC (GmbH) or a Ltd (AG)?
Yes: a non-resident can hold the entire share capital, provided that a person domiciled in Switzerland can represent the company. If you want to protect your personal assets or welcome investors, setting up a Limited Liability Company (LLC/GmbH/Sàrl) or a Public Limited Company (Ltd/AG/SA) is essential.
One of Switzerland's greatest assets is its openness to international capital. It is not necessary to be of Swiss nationality, nor even to reside in Switzerland, to hold shares in a Swiss company. A foreign citizen residing abroad can perfectly hold the entire share capital.
The representation obligation (Management)
However, the Swiss Code of Obligations imposes a strict rule: the company must be able to be represented by a person domiciled in Switzerland.
- For an LLC (GmbH/Sàrl): this person must be a managing officer or a director domiciled in Switzerland (art. 814 para. 3 CO).
- For a Ltd (AG/SA): this person must be a member of the board of directors or a director domiciled in Switzerland (art. 718 para. 4 CO).
The solution for foreign founders: If you do not reside in Switzerland, you will need to use the services of a "fiduciary manager" or "fiduciary director". This is a Swiss resident mandated to legally represent you for an annual fee.
3. How do you pay the capital into the capital payment account?
To register your company in the Commercial Register, you must prove that the share capital has been paid in. The legal minimum amount is 20,000 CHF for an LLC (fully paid in), and 100,000 CHF for a Ltd (with at least 50,000 CHF paid in at incorporation).
You cannot pay this money directly to a notary. You must open a "capital payment account" (consignment account) with a Swiss bank. Once the funds are received, the bank issues a "deposit certificate," an essential document for the notary to found the company.
The banking trap of transferring from abroad
If you are a non-resident entrepreneur, your starting capital is probably in Euros or another foreign currency in your personal account abroad. Making a direct international transfer to the Swiss consignment account is a costly mistake.
The optimized method (The ibani reflex)
To limit the cost of currency conversion on your seed capital, convert your currency into Swiss francs at a rate close to the interbank rate before the funds arrive in the consignment account. You can simulate the conversion of your capital to precisely estimate the amount in CHF to pay in.
- Open an ibani account: We provide you with a Swiss IBAN in your name.
- Transfer your funds to ibani: We convert your funds at the interbank rate applying a transparent margin, tiered from 0.40% to 0.15% depending on the amount.
- Transfer the exact CHF: Transfer the precise amount in CHF to your future company's consignment account. The notary receives the certificate, and you haven't enriched the bank on the exchange rate.
4. When does a young company have to charge VAT?
Once your independent status is validated or your company is registered, you will issue your first invoices. In Switzerland, the Value Added Tax (VAT) legislation is particularly favorable to startups.
The mandatory registration threshold
A Swiss company (LLC, Ltd, or Sole Proprietorship) is not obligatorily subject to Swiss VAT if its global turnover from taxable services is under 100,000 CHF per year.
How to invoice your clients under this threshold?
If you do not reach this level and have not requested voluntary registration:
- Your invoices (for individuals or businesses) must be issued as a Net amount (without adding VAT).
- You are not allowed to show VAT on them (art. 27 VAT Act). The law does not require any particular wording: you may state "Not subject to VAT" to make things clear for your clients.
- In return, you will not be able to deduct (recover) the VAT on your company's purchases (computer, furniture, services).
Voluntary registration: a strategic choice
Even if your turnover is very low in the first year, it is sometimes strategic to register voluntarily for VAT upon creation. This is particularly true if you make significant initial investments (purchase of machines, stock) because it will allow you to recover the VAT paid on these purchases (input tax). Talk to your accountant!
In summary: launching your business
| Criterion | Sole proprietorship | LLC (GmbH) | Ltd (AG) |
|---|---|---|---|
| Minimum capital | None | 20,000 CHF, fully paid up | 100,000 CHF, of which at least 50,000 CHF paid up |
| Entry in the commercial register | Mandatory from 100,000 CHF of annual turnover | Mandatory | Mandatory |
| Person domiciled in Switzerland | Not required by the CO | Managing officer or director (art. 814 para. 3 CO) | Board member or director (art. 718 para. 4 CO) |
| Capital payment account | No | Yes, for capital paid in cash | Yes, for capital paid in cash |
| Mandatory VAT registration | From 100,000 CHF a year of worldwide turnover from taxable supplies | ||
Launching a business in Switzerland takes preparation. Make sure you:
- Validate your status (self-employed via the AHV, or setting up an LLC/Ltd via the commercial register).
- Appoint a person domiciled in Switzerland who is authorized to represent the company (managing officer, board member or director) if you set up a company and live abroad.
- Optimize the transfer of your share capital through a currency specialist such as ibani to limit the exchange cost on your capital.
- Apply the VAT exemption correctly (below 100,000 CHF) on your first invoices.
Frequently Asked Questions (Company Creation)
Official sources
- Code of Obligations (CO), art. 621 and 632 (capital of a company limited by shares), art. 773 and 777c (capital of a limited liability company) — Fedlex, accessed 29 September 2026
- Code of Obligations (CO), art. 633 (deposit of cash contributions with a bank) — Fedlex, accessed 29 September 2026
- Code of Obligations (CO), art. 931 (registration of sole proprietorships with turnover of CHF 100,000 or more) — Fedlex, accessed 29 September 2026
- Federal Act on Value Added Tax (VAT Act), art. 10 — Fedlex, accessed 29 September 2026
- Memo 2.02: Self-employed contributions to OASI, DI and IC (position as of 1 January 2026) — OASI/DI Information Centre, accessed 29 September 2026
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