Invoicing as a Freelancer in Switzerland under CHF 100k: OASI & VAT Rules

Q: Is it enough to declare my income to the tax authorities to be considered self-employed in Switzerland?

Absolutely not. In Switzerland, the OASI (AHV) Compensation Office grants self-employed status after analyzing your file (multiple clients, economic risk, own infrastructure). Without this recognition, your clients risk being requalified as employers.

Executive Summary

Launching a freelance business in Switzerland (Sole Proprietorship) generating less than CHF 100,000 per year offers a light administrative framework, but comes with formidable legal pitfalls. Tax-wise, according to Art. 10 of the VAT Act, you are exempt from mandatory VAT registration (you invoice net amounts). Socially, this is the critical step: you must obtain formal recognition of your self-employed status from the OASI (AHV) Compensation Office. To bypass the "launch paradox" (finding your first 3 clients without having the certificate), temporary use of an umbrella company (payrolling) often proves essential. Without this strict validation, your clients face the risk of your contracts being requalified as disguised employment and will have to pay your social charges retroactively.

1. The Tax Framework: VAT Exemption (The CHF 100,000 Rule)

In Switzerland, the administrative simplicity for small independent activities is remarkable. It is not necessary to found a Joint-Stock Company (SA/AG) or an LLC (Sàrl/GmbH) to start invoicing. You can operate under the Sole Proprietorship (Einzelfirma) status, simply by using your surname.

The main financial advantage of starting "small" concerns the Value Added Tax (VAT).

The Principle of Article 10 of the VAT Act

The Federal Act on Value Added Tax (VAT Act) sets a clear threshold: As long as your annual global turnover (from taxable services) does not exceed CHF 100,000, you are exempt from mandatory VAT registration.

Concretely, this means that:

You do not charge any VAT to your clients (your prices are net).
You are exempt from heavy quarterly declarations to the Federal Tax Administration (FTA).
Corollary: You cannot recover VAT on your own professional purchases (IT equipment, travel expenses).

The mandatory mention on the invoice: For your invoicing to be legally bulletproof in the absence of a VAT number, you must absolutely include the following mention on your documents: "VAT not applicable".

2. The Social Trap: OASI (AHV) Recognition (The True Judge)

This is where the illusions of many freelancers or cross-border workers shatter. A persistent misconception leads people to believe that if they earn little money, it's enough to declare it on their tax return at the end of the year. This is false and very dangerous for your clients.

In Switzerland, you do not proclaim yourself self-employed!

Self-employed status is not a free choice. It is a status that must be granted to you by your cantonal or professional OASI (AHV) Compensation Office (Old-Age and Survivors' Insurance).

To recognize you as self-employed, the OASI will require concrete proof that you are not a "fake employee". Here are the 3 cardinal criteria verified:

OASI (AHV) Criteria	What you must prove
Plurality of clients	You must prove that you work for several clients (generally at least 3). If 100% of your turnover depends on a single company, the OASI will refuse the status.
Economic independence	You act in your own name and bear the economic risk (collection costs, investments). You set your own hours and workplace.
Own infrastructure	You have your own premises, your own equipment, your own domain name, and you handle your own advertising.

The Risk of "Disguised Employment" for Your Clients

If you invoice a Swiss company without being formally recognized as self-employed by the OASI, that company takes a massive risk. In the event of an audit, the OASI will requalify your commercial relationship as an employment contract. Your client will then have to retroactively pay social contributions (both employer AND employee shares) on the amounts they paid you.

This is why, in Switzerland, most serious companies will demand to see your OASI affiliation certificate before paying your first invoice.

3. The Launch Paradox: How to Invoice Your First Clients?

The previous point raises a well-known legal headache for entrepreneurs. For a future freelancer—whether a local resident or a cross-border worker (e.g., from France, Germany, or Italy)—to obtain their OASI certificate, they must prove they already have clients (invoices required). But companies refuse to work with them until they have this famous certificate.

How do you break this chicken-and-egg paradox to land your first 3 mandates legally? Two expert strategies are available:

Solution A: The Umbrella Company / Payrolling (The Secure Route)

This is the most recommended method to start. You sign a contract with a Swiss umbrella company (payrolling). In the eyes of the law, you are an employee of this umbrella company.

The umbrella company issues the invoices with its own OASI status and VAT number.
Your clients face zero risk of requalification, which greatly facilitates signing the first contracts.
The umbrella company deducts social charges, retains a commission (often between 5% and 8%), and pays you a net salary.

Once you have consolidated your portfolio (3 or 4 regular clients), you can then present this evidence to the OASI, leave the umbrella company, and apply for your own self-employed status.

Solution B: Provisional Affiliation and Withholding

If you wish to invoice directly in your own name from day one, you must proceed with absolute transparency toward your first clients:

Request a provisional affiliation from your cantonal compensation office by presenting a business plan, signed offers, or draft contracts. Some offices (depending on the canton) can issue a temporary agreement in principle.
Inform your first clients that your status is "pending validation." To fully reassure them, the client can withhold the amount of social contributions (around 10%) from your invoices. If the OASI grants you self-employed status a few months later, the client will pay you this withheld amount. If the OASI refuses, the client will have the funds to pay the social charges and will be protected.

4. Financial Optimization: Repatriating Freelance Income

Once the status is obtained, if you are a cross-border worker acting as a freelancer in Switzerland, or if you invoice international clients from Switzerland, you will receive Swiss Francs (CHF) that you will need to convert into Euros (EUR) for your personal use or taxes.

As a freelancer, every franc counts. The most common mistake is to cash CHF invoices into a traditional bank account, letting the bank apply its "standard" exchange rate to your euro account.

Don't Sacrifice Your Net Margin to Bank Exchange Rates

Traditional banks apply opaque exchange margins (often between 1.5% and 2%) and SWIFT transfer fees. On an annual turnover of CHF 80,000, you could lose more than CHF 1,500 solely in conversion fees.

As a Swiss financial intermediary designed for professionals and cross-border workers, ibani allows you to:

Invoice with a CH IBAN: Provide your clients with a true Swiss IBAN in your name.
Convert at the interbank rate: As soon as your client pays the invoice, ibani converts the funds at the real market rate.
Repatriate for free: Funds are sent to your Euro account (personal or pro) the same day, via the local SEPA network, eliminating SWIFT fees.

Discover ibani Solutions for Freelancers

Frequently Asked Questions (Freelancing in Switzerland)

Yes, you can invoice in your own name under the status of a "Sole Proprietorship" (Sole Trader). There is no need for starting capital or registration in the Commercial Register if your turnover is under CHF 100,000.

This is the launch paradox. To get your first 3 clients without risking them paying your social charges, the best solution is to temporarily use a Swiss umbrella company (payrolling), or ask the compensation office for provisional affiliation based on contract drafts and a business plan.

No. According to Art. 10 of the VAT Act, companies with a global turnover of less than CHF 100,000 are exempt from mandatory VAT registration. You must then include the mention "VAT not applicable" on your invoices.

Absolutely not. This is a common mistake. In Switzerland, the OASI (AHV) Compensation Office grants self-employed status after analyzing your file (multiple clients, economic risk, own infrastructure). Without this OASI recognition, your clients risk being requalified as your employers and having to pay your social charges.

Invoicing in Your Own Name (Freelance) under CHF 100,000: OASI Rules and VAT Exemption