Setting up a sole proprietorship in Switzerland made easy — your guide to an uncomplicated start-up process

Founding a sole proprietorship is an important step for every entrepreneur. In Switzerland, this type of company offers a flexible and uncomplicated way to turn business ideas into reality. This guide is intended to give you a detailed overview of how you can set up a sole proprietorship and highlights all essential aspects from planning to managing your business.

Basics of setting up a sole proprietorship

What is a sole proprietorship?

A sole proprietorship, often referred to as sole proprietorship or in English as sole proprietorship, is the simplest form of self-employment. It is founded and managed by a single person who is solely responsible for business activities. The sole proprietorship has no legal personality of its own, which means that the owner is liable with all his private assets.

Who can set up a sole proprietorship?

In principle, any person of legal age and with legal capacity can set up a sole proprietorship in Switzerland. There are no specific qualifications or requirements to meet. This makes the sole proprietorship an attractive option for many entrepreneurs, regardless of their professional background.

Steps to start a sole proprietorship

Planning Phase

The foundation starts with careful planning. This includes drafting a business plan that covers your business idea, target market, financing and corporate strategy. It's important that you have a clear vision for your business and understand how you can achieve your goals.

Necessary documents and formalities to starting a sole proprietorship

Various documents are required to set up a sole proprietorship. This includes a valid ID, a description of your business, and possibly specific permits or licenses, depending on the nature of your business. Overall, however, the bureaucratic burden of setting up a sole proprietorship is very manageable. The only important thing is:

1. Verification of the chosen company name to ensure that it has not yet been used. Many owners of sole proprietorships simply name them after themselves (first and last name, or just last name).
2. Preparation of the commercial register application and, of course, there are numerous templates here, such as this registration form for aspiring sole traders in the canton of Zug.
3. Certification sheet. An officially certified signature sample from you, which is included in the signing of the commercial register application with the notary whenever you register a company in the HRA for the first time. This applies to all persons authorized to sign in any legal form (including limited liability companies, AGs, etc.). A copy of the identity document must also be enclosed with this certification form.

Registration and legal action

Registering a sole proprietorship is relatively straightforward. You must register your company with the commercial register, which is done with the documents mentioned above and a visit to the notary. You must also register with AHV (social security) and VAT (value added tax). It is advisable to seek professional advice to ensure that all legal requirements are met from the start and that you start your own business with a good setup. We are happy to help you with this and look forward to hearing from you about this.

Costs and financing of a sole proprietorship

Fees and initial costs

The costs of setting up a sole proprietorship vary depending on the type of business and specific requirements. Typically, they include the fees for registration of the commercial register, notary visits and possibly consulting costs and insurance costs. It is important that you have a clear budget and understand what financial obligations you have. Insider tip: Don't be 'ripped off' when it comes to notary and consulting fees, there are gigantic price differences here, but these are only rarely due to the quality of advice or service.

Financing tips

Your sole proprietorship can be financed through equity, loans or investors. There are also government funding programs that can support start-ups. Remember that sound financial planning is critical to the success of your business. In the canton of Zug, there are a number of good start-up incubators, accelerators and VCs that provide founders with funding and mentorship. The top 10 start-up funding programs 2023 in Zug are:

1. Bernina BioInvest is an investment firm
2. Blockchain Valley Ventures
3. CV Labs Incubation Program
4. CV VC (CV stands for Crypto Valley)
5. Dialectic
6. Invision Private Equity AG
7. Pinto Ventures
8. Polar Light Ventures
9. Spicehaus Partners
10. Verve Ventures

Management and administration of a sole proprietorship

Tax aspects and obligations

As the owner of a sole proprietorship, you must tax your income and assets. The tax burden depends on various factors, including your income and the location of your business.

In the canton of Zug, the tax rate is 11.8% up to a taxable income of CHF 150,000 and 22.6% for taxable income of CHF 500,000. A good ¾ of this includes taxes at the level of the canton and the municipality, while just under ¼ of this represents direct federal tax.

Income from a sole proprietorship is therefore taxed in the same way as income from an employee's salary. Owners of a sole proprietorship are therefore subject to cantonal income and wealth tax, but have more leeway to deduct costs and expenses that arise in connection with their self-employment from tax. Careful tax planning and extensive advice are definitely worthwhile to avoid surprises.

Frequently asked questions (FAQ)

Conclusion

Founding a sole proprietorship in Switzerland is an exciting step that offers a great deal of flexibility and personal freedom. With the right planning and preparation, this can be the start of a successful entrepreneurial career. It is important to be aware that with freedom comes responsibility, particularly with regard to financial, legal and tax obligations.

Additional resources and assistance

For further information and assistance, you can contact the Swiss Official Gazette of Commerce, local chambers of commerce and professional advice centers. These institutions offer valuable resources and advice for aspiring entrepreneurs.

This article gives you a comprehensive overview of founding and managing a sole proprietorship in Switzerland. Remember that every business venture presents its own challenges and opportunities, and use the resources available to maximize your success.