Executive Summary
The official name of Switzerland is the Helvetic Confederation, and it is a landlocked country in Western Europe, which occupies the area of 41,285 sq km. Switzerland was founded in 1291. It consists of 26 cantons united in a confederation. Bern is its capital and the place where the federal authorities are located. Geneva, Zurich and Basel are the biggest cities.

Switzerland has one of the highest levels of life quality of the world; Geneva and Zurich occupy leading positions among the world’s best cities, in terms of life quality. German, French, Italian and Romansh are four recognized official languages of Switzerland. The country has no official religion, but Christianity is a predominant one, which coexists together with other religions brought by immigrants.

Switzerland borders with Germany, Italy, Austria, France and Liechtenstein. The country has a long history of neutrality, being able to avoid the majority of wars other European countries were involved to. Many international organizations have established their representative offices in Switzerland, but the country has decided not to join the EU.

The Federal Constitution adopted in 1848 and amended in 1999 represents the foundation of the modern confederation. The bicameral parliament is a

legislative body, the Federal Council has an executive power, and the Federal Court is a judicial entity. Switzerland is a federal parliamentary republic which applies direct democracy principles, which is achieved by a high level of people’s involvement in referendums where many important questions, including constitutional amendments are decided. Decisions voted in referendums can even overturn parliamentary decisions. Swiss citizens are subject to three legal jurisdictions within the country: the commune, the canton and the federal levels.

Switzerland has stable and modern, one of the most developed and most powerful economies of the world. Among important industries of the country it is necessary to note banking and insurance, chemicals, health and pharmaceutical, measuring and musical instruments, real estate, tourism and international organizations. Chemicals, machines, electronics, instruments and watches, as well as Swiss chocolate are largest exported goods; exported services constitute approximately one third of all the exported products.

Unemployment level is comparatively low, Switzerland’s GDP per capita is one of the highest in the world. Taxation regime is one of the most favourable and one of the lowest among developed countries which offers an attractive opportunity for one’s business organization and management. Out of 178 countries, Switzerland is ranked 16th in the Ease of Doing Business Index. However, agricultural protectionism has resulted in high food prices. Housing prices are also significantly above the European average. Switzerland has free trade agreements not only with the EU, but also worldwide.

The Swiss Franc (CHF) is the national currency.

The Northern part of Switzerland is characterized by hilly territories, partly forested and partly cleared with beautiful lakes, resulting in a higher density of population in comparison to a rather mountainous South of the country. Alps occupy approximately 60% of the country’s total area with the highest peak – Dufourspitze, 4,634 metres above the sea level. Waterfalls and glaciers are characteristic to numerous valleys located in the Alps. The most popular mountain is Matterhorn which is located near Zermatt on the border with Italy. Apart from the Swiss Alps, the country comprises other two basic topographical areas – the Swiss plateau and the Jura mountains, along the North-Western border with France. The Lake Geneva is the largest lake of the country, the main tributary to which is the Rhone River.

Switzerland has a generally temperate climate, which, however, varies significantly  depending on the zone, changing from glacial conditions to Mediterranean climate, determined by geographical position of a location under examination. Summers are often warm and humid. Winters in the lower lands are often foggy and grey, while mountainous terrains enjoy sunny and snowy days.

Eco-systems of the country are diverse and particularly vulnerable, as numerous valleys are separated by high mountains, making those territories isolated, where unique ecologies develop. Some species of plants are characteristic to mountainous regions and are not found anywhere else, which requires a particular attention and care.

Map, Flag and Coat of Arm


Types of Company

Switzerland is a civil law jurisdiction and companies are regulated by the Civil Code. In comparison to common law countries, civil law jurisdictions are more bureaucratic. Following the Civil Code of the Federal Level, every Swiss canton has a separate Commercial Register, which is a public document, and has power to adopt some local regulations for corporate entities.

Stock Corporation (SA)
This type of company is often used by foreign investors. There should be at least 3 subscribers, where nominee shareholders and nominee subscribers are allowed. The minimum authorized share capital should be 100,000 CHF. Share capital cannot be increased by more than 50% at one time.  Shares can be ordinary, preference, voting or non-voting. Bearer shares are permitted. A majority of directors should be Swiss nationals and should reside within the jurisdiction. There should be a registered office and audited accounts, which must be filed with the Companies Register annually.

Holding Company
This is a Stock Corporation with a particular tax status. This type of company benefits from reduced income tax and capital gains tax at federal and cantonal levels. For federal level a holding company is any entity which holds at least 20% of shares of another corporate entity or the holding values of shares are evaluated at least at 2m CHF at a market price. The definition of a holding company may differ within the cantons, but generally, a holding company is regarded as such by a canton in case  it derives 51%-66% of its income from dividends remitted by a subsidiary or it holds 51%-66% of its shares.

Domiciliary Company
These companies are Stock Corporations which are managed from a foreign country and are controlled by foreign persons, which however has a registered office in Switzerland, without having physical presence or staff within the jurisdiction. A business activity must be conducted abroad, from which such a company’s income is derived. This type of company has favourable corporate and capital gains taxation regimes.

Auxiliary Company
It is a Domiciliary Company, which, in addition to its business conducted in foreign countries, can also have some business activities in Switzerland. This type of company is possible to incorporate and manage only in seven cantons, and it does not have any privileges at federal level. Even though the major part of such a company’s income must derive from foreign source, Swiss offices and staff may be established and held in Switzerland.

Mixed Company
This type of company combines characteristics of a Holding and a Domiciliary companies. There are no tax advantages at federal level, but a favourable taxation is applied at cantonal and municipal levels, in case the following conditions are satisfied: the company is controlled by foreign persons, the company has close relations/cooperation with foreign entities, at least 80% of its income derives from activities/sources conducted/held abroad.

Service Company
It is a Stock Corporation the only activity of which is provision of technical services, management, marketing, publicity, financial and administrative services provision to foreign companies. A Service Company may not usually derive income from companies outside their corporate group. A Service Company does not have any tax advantages at federal level, and the status of a Service Company is obtained in a canton.

A branch of a foreign company or a company from another canton must be registered in a chosen canton, where the branch needs to be established. A nominated Swiss resident must be a branch representative. All the incomes derived from activities conducted in Switzerland are taxed as local companies at federal and cantonal levels, as if they were resident corporations. No withholding tax is levied on transfers of a branch to its parent company abroad.

General Partnership
Two or more partners join in one enterprise and have joint and several unlimited liability for a partnership’s obligations. A partnership contract must be submitted to the Commercial Register.

Limited Partnership
A minimum of one general partner and a minimum of one limited partner form a limited partnership. General partner is fully liable for partnership’s obligations, but a limited partner is liable only up to the amount invested. Only private persons can become general partners, while corporate entities can become limited partners.

Limited Liability Company
Registered capital must be at least 20,000 CHF and must not exceed 2,000,000 CHF. This type of company is a mix between a corporation and a partnership. The name of the company must be registered in the Commercial Register. Issue of bearer shares is not allowed. At least one of the directors must be resident in Switzerland. Auditors are not obligatory.

Sole Proprietorship
Registration with Commercial Register of a Sole proprietorship – a private person resident of Switzerland who conducts its own business at its own expense, occurs only when the annual turnover reaches 100,000 CHF. A proprietor has unlimited liability for such a structure’s obligations.


A person is a resident in Switzerland if he has a work permit, conducts a business in Switzerland, or lives in Switzerland for at least 180 days in one year.

Being a confederation, there is no centralized tax system in Switzerland. Some taxes or a part of a specific tax are levied at a federal level, at the same time as others are applied by cantons and/or communes’ authorities.  Differences of tax rates among cantons are significant. The average capital gains tax on real estate transaction is 18% and a capital transfer tax on real estate deals in average is 4%, but also these taxes rates vary significantly within the cantons.

Income tax is progressive, but it usually does not exceed 40% summing up federal, cantonal and communal income tax rates levied on individuals. Residents are taxed on their worldwide income, non-residents are taxed only on income derived from activities in Switzerland, but the rate of tax is applied based on such individuals’ world-wide income. Social security contributions are paid by employers, employees and self-employed at federal level.

The “fiscal deal” can be arranged and implemented by non-nationals of Switzerland who have never had any type of activity within the jurisdiction, and who wish to be residents there. After having decided which canton to reside in, an individual can achieve a favourable personal taxation scheme.

Different rates of stamp duty are levied on diverse transactions. Inheritance tax is levied at cantonal level in all the cantons. In case a canton levies a gift tax, its rates are equal to inheritance tax rates. Residents are liable to pay annual wealth tax on assets located in Switzerland, while non-residents pay annual wealth tax on assets derived from business and real estate located in the jurisdiction. Wealth tax rate differs among the cantons, but it is 1.5% in average. Individuals whose wealth is below a certain level, determined by every canton, are not liable for the wealth tax.

Similarly to the personal taxation system, taxes for corporate entities vary among the cantons, as a part is payable at federal level, and another part is decided by and payable to cantons.

A company is being considered resident for tax purposes in Switzerland in case it has been incorporated there or its management is effectuated from within the jurisdiction. Corporate tax is payable at federal, cantonal and communal levels. Federal authorities have exclusive rights to levy stamp duty. Net worth tax is levied at federal and cantonal levels, based on the assets belonging to a company. The federal tax rate is 0.8%, while cantonal rates vary from 0.3% to 1%. Withholding tax is under federal authorities’ administration and is levied at different rates on various precisely defined transactions.

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