Switzerland

Key facts Switzerland taxation

Foreign investors often choose Switzerland as a country to invest in due to the competitive economy, low taxes and welcoming environment. Also the country's geographical position and natural resources make Switzerland a prolific country to start a business. The government offers favorable conditions to both Swiss and foreign investors. However measures are taken to encourage foreign investment, including grants and loans for businesses activating in research and development, culture, information, health and communication.

Aktiengesellschaft (Stock Corporation):

  • minimum of three shareholders
  • minimum authorized capital of 100.000 CHF (approx.80,000 EUR) is required
  • board of directors must be shareholders
  • liability of the members is limited to company assets

Gesellschaft mit beschränkter Haftung (Limited Liability Company):

  • minimum two shareholders
  • minimum one director and at least one of the directors must be resident in Switzerland
  • minimum authorized capital of 20,000 CHF (around 16,000 EUR) which has to be fully paid up
  • liability of the partners is limited to the amount of capital invested in the company

Taxation:

  • Federal income tax is at 8,5%
  • Cantonal corporate income tax varies, but on average is around 13%
  • combined tax is between 12% and 22% (depending on the residency area)
  • Switzerland holding companies are tax exempt at cantonal level and pay a tax of 7,8% only
  • VAT tax is 8%, for certain supplies and services such as food, medicine, newspapers etc. VAT rates of 2,5% and for hotel accommodations with VAT rate of 3.8%
  • VAT refundsare obtained only once a year and not all foreign companies are entitled to it. Basically every profit made in Switzerland is VAT taxable. However the amount can be recovered by submitting an application signed by the business owner to the Tax Authorities of Switzerland. The minimum amount for which the refund is asked is 500 CHF. The application should be based on original invoices and a VAT certificate and in case it is accepted the refund is processed and made within 6 to 9 months
  • Dividend withholding tax paid by companies in Switzerland is 35%
  • Only certain interests are taxed with 35% at the federal level such as the ones derived from deposits with Swiss banks, bonds and bond-like loans
  • royalties are not subject to taxation in Switzerland
  • no tax on the technical service fees
  • The Swiss branch remittances are not taxed
  • Caapital tax is levied by each canton between rates of 0,05% and 0,3% of an entities value
  • Resident companies are taxed on their worldwide income
  • Non resident companies are taxed only on income derived from their Swiss operations
  • Double taxation agreements with more than 55 countries