If you’ve given thought to establishing a company or a branch of your company on the European continent, you should ask one important question. “Why Switzerland?”
Once you’ve established this as the foundation of your business plan, you should devote the necessary time to answering that question. Consider this description of the country: it’s a beautiful country, one of the most picturesque on the planet. Switzerland is a wealthy country with high per-capita income, excellent infrastructure, and corporate and personal tax levels that are relatively low.
In addition to those attractive characteristics, the country is also known worldwide as a financial centre of the first order. Companies with Swiss headquarters have a reputation for quality and maintain their status as leaders in the global economy.
Open the Door
If these benefits convince you to pursue company formation in Swiss business culture, you’d be wise to work with experienced professionals who have helped many valued clients get started in this inviting atmosphere. One of the first benefits that they’ll point out is low corporate tax rates; in some cases, these are a third of the rate in other countries. The Privileged Mixed Company rate ranges from 4% to 11% while the Privileged Holding Company rate is less than 8%.
These specialists will also guide you to specific locations where the tax rates are very enticing. For example, the Canton of Zug is known for its favourable tax structure, which makes it an excellent choice for multinational corporations establishing a Swiss corporate entity. The general tax rate for corporations is 15.3% and the value added tax for goods and services supplied within the country is 8%. When you’re thinking about establishing a business in Switzerland, you should also consider the personal taxation levels. These are levied at three levels (Federal, Cantonal, Communal). In the Canton of Zug, the income tax rate is 16.7%.
As you begin the planning stage, you should also consider the common company structures that you can use. A Swiss Holding Company is designed to hold group subsidiaries, to hold significant shareholdings in external companies, to hold intellectual property, and for the protection of assets. There are specific benefits to choosing this structure, including exemption or reduction of income tax on dividends from “qualifying participations.”
You’ll also benefit from other corporate structure choices such as Business Control Centre Company or Mixed Company, Swiss Management Company, and Swiss Finance Company/Subsidiary. The first is designed to manage and administer international business operations and to hold intellectual property or other assets. Use a Swiss Finance structure to fund group or international operations and a Swiss Management Company for the provision of management or services to non-Swiss entities with lower tax rates.
Your Swiss-based professional may also guide you to establish a Swiss branch office so that you can manage and administer international business operations from this location. Your benefits would include exemption from withholding taxes, no share capital required, and exemption of Swiss profits in hands of the parent. You can depend on specialists to handle all aspects of the process for incorporating and registering in Switzerland.