Switzerland is a neutral state in the middle of Europe, known throughout the world for its developed offshore banking sector and the strongest banking secrecy. Is that really true? How will the Swiss banking secrecy develop in the future?
Founding a company and business in Switzerland:
The Swiss company is suitable for a specific type of businessmen.
At the same time, it should be noted that this product also isn’t for everyone.
- Low tax rates. Don’t expect a classic offshore paradise.
Legal entities with a registered office or administration in Switzerland are subject to absolute tax liability. Housing companies are subject to income tax on income from all over the world, with the exception of income from foreign companies or foreign real estate.
- A business environment with new opportunities for you. The Swiss market is big, rich and has the potential to move your business to a whole new level.
- The highest possible prestige you can have with your clients and partners (owning a company in Switzerland is something like Hermes brand for women).
- Bank benefits. When you have a company registered in Switzerland, you will get a bank account with one of the Swiss banks. It's not bad what do you think? It could be said that it’s the dream of every businessman.
What’s happening with the Swiss offshore market these days and what’s the future outlook?
- Although the banking sector is one of the major and greatest Swiss benefits, neither the country with the most advanced bank infrastructure and respecting banking secrecy will be able to face international pressure on a long-term basis and is forced to negotiate bank information exchange contracts.
- The affairs of leading US companies such as Google, Starbucks, and Apple, which have managed to improve their taxes with the help of international network of companies, led to active fight with tax havens and break banking secrecy in 2013. Luxembourg was the first to share information on foreign client accounts in the country, Switzerland joined in and decided to provide information to foreign tax authorities in certain cases.
- The FATCA regulations package, which came into force on July 1st, 2014, was approved in the United States. Under these regulations, the United States will require information on any foreign bank accounts held by American citizens or companies. Switzerland has agreed with these rules in relation to the United States under the threat of sanctions, but this has meant that many clients have moved to more suitable locations.
- Currently, an agreement was agreed within the Organisation for Economic Co-operation and Development (OECD) to exchange information on financial accounts but also other sensitive data, including information on interest, dividends or performance of certain types of insurance products.
Swiss companies are subject to federal, cantonal and municipal taxes, which vary from 11% to 24%, depending on the location. The Zug canton has the lowest tax. At least one of the directors must be a Swiss resident, the shareholder(s) may be individuals or legal persons from any country. All companies have to keep accounts and file tax returns
Switzerland is chosen by companies that require an uncompromising image for their headquarters. In practice, Switzerland is most often used by holding companies or companies doing business in areas with high added value
Type of legal entity: GmbH
Founding time: four weeks
Number of shareholders: at least 1 may be any nationality
Shareholders: Members may be FO or business entities.
Registered Capital: 20,000 CHF
Bearer shares: enabled
A physical address is required
A company secretary isn’t obligatory
Directors: at least 1, maximum isn’t defined
Resident office of director: the director must reside in Switzerland
Corporate Tax 12-24%
Retail tax rate 12-24%
Capital gains are taxed as current business income.
Dividends, bank interests 35%
Net operating losses can be carried forward against earnings up to 7 years.
The state VAT rate is 8%, reduced rates of 3.8% (hotel services) and 2.5% (food, etc.).
Agreements to avoid double taxation with different countries have been applied, determining the rates of dividends, interest and royalties.
Accounting. Accounting and accounts preparation is necessary
Auditing isn’t required only for large companies and companies with more than 10 employees
Anonymity and privacy. Information about directors (managers) and shareholders is open in the Commercial Register.