How to Start a New Business in Switzerland as an Expat
"What brings you to Switzerland?"
"My husband's job ... "
Recognize this conversation? If you're a trailing spouse, you certainly will as you'll have had it at least 35 times in the first 30 days of your arrival and will continue to have the same for the duration of your expat life.
Rewinding 13 years, I arrived in a tiny village on the outskirts of Geneva with a toddler in tow and no job in sight. I'm a city girl, a real estate lawyer, used to London and lattes, not pumpkins and LaPoste. Job search began. Two weeks later, job search ended. Childcare costs were more than a part-time job as a personal assistant (no requirement for U.K. property lawyers here). Consequently, I embraced the DIY industry and, using my hobby as a skill set, started a cake decorating business -- novelty cakes, a phenomenon not yet embraced by the Swiss who celebrate with a tarte at any age.
By chance and a little networking, I landed a business development role in a foreign law firm but for economic reasons after eight years this came to an end. I consulted recruitment consultants. It appears that I was suitable for approximately zero roles. Retrain, they said. With three children now to care for and "free" time at a minimum, that appealed as much as skiing in a bikini. Sign up for unemployment, they said, and you can get 85 percent of your salary for up to two years. Not enthused by the term "on the dole," Trevisan was born.
Setting up a new company in Switzerland is not the simplest of processes and one should note that regulations may differ between cantons, but here is a step-by-step guide as to how to successfully start up a new business:
In Switzerland, this is not an optional step and will help you remember to implement all the required steps as you proceed. Be aware that business angels, who contribute to startups with venture capital, are a rare breed in Switzerland.
2. Do your market research.
You will need to look at who your potential clients/customers will be and what their needs are currently. Look at who your competitors are and what they are offering so that you can sufficiently differentiate yourself. Ask yourself what your niche is, your unique selling point. For me, it was social media tailored to the financial services industry. Use this checklist from the Swiss government for market competition and target groups.
3. Decide on a legal structure.
What is crucial is that you match your legal structure to your real current requirements as this will impact your tax and insurance liabilities.
The first question to ask yourself is, how great a risk and liability do you want to assume? If you are happy to take on the liability for any accrued debts of the company, a sole proprietorship may be best suited to your needs and you will need only to register in the trade register. If you are going into partnership with others, you will most likely want to share the possible burden and therefore wish to opt for a general partnership or a limited partnership. If you want to minimize risk as far as possible, you should set up a SARL or SA.
Before you rush in and plum for one of the above, be sure to take into account the following aspects:
- Capital: Different structures necessitate varying capital inputs in terms of set-up costs, funding and minimum capital requirements.
- Risk/liability: As a rule of thumb, the greater the business risk posed by your new venture or the larger the financial contribution required, the better it is to opt for a limited liability company.
- Independence: Consider whether you intend to work in partnership or seek investors.
- Tax: One must take independent advice regarding your personal situation.
- Social security: The chosen structure will determine whether the social insurance schemes are obligatory or optional. Sole traders are not insured against unemployment and are not obliged to contribute to a pension fund. However, the directors of SAs and SARLs are viewed as employees and therefore included in social insurance schemes.
Starting my own business has to date been an overwhelmingly positive experience with daily encouragement from an ever expanding network of professionals within both Switzerland and my online LinkedIn network. Bon chance, tout le monde.