Contracting in Switzerland

The registration requirements for Switzerland vary significantly based on your nationality and business structure. The country maintains distinct processes for EU/EFTA citizens versus non-EU/EFTA nationals.

For EU/EFTA Citizens:

Thanks to the Agreement on Free Movement of Persons, EU/EFTA citizens enjoy relatively straightforward access to the Swiss labor market. You'll need to:

• Register with the local municipality (Gemeinde/Commune) within 14 days of arrival
• Apply for a residence permit at the cantonal migration office
• For stays under 90 days, use the online notification procedure instead

For Non-EU/EFTA Citizens:

The process is more rigorous, with Switzerland applying a selective immigration policy that prioritizes highly qualified professionals. You generally need:

• A job offer or client contract from a Swiss entity
• Proof of qualifications showing you possess skills scarce in the Swiss labor market
• A work/residence permit (usually B permit for longer stays, L permit for shorter assignments)

Business Registration:

Once your residency status is secured, business registration depends on your chosen structure:

• Self-employed (Einzelunternehmen): Register with AHV/AVS (social security), cantonal tax authorities, and only with the commercial register if annual turnover exceeds CHF 100,000
• Limited company (GmbH/AG): Mandatory registration with the commercial register, requiring notarized articles of association and minimum capital (CHF 20,000 for GmbH, CHF 100,000 for AG)

All businesses must register for VAT if annual turnover exceeds CHF 100,000. Additionally, you'll need to open a Swiss bank account, obtain professional liability insurance (often required by clients), and potentially register with relevant professional associations depending on your field.

Switzerland's social security system, though comprehensive, differs significantly from many European countries in its structure and funding model. All residents of Switzerland must contribute to the Swiss social security system, which consists of several "pillars."

First Pillar (AHV/AVS, IV/AI, EO/APG):

The mandatory state pension and disability insurance system. Self-employed individuals pay a total contribution rate of approximately 9.65% of their annual income, while employed individuals split a total of 10.6% between employer and employee contributions.

Second Pillar (BVG/LPP):

The occupational pension scheme. It's mandatory for employees with an annual income exceeding CHF 22,050. Self-employed individuals can join voluntarily. Contribution rates increase with age, typically ranging from 7% to 18% of pensionable salary.

Third Pillar:

Private, voluntary pension savings with tax advantages. Particularly important for self-employed contractors who don't benefit from the mandatory second pillar. For 2024, self-employed individuals can contribute up to CHF 35,280 or 20% of net income (whichever is lower) to Pillar 3a.

Other Social Insurance:

• Health Insurance (KVG/LAMal): Mandatory for all residents but not tied to employment. Must be arranged privately with monthly premiums typically ranging from CHF 300-600 per adult depending on canton, chosen deductible, and coverage options.
• Accident Insurance: Mandatory for employees (covered by employer) and optional for self-employed.
• Unemployment Insurance: Generally not available to self-employed contractors but mandatory for employees.

International Considerations:

Switzerland has bilateral social security agreements with many countries, potentially allowing contractors to remain in their home country's system temporarily or avoid double payments. EU/EFTA nationals can typically benefit from totalization of insurance periods across countries.

The Swiss social security system offers high-quality benefits but comes with substantial costs. For contractors, especially those operating through their own limited company, proper planning around salary vs. dividend distributions can significantly impact social security liabilities.

Switzerland's reputation for banking excellence makes it relatively straightforward to access high-quality financial services, though the process can be more complex for non-residents and certain business structures.

Opening a Business Account:

Most Swiss banks offer specialized business accounts for each business structure. The documentation typically required includes:

• Identification documents (passport, residence permit)
• Proof of address in Switzerland
• Commercial register extract (for incorporated entities)
• Company statutes/articles of association (for GmbH/AG)
• Business plan or client contracts (especially for new businesses)

Bank Options:

• Large Swiss Banks: UBS and Credit Suisse offer comprehensive services but typically have higher fees and stricter requirements.
• Cantonal Banks: Each canton has its own bank (e.g., Zürcher Kantonalbank, Banque Cantonale Vaudoise) often offering competitive terms for local businesses.
• Regional and Cooperative Banks: Raiffeisen and various regional banks sometimes provide more personalized service and competitive terms for smaller businesses.
• Digital Solutions: Options like Revolut Business, Wise Business, or Swiss neobanks are gaining popularity for their simplified processes and lower fees.

Banking Costs:

Business banking in Switzerland typically involves monthly account maintenance fees (CHF 5-50 depending on the bank and services), transaction fees, and potentially other charges for services like international transfers. Some banks waive fees if you maintain a minimum balance or meet other conditions.

Considerations for Contractors:

• Multi-currency accounts: Essential if you work with international clients, allowing you to receive and hold funds in different currencies.
• International payment capabilities: Look for competitive exchange rates and reasonable fees for international transfers.
• Integration with accounting software: Many banks offer connectivity with popular accounting platforms, simplifying administrative work.
• Digital banking features: Mobile apps, e-banking, and digital document submission can make managing your finances more efficient.

The traditionally strong privacy protections in Swiss banking have evolved with international standards for transparency and information exchange. While still offering excellent security and stability, Swiss banks now comply with various international regulations including automatic exchange of information for tax purposes.