SPECIFICS OF DOING BUSINESS IN SWITZERLAND
Eastern, northern, and central cantons of Switzerland are considered more favourable for doing business. The country offers profitable investment opportunities in various sectors, including agriculture, hospitality, innovative technologies, fintech, and biotechnology. However, it is crucial to note that non-residents are not allowed to manage a Swiss company directly. To address this, a resident must be involved as a manager for the business.
In Switzerland, there are two types of taxation — federal and communal or cantonal. One of the major features of doing business in Switzerland is a separate legal framework regulating taxation in each canton, which applies alongside the federal tax code. At the cantonal level, the Tax Harmonization Act also applies. All companies registered in Switzerland are subject to Swiss corporate income tax. The tax rate is calculated on an individual basis, depending on the company’s income level and the type of activity conducted. If a non-resident company does not conduct business in the country, it will be taxed at reduced rates.
In Switzerland, certain types of business may require obtaining a licence. Such permits are necessary for those planning to carry out their activity in the areas of finance, securities trading, provision of medical services, opening a gambling business, etc. Licenses are issued by institutions responsible for regulating the specific business area. For example, Fintech licences are issued by FINMA (Swiss Financial Market Supervisory Authority). Moreover, Switzerland is one of the few countries that grants an official licence to work with cryptocurrencies.
In Switzerland, the fiscal year begins on January 1st and ends on December 31st of the same year. Any company officially operating within this jurisdiction is required to keep a book of accounts and adhere to the general principles of commercial accounting as outlined in the Swiss Code of Obligations. The balance sheet, income and loss statements, as well as inventory must be maintained in Swiss francs (except for daily accounting reports). Every company is required to submit a detailed annual financial report. Swiss companies must also engage an external auditor annually to conduct an audit of their financial situation.