Setting up a branch in Switzerland: steps, costs and taxation
Many companies, both Swiss and foreign, choose to set up a branch in Switzerland to expand their business internationally. This approach offers numerous advantages, but requires an understanding of the specific legal and tax requirements in Switzerland.
What steps do you need to take to set up a branch in Switzerland? Regulations, legal framework, formalities… You’ll need to follow specific procedures to ensure your business is officially recognised, all backed by a sound tax and legal strategy. Follow our guide to make sure you don’t miss a thing!
Branch or subsidiary in Switzerland: what are the legal and tax differences?
There are several ways to establish your business in Switzerland and expand it across its various cities.
Do you already have an existing business? Whether it’s based in Switzerland, France or elsewhere, there are two strategies available to you for expanding your business: setting up a branch or opening a subsidiary. Both of these business structures are governed by Swiss law, but each has its own tax, accounting and legal obligations.
Responsibility and autonomy of the two organisations
- The branch remains legally dependent on its parent company. It must therefore operate under the same name. The only point to bear in mind is that the branch’s name must be distinctive. Put simply, if your aim is to set up a branch in Geneva, you could, for example, name it “[Company name] – Geneva Branch”.
- A subsidiary, on the other hand, has its own legal personality. Even if the majority of its share capital is held by its parent company, it remains an independent legal entity with its own share capital.
Impact on accounting and tax returns
The branch: it pays tax in Switzerland on its local profits, but these are then consolidated into the parent company’s accounts. Are you worried about double taxation – first in Switzerland and then in France? Don’t panic: the tax treaties between the two countries protect you from this risk. But that’s not all: you won’t need to deposit any capital, there are reduced incorporation fees, and you won’t need to go before a solicitor either. The only catch is that you’ll need to appoint a representative for the subsidiary who is resident in Switzerland.
- The subsidiary: as an independent legal entity, it keeps its own accounts and has its own taxable income.
In practice, this means you can therefore distribute dividends to the parent company without the accounts of the two companies being consolidated. Setting up a subsidiary, however, will be more expensive and require more work: a visit to a notary and mandatory capital deposit, incorporation costs of at least several thousand Swiss francs, and the need for dedicated accounting management.
When should you choose a branch rather than a subsidiary?
Setting up a branch office is the ideal way to establish a presence in Switzerland with a streamlined process in record time. However, please note that this status will not allow you to diversify your operations in Switzerland. The law requires that the business activity remain similar to that of the parent company.
Setting up a subsidiary, which is a more complex process, is better suited to companies that want a fully independent legal and tax entity.
💡 Good to know:
In practice, subsidiaries are entirely free to pursue business activities that differ from those of their parent company.
What legal form should a branch take? (Public Limited Company or Limited Liability Company)
As a branch does not have its own articles of association, you must adopt the same legal form as its parent company.
Differences between limited companies (SA, SARL) and partnerships
Swiss residents, cross-border workers or executives of international companies can easily set up a branch in Switzerland. In practice, Swiss limited companies are most commonly public limited companies (SA) or private limited companies (SARL), as they limit the director’s liability and protect their personal assets. This is a key advantage over partnerships.
Implications for foreign companies
For a foreign company, the legal status of the parent company must be recognised in Switzerland. Otherwise, the branch’s registration will not be approved. In practice, a foreign company organised as a public limited company (SA) or a private limited company (SARL) can easily set up a branch under the same legal form in less than a month. These are the most common legal forms in Switzerland.
What administrative procedures are involved in setting up a branch in Switzerland?
Whether the parent company is Swiss or foreign, the establishment of a branch must strictly adhere to specific administrative rules in order to be officially recognised. Here are the main steps.
Registration with the Companies Register and required documents
A branch must first be registered with the Swiss Commercial Register in the canton where its head office is located. You will simply need to provide the company name, its legal form, its registration number, the branch’s address, its purpose and the name of its representative.
Appointment of a representative resident in Switzerland
The law permits foreign representatives, provided they are resident in Switzerland. You will therefore not need to choose a representative of Swiss nationality.
VAT registration and compulsory social insurance
Registration for Swiss VAT is also mandatory. The simplest way to complete this process is to do so online by providing the following supporting documents:
- Extract from the Companies Register
- IDE number
- National Insurance number
- Revenue forecasts
- For foreign companies: the appointment of a representative resident in Switzerland
⚠️ Please note: all staff employed by the branch must be registered with the compulsory social insurance schemes in Switzerland. Also, don’t forget the CMU contributions for cross-border workers if you are recruiting a French resident.
Benefits of setting up a branch in Switzerland
Setting up a branch in Switzerland is the most practical solution for a French company. In just four weeks, you’ll be able to continue expanding into one of Europe’s most stable and attractive markets.
Access to a stable market and a skilled workforce
Switzerland offers reassurance thanks to its excellent economic and political stability. For a foreign company, setting up a branch in Switzerland also means investing in a market where purchasing power is among the highest in the world.
Switzerland stands out for attracting highly skilled professionals, which is a boon for recruiting both local and international talent. However, it is important to bear in mind the cost of labour: Swiss employees earn on average 2.5 times more than their French counterparts.
Simpler formalities than for a subsidiary
Setting up a branch office is, above all, a way of testing the Swiss market without having to deal with the administrative burden or financial constraints of an independent entity:
- No requirement to deposit capital
- No notarised deed is required
- Set-up fees limited to approximately CHF 500
- Simplified administrative procedures
- Quick start-up
- A flexible solution for assessing the market before investing further
What hidden fees and costs should you expect?
Unfortunately, the high cost of living in Switzerland doesn’t spare businesses either! The Swiss franc is strong, operating costs are high, and local banks charge numerous fees on transactions, particularly on business accounts. The good news is that there are solutions available to overcome these challenges.
Bank charges and foreign exchange transactions
If you use a traditional Swiss bank, you’ll soon notice the excessive spreads on your currency exchange transactions, not to mention the account management fees.
No one wants to see their profit margin eroded every time they transfer Swiss francs into euros, or vice versa. With b-sharpe, you benefit from a competitive exchange rate and low fees, with no nasty surprises. It’s a simple and transparent solution for optimising your currency transfers and safeguarding your profitability.
Fees for assistance from trustees or solicitors
On paper, setting up a branch in Switzerland is straightforward. In practice, however, we recommend seeking professional guidance. As every mistake costs time and money, the key is to rely on specialist trustees or lawyers. Their advantage is that they know the local procedures inside out. For many, this is an essential (and reassuring) step to ensure that the company’s ambitions fit perfectly with the Swiss accounting and legal system.
⚠️ Please note: there may be other unexpected costs, such as the translation of the branch’s documents into the language of its parent company. To be on the safe side, always allow for the possibility that legal services may be required, which could drive up the bill.
Frequently asked questions about setting up a branch in Switzerland
A branch is the simplest and most cost-effective company structure:
• Registration fees: approx. CHF 500.
• No capital required.
• Other possible costs: translations, fiduciary services, VAT.
No, unlike a subsidiary, there is no need to deposit capital.
Here is the information and documentation required to validate the registration:
• Current extract from the parent company’s commercial register (dated within the last 6 months).
• Certified copy of the parent company’s articles of association.
• Official decision by the parent company to open a branch in Switzerland.
• Appointment of a representative in Switzerland (with proof of address).
• Address of the branch’s registered office in Switzerland.
• Description of the business activity (which must be identical to that of the parent company).
To convert your Swiss francs into euros, and vice versa, it is far more advantageous to avoid traditional banks.
There is no need to let them take their cut; instead, opt for a simpler and less expensive currency exchange solution. With b-sharpe, you benefit from competitive exchange rates, completely transparent pricing and even faster EUR-CHF conversions!
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