The canton of Zug is chosen by many investors due to the fact that it provides a set of low taxes, which represent some of the lowest taxes in Switzerland. Businessmen who want to open a company in Switzerland should know that in 2018, Zug was one of the most attractive Swiss cantons in terms of taxation, having the third lowest corporate tax rate (imposed at a maximum value of 14,5%).
At the same time, in the case of foreigners who want to relocate to Switzerland for personal or business reasons, Zug provides the lowest taxation system regarding the taxation of natural persons, having a maximum income tax rate of 22,9%. Our team of consultants in company formation in Switzerland can advise on other types of taxes that are applicable to both natural persons and legal entities registered in the canton of Zug.
There are many types of companies that an entrepreneur may choose to open in Zug and the most popular are the companies limited by shares and the joint stock companies. A company limited by shares, the Gesellschaft mit beschränkter Haftung (GmbH), has its capital divided into shares, with a minimum value of CHF 100 and with the liability of its members limited by the deposited capital. Its representation is made by a Swiss resident and during the registration of the company, it is also necessary to deposit the minimum share capital, which, in this case, has a value of CHF 20,000.
When starting a Swiss company limited by shares, it is required to establish its management, which is formed by the general meeting of the shareholders, the management body and the company’s auditors. As a general rule, the private company limited by shares is the most common business form that is selected for incorporation in Switzerland, this also being applicable to the canton of Zug.
Its popularity is given by the advantageous conditions offered to its founders, but also due to the small capital that has to be subscribed during its registration. At the same time, those who want to open a company in Switzerland should know that this company type can be easily changed into another business form if the investors want to. In this case, the company can be modified into a joint stock company, a type of business form which is generally selected for large companies.
A joint stock company in Zug requires a minimum share capital of CHF 100,000, payable in two installments: one at registration and the other one after starting the business. It is required to deposit at least 20% of the minimum share capital or CHF 50,000. The management of such a company is assured by the General Meeting of the Shareholders, the Board of Directors and the auditors.
The registration procedure requires that the following documents have to be deposited with a public notary: the articles of association, a confirmation from a bank that the minimum share capital was deposited, a statement of mandate acceptance by an auditor, and in the situation in which company doesn’t have its own office and a domicile acceptance declaration.
The registration with the Commercial Register is necessary for every business type, so the above notarized documents must be accompanied by a standard application and the proof of a unique name, deposited (usually by the notary) at the Commercial Registry. During this process, the share capital deposited in the bank remains blocked and stays like this until the bank receives an extract from the Commercial Register, stating that the company is registered in the canton of Zug.
The whole process takes from five days to three weeks, depending on the size of the company or the correctness of the documents. If the annual turnover is expected to be higher than EUR 80,000, then the VAT registration is mandatory. Our team of consultants in company registration in Switzerland can provide more information on the value added tax (VAT) requirements.
Foreign and local investors can register in Zug any other company types that are prescribed at the level of the Swiss Confederation. Thus, businessmen may register a partnership in Zug; the Swiss legislation prescribes three types of partnerships: the simple partnership, the general partnership and the limited partnership.
It is necessary to know that the simple partnership represents a simplified version of a partnership, as it was designed for short-term projects. In this case, the investors will not need to register the entity with the Commercial Register; however, when opening a company in Switzerland as a simple partnership, the investors will be taxed following the tax system available for natural persons, as this structure is not considered a legal entity.
Unlike the simple partnership, the general partnership has to be registered with the Commercial Register; the business form can only be registered by natural persons and it is necessary to know that the founders of the partnership can be held liable for the debts incurred during their business activities with their own assets. Our team of experts in Swiss company formation may further advise on the characteristics of the partnerships presented here and can also assist with information on the advantages of opening a limited partnership.
Besides opening partnerships, natural persons also have the possibility of opening sole traders in Zug; the sole trader is the simplest way to start a business in Switzerland and, provided that the investor wants to close the business down or has to due to different reasons, it is necessary to know that it benefits from the simplest liquidation procedure as well. The Swiss sole trader is characterized by the following:
• it can be registered by only one natural person, who wants to start a business activity in his or her own name;
• there is no legal distinction between the owner and the company and the founder must have a valid domicile in Switzerland, but the person does not need to be a resident of the country or of the canton where the business is set up;
• the sole trader does not need any minimum share capital and it can’t add any new partners during its lifetime;
• it provides the possibility of changing the basic company type with another business form (the main options in this sense is the limited liability company or the public limited company);
• the company’s trading name has to include the founder’s name (the family name, more exactly);
• the registration with the Commercial Registry will be necessary in the situation in which the sole trader has an yearly gross turnover of CHF 100,000.
The foreign companies may choose to open branches in Zug, more advantageous than opening local companies, due to the fact that there is no need to deposit a minimum share capital during the incorporation of the business. At the same time, the branch office in Zug, Switzerland, is a type o structure that is coordinated by the parent company abroad, which holds the full responsibility for any actions developed by the Swiss office. The documentation for establishing a branch in Zug is much vaster. Here are the required documents:
• an evidence of the existence of the parent company in the foreign country;
• the certificate of registration and the articles of incorporation of the parent company;
• a list with the managers and their responsibilities and the decision of registering a branch in Zug;
• the name of the branch and its registered address, its business goals, as well as the decision of naming the representative and his or her powers.
Businessmen are invited to contact our team of specialists in company formation in Switzerland for in-depth information on any other matter concerning the registration of a new business in the canton of Zug. Our specialists can also assist local and foreign entrepreneurs with advice on starting a business in Zug by purchasing the services of a virtual office or by buying a ready-made company.