Company Establishment in Zug Canton

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. 

 

What are the main company types in 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. You can also choose to incorporate a Swiss SA and our team of speacialists in company formation can give you more details about this company type. 

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.   

 

What types of Swiss partnerships are available in Zug? 

 

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. 

 

 What are the characteristics of a sole trader in Zug? 

 

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.  

 

What are the steps for opening a Swiss branch in Zug?    

 

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.

 

The most employed business forms in Zug

Foreign investors coming to Switzerland can use any of the business forms presented above to set up a company in Zug. However, the limited liability company is by far the preferred option by entrepreneurs as it has a few important features that make it suitable for them. Among these, we mention the following:

1.  it is easy to register, and it requires minimum documentation;
2.  it implies a low share capital which is accessible to most investors;
3.  in Zug, it can be used for the creation of numerous enterprises in the most prolific industries;
4.  it can even be employed to create subsidiaries by foreign companies.

Apart from these, the private limited liability company can be the most suitable means to create one of the most popular businesses in the world at the moment: the startup.

However, when discussing company formation in Zug, the financial industry is one of the economic sectors that comes to mind thanks to the fact that this canton is known for the numerous financial institutions that operate here. For such activities, the stock corporation can be a better option as it more suitable for banks and insurance companies.

No matter the legal entity you choose to register in Zug, our Swiss company formation agents are at your disposal with tailored services.

Taxation in the canton of Zug

As many investors know, taxation is one of the most important aspects to consider when opening a company in any country. However, Switzerland is a little different from this point of view, as its corporate tax system is a three-tier one, therefore Zug has its own rate applied when it comes to companies.

Here is what you need to know about taxation in Zug:

• -   the corporate tax is now set at 11.91% down from 14.35%;
• -   profits from patents and other intellectual property rights are taxed at 10%;
• -   expenses on research and development activities will be increased by 50% when computing the tax base.

These changes have entered into effect in 2020 and provide for a more appealing taxation system applied at a cantonal level. However, they also target other Swiss cantons, as well. If you are interested in the changes in the Swiss taxation system, our agents can provide them to you.

With the new cantonal corporate tax rate, Zug has become more appealing for investors who want to open or relocate companies here.

Setting up a startup in Zug

The startup is one of the appealing types of businesses to create in Switzerland, as the government encourages research and development, and innovation which is why a business in any sector that implies innovation is welcome.

With the new provision on the increase of the expenses that can benefit from tax cuts for research and development, Zug is one of the best places in Switzerland to create a startup. The canton also has numerous angel investor and business incubators in which such companies can grow and flourish.

If you are looking for a canton to open a startup in, you can contact our Swiss company formation consultants who can help you. You can also watch our video below:

 

Services provided by our agents in Zug

If you want to open a company in Zug, you can simplify the procedure by requesting our company registration services. From consultancy on how to choose a suitable legal form to the preparation of the documents for incorporation, you won’t have to worry about having everything ready for quick incorporation.

Considering the current conditions that may not enable you to travel to Switzerland, the power of attorney will be your most powerful tool that will help you establish your own business with our help. With it, our agents will start the registration procedure and the only reason you might have to come here for is when creating the company bank account. For tips on how to choose a bank to work with, you can definitely rely on our experienced advisors.

We strive to offer full company registration services in Switzerland, including in the most appreciated cantons, however, you can also rely for assistance in respective the accounting requirements a business must comply with, therefore we have a team of specialists in this field to assist you.

Another sought service by those interested in the simplest way of starting a business is the virtual office that can be used as a legal address in the first phase of company incorporation. Since your company will be located in Zug, your business’ address will be located here. You will be able to change it any time or at the moment you have found a suitable location that can host both the registered address and the operations of your company.

If you are interested in other services, simply ask our agents by sending us an email.

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.