Foreigners are not disallowed from founding a company in Switzerland. A distinction is made between persons from EU/EFTA-states and citizens of third countries. Below are the requirements for starting your own business based on nationality:

• Persons from EU/EFTA countries

Citizens of EU/EFTA countries (currently still excluding Romania and Bulgaria) are allowed to make themselves self-employed in Switzerland. According to the free movement of persons agreement, persons who do not have a residence permit (C-permit) are also allowed to found a company—the five-year residence permit (B-permit) is sufficient. To register in Switzerland, the planned business activities have to be declared and proven. Documents to provide this proof can be—among others—the following: commercial register entry, VAT-number, business plan, professional register entry, proof of social insurance as a self-employed person, and books of account. Further information is provided by the cantonal migration offices.

• Persons from third countries

Persons from non-EU/EFTA states wishing to be self-employed in Switzerland have to live up to standards of labour law. Only C-permit holders or people married to such or Swiss citizens have a legal right to be self-employed in Switzerland. If none of the criteria above is applicable, then foreign investors are still allowed to setup their own companies, as long as they can offer proof for the fact that their businesses will have a lasting and positive effect on the Swiss economy. A business plan is mandatory. Upon being granted the permission to set up your own business, you will receive a short – term permit (L permit). By having this permit, you will be able to conduct business activities in Switzerland for 12 months. You can renew this permit for another 12 months, but in order to renew it, you must pass the labor law exam organized by the administration[1].

The following requirements on residency and nationality apply to establish[2]:

- Sole proprietorship:

A sole proprietor company is owned by one proprietor only. Therefore, labour market regulations for persons apply. A residence and work permit is always required to work in Switzerland.

- General and limited partnership:

General and limited partnerships are usually small person-oriented companies. The limited partnership can include external investors who are not actively involved in the management of the company. Accordingly, labour market regulations for persons with a valid work and residence permit apply for the individuals.

- Limited liability company (GmbH):

The limited liability company (GmbH) as a legal entity must be represented by at least one person resident in Switzerland. This can be the manager or a director. Accordingly, this person needs to have a valid residence and work permit in Switzerland.

- Joint-stock company (AG):

A joint-stock company (AG) as a legal entity requires that at least one person entitled to represent the company must live in Switzerland and hold a valid residence and work permit for Switzerland.

Hiring non-Swiss/Non-EU nationals:

Conditions apply to the employment of employees on the basis of the employee’s nationality. These conditions are as follows [3]:

• People who require a permit to take up gainful employment
• People who travel to Switzerland to take up gainful employment
• Trainees who come to Switzerland as part of continuous education
• Trainees and students who work part-time
• Relatives of short-term residents, students and refugees who have been granted provisional asylum
• Asylum seekers who wish to work after the waiting period expires
• Provisionally admitted foreigners
• Recognised refugees with a B permit
• People who do not require a permit to take up gainful employment
• People with a permanent residence permit (C permit)
• People entering the country in the course of family reunification (B permit) who may engage in gainful employment
• People with a residence permit (EU/EFTA passport) for the purposes of gainful employment

Details of work permit requirements can be found on ch.ch

SOURCES

[1]Information quoted from Sigtax

[2]Information quoted from KMU Portal

[3]Information quoted from Office of Economy and Labour