After setting up a company procedures in Switzerland

The completion of the initial company incorporation procedure at the Federal and Cantonal Commercial Registry marks the official birth of a legal entity in the Swiss Federal Republic. However, in order for this legal entity to conduct business activities in accordance with the law, businesses need to carry out a number of procedures after establishing the company, which will be presented in the article below.

Procedures for disbursement of charter capital after setting up a company in Switzerland

After the establishment of the company, the representative of the company needs to notify the bank where the escrow account is opened that the company has completed the incorporation procedures. You need to provide a copy of the extract from the Commercial Register for confirmation.

After receiving a copy of the company’s business registration extract, the bank will proceed to release the blocked account. Usually, this money will be transferred directly to the company’s operational bank account. From this point on, the charter capital becomes the property of the company and the management/board of directors has the right to use this money for the purposes of the company’s legitimate business activities, in accordance with the registered objectives and charter.

Tax declaration procedures after setting up a company in Switzerland

After setting up a company in Switzerland, you’ll have a number of important tax filing and payment obligations to comply with. The tax system in Switzerland operates at both the Federal, Canton, and Commune levels, so the specific obligations may vary slightly depending on where your company is located. However, the main taxes and declaration obligations include:

Corporate Income Tax (CIT)

• Obligation: All companies (especially AG/SA and GmbH/Sàrl) must declare and pay taxes on their net profits.
• Frequency: Annual declaration.
• Basis for declaration: Based on audited (or statutorily prepared) financial statements of the previous fiscal year (Balance sheet, Statement of business results).
• Procedure: Submit a corporate income tax return (Steuerklärung / Déclaration d’impôt) to the state tax authority where the company is registered. Federal income tax is also calculated based on this return.
• Deadline: Usually a few months after the end of the company’s fiscal year (e.g., September 30 for the fiscal year ending December 31), but this deadline may vary by State.

Capital Tax

• Obligations: Most States and some Communes collect taxes on the company’s equity (charter capital + reserves).
• Frequency: Annual filing, usually filed together with the Corporate Income Tax return.
• Basis for declaration: Based on the company’s equity at the end of the financial year.
• Procedure: Information provided in the same annual tax return filed with the State tax authority.

Value Added Tax

• Obligation: Registration is mandatory if the annual taxable turnover in Switzerland and abroad exceeds CHF 100,000. Voluntary registration is possible if it is below this threshold.
• Frequency: Usually quarterly declaration. It is possible to declare monthly (if you are regularly entitled to tax refund or large turnover) or annually (according to the fixed tax rate method if eligible).
• Declaration basis: Declare the total taxable revenue, input VAT paid and calculate the amount of VAT payable or refunded.
• Procedure: Submit an electronic VAT return to the Federal Tax Administration (FTA).
• Term: Within 60 days after the end of the reporting period (quarterly/month). Payment must also be made within this time limit.

Withholding Tax at Source

• Obligation: Applies mainly to the payment of dividends and interest rates from certain sources (such as Swiss bonds). The standard tax rate is 35%.
• Frequency: Declaration when taxable transactions arise (e.g., when deciding to pay dividends).
• Procedure: The dividend-paying company is obliged to deduct, declare (using specific forms such as Form 103) and pay this tax amount to the Federal Tax Administration (FTA).
• Term: Usually within 30 days of the payment being made.
• Note: Dividend recipients who reside in Switzerland can usually claim a full refund of this tax amount if they correctly declare their income on their personal/business tax return. Overseas recipients may request a partial or full refund based on the Double Taxation Avoidance Agreement (DTA).

Stamp Tax

• Obligations: Federal taxes on certain transactions. Some of the transactions include:
  • Issue stamp tax: 1% on the issuance or increase of equity (equity/contribution) if the value exceeds CHF 1 million (tax exemption for the first CHF 1 million).
  • Securities transfer stamp tax: Applied when transferring taxable securities (stocks, bonds, etc.) with the participation of a Swiss stockbroker.
  • Procedure: Self-declare and file with the Federal Tax Administration (FTA) within 30 days after the taxable event occurs (e.g., after applying for a capital increase).