Switzerland is a preferred jurisdiction for company registration because it offer reliability, respectability and privacy, together with limited liability and tax privileges. , which is under The Swiss Constitution guarantees economic freedom and allows anyone, including foreign nationals, to form or hold an interest in a Swiss company. The form generally used by foreign investors is the Stock Corporation (“Societe Anonyme” or “Aktiengesellschaft”), particularly certain specialised forms that offer tax-privileged treatment:
- Holding Companies – A Swiss Holding Company is an entity whose primary purpose is to hold and manage financial investments in affiliated companies. Under Swiss tax law, a Holding Company should not conduct any other business activity in Switzerland. Providing certain conditions are met, income or gains arising from qualifying participations are effectively exempt from Swiss federal and cantonal taxes. Due to Switzerland’s extensive Double Tax Treaty network, a Swiss Holding Company is an ideal vehicle for the consolidation of worldwide investments and participations.
- Mixed Companies – Swiss Mixed Companies are entities whose business activity is primarily (at least 80 % of both sales and purchases) related to business outside Switzerland. The use of Mixed Companies can result in savings in corporate income tax levied on income and capital gains and they are widely used for international trading and tax planning. Federal tax of 8.5% will be applied to income, but cantonal tax will only apply to Swiss bound income to give an overall rate that will generally not exceed 10%.
- Domiciliary Companies – A Swiss Domiciliary Company is an entity that carries on purely administrative functions in Switzerland and has practically no Swiss revenue (under 5%). Auxiliary companies outside Switzerland may conduct any activities. The auxiliary companies’ tax regime is only available at the cantonal level and varies from canton to canton, but generally income from qualifying participations is tax-exempt and only a portion of income from abroad is subject to Swiss tax. Revenues and expenses of Domiciliary Companies are apportioned among various categories, each subject to different taxation rules.
Sovereign provides ready-made or customised incorporation of all types of Swiss companies. To enjoy the benefits under certain Double Tax Treaties (e.g. no or much reduced withholding tax on dividends with Hong Kong and Singapore) it is often prudent to use such a foreign company as shareholder. Sovereign can also provide such International Companies on a global basis.
Once incorporated, we provide a domiciliary service, which includes the provision of company secretarial, registered office and nominee shareholder services. All Swiss companies must register with the Federal Commercial Registry Office, which maintains a freely accessible database (www.zefix.ch) with information on trade names, registration numbers and legal domiciles. To avoid being publicly identified as a shareholder, Sovereign can register a trust company that has a non-registered trust agreement with the beneficial owner.
Full management services from our own licensed corporate directors are also available and highly advisable in most cases. Re-mailing services are available at modest cost for all companies established by Sovereign.
Note: Ancillary Services
In addition to providing incorporation, domiciliary and management (directorship) services, a range of ancillary services at competitive prices is available on request. These services include, but are not limited to: provision of dedicated telephone lines; office and personnel assistance; designated staff members (temporary or permanent availability); assistance with office relocation, introduction to real estate agents, government agencies and other third parties
There is no Swiss substantial law on trusts and therefore no provision for a Swiss domestic trust. However a trust can be established under foreign law and, since 2007 when Switzerland ratified the Hague Convention, trusts are recognised as a legal structure. In 2007, the Swiss Tax Conference issued circular No. 30 on the taxation of trusts for cantonal/communal income tax purposes and the Federal Tax Authorities issued a similar circular with respect to federal income tax. Generally the trust itself is never subject to tax due to a lack of legal personality. Furthermore, trust assets and income cannot be attributed to the trustee or the protector. Therefore, trust a Swiss resident trustee can manage assets without triggering a tax liability on the trust assets and income. However in certain cases Swiss residents will be liable to tax on the assets as well as the income.