In Switzerland, independent entrepreneurial activity, whether freelance or working with an enterprise, is not considered a separate legal entity. All assets and liabilities of such a business are inseparable from its owner. Therefore, signing up in the trade register is not compulsory, but rather a declarative measure. However, such registration is mandatory if the annual turnover exceeds 100,000 Swiss francs (~111,320 USD).


The same rules apply to the registration of a VAT payer. Such registration in the federal tax administration is required if the amount of turnover is not exempt from taxation (e.g. medical, educational, non-commercial activities), regardless of whether such turnover is generated in Switzerland or abroad.


Since independent entrepreneurship is carried out in Switzerland, it is necessary to register your activity in the Cantonal Social Security Office and pay social insurance contributions from your income.


Is it necessary to pay income tax in Switzerland?


In addition to residence or self-employment in Switzerland, it is obligatory to pay income tax, which is declared once a year in the relevant canton based on an individual`s annual net income, according to a progressive tax scale. However, certain incomes that do not exceed a minimum breakpoint, are exempted from taxation.


For entrepreneurs who do not have an actual office (only a legal address) or employees in Ukraine, there is an opportunity to disband the Ukrainian business entity and register a new one in Switzerland.


At the same time, it does not matter where your bank account is - in Switzerland or abroad. It also does not matter whether the bank account is registered to the company or to its owner, as Swiss law does not distinguish these two concepts.


Choosing the right model is important for the distribution of social security contributions in Switzerland.


More details are in the article

December 13, 2023