Setting up offshore companies in Switzerland calls for a highly qualified workforce and prompt end-to-end processes involving accounting and taxation. The incorporation of companies in Switzerland is a pretty straightforward process that offers great benefits to companies and employees working. The rules and regulations mandate for prompt accounting processes and maintaining proper books of accounts, irrespective of the size, type of business, or financial size. To begin with, all businesses must maintain proper books of account and other associated documents for a period of 10 years
Regulatory requirements to keep books of accounts
Legal entities and sole proprietorships and partnerships, have a duty to maintain financial records. The requirements are not applicable in certain cases detailed hereinbelow:
– Sole proprietorships and partnerships that have generated revenues of less than CHF 500,000 in the last financial year, or
– Associations and foundations without obligation to register with the commercial register
– and the foundations that are exempt from appointing an auditor as per art. 83 para. 2 of the Swiss Civil Code.
Accounting requirements under Swiss laws
Privately held Swiss companies require a statutory audit upon meeting a certain threshold for companies requiring ordinary audits or limited statutory examination. Companies that fall under any of the following categories must have their accounts under ordinary audits:
-Balance sheet reflecting a total of CHF 20 million
-Revenue of CHF 40 million
-average employee strength of 250 full-time equivalent employees (FTEs)
Companies that report lesser revenues can opt out of an audit or have limited statutory examination and examination entirely if there are less than 10 FTEs and with the consent of all shareholders.
Swiss taxes for companies
The application of taxes depends on the structure and legal form of the business, and the taxes as the profit is made due either by the business owner directly or by the legal entity.
The business owner either receives remuneration or receives dividends from the company. In either case, remunerations are deductible expenses for the company, but taxable income for the individual. Taxes are subject to social security and pension contributions, and dividends are paid by the company from its profit after tax and are not subject to any taxes, or social security and pension contributions
The dividend amount taxable for shareholders is reduced by 40%. This eliminates any instance of double taxation both at the federal tax level and at the Canton level.
Understanding the tax implications and accounting standards is important before you step up to start a business in Switzerland. The combination of salary and dividend is proven to be beneficial for effective taxation.
As a business consulting firm, Accutor AG provides end-to-end solutions for businesses and individuals wanting to set up a new business in Switzerland. From prompt paperwork to a streamlined accounting process, we provide end-to-end solutions for enterprises and individuals who wish to set up businesses in Switzerland.