Starting a sole proprietorship in Switzerland – step by step

In short: In Switzerland, a sole proprietorship comes into existence as soon as you start working alone for your own account – no notary needed. Three things matter most: a business name that contains your surname, registering with an AHV compensation office and, from CHF 100,000 in revenue, entry in the commercial register and VAT registration.

What is a sole proprietorship?

The sole proprietorship (Einzelfirma) is the simplest legal form for self-employed people. You run the business alone, there is no minimum capital and setting it up costs almost nothing. In return, you are liable for business debts with all your assets – including your private assets.

Step by step

1. Choose a business name

The business name of a sole proprietorship must contain your surname, for example “Muster Carpentry” or “Anna Muster Design”. Additions suggesting a company, such as “& Co.”, are not allowed. On Zefix you can see which names are already registered.

2. Check permits

Some activities require a permit from the federal government or the canton – for example in healthcare. Check with the competent authority before you start.

3. Start your business

Prepare quotes, win your first clients and invoice in your own name. You will need these documents for the next step.

4. Register with an AHV compensation office

It is the compensation office, not the commercial register, that decides whether you are self-employed. It asks for evidence that you are already working, for example invoices, contracts or quotes. Register within the first few months – with the cantonal compensation office or with your professional association’s office. More: AHV registration for the self-employed.

5. Sort out your insurance

As a self-employed person, you are not compulsorily insured against accidents and not a member of a pension fund. Check which insurance you need: Insurance for the self-employed.

6. Set up your bookkeeping

Below CHF 500,000 in revenue, simplified bookkeeping of income, expenses and assets is sufficient. Keep your records for ten years. More: Bookkeeping for a sole proprietorship.

7. From CHF 100,000 in revenue: commercial register and VAT

• Commercial register: if the sole proprietorship generated revenue of at least CHF 100,000 in the last financial year, it must be registered. Below that, registration is optional.
• VAT: from CHF 100,000 in revenue from taxable supplies per year, you become liable for VAT and must register with the Federal Tax Administration (FTA) within 30 days.

Pros and cons at a glance

Pros	Cons
No minimum capital	You are liable with your private assets
Few formalities, low costs	Your surname must be part of the business name
Less administration than a GmbH or AG	Business and private income are taxed together

Torn between a sole proprietorship and a GmbH? Read Sole proprietorship or GmbH?