I am a software engineer, and I recently got several offers that are above my current salary, but would require me to act as contractor.
I was wondering what would be the best legal form to do so. I don't speak German that well so I would just prefer to hire a professional to do all bookkeeping.
There is one thing however - I understand that as contractor I would be liable for any damages up to my entire wealth. Is there a way to limit such responsibility? Either by legal entity or via insurance? Like I don't plan on stealing trade secrets, but mistakes happen and I don't want to start all over in 5 years if one happens to me.
So - who can do the setup and bookkeeping for me? How much such service typically cost? Is there a way to limit personal responsibility against non-willful harm?
Following the KISS principle, if your clients are willing to work with an individual contractor, it could be possible to start your business as a sole trader/ self-employed (Einzelfirma) and then later take a decision on whether to incorporate the business into a legal entity (GmbH/ AG). If liability is a concern, insurance could be purchased to cover this risk. (Some household policies automatically cover liability up to a smallish limit, say, Fr. 15'000 revenues as a secondary occupation).
Some additional comments:
1. Contact SVA Zurich to register for social security purposes as self-employed (selbständig).
2. SVA Zurich should normally then obtain a UID enterprise number for you.
3. Consider registering with the commercial register (Handelsregister), which will be required at any rate when annual revenues exceed Fr. 100'000.
4. Review whether it might be worthwhile to register for VAT under the smiplified reporting method. VAT registration will be required when annual revenues exceed Fr. 100'000 (and sometimes earlier, if quarterly revenues exceed Fr. 25'000).
If your business has few fixed assets, it can be possible to maintain your accounts with a Profit & Loss statement rather than with full financial statements. If few transactions are expected, it might also be possible to use your personal bank account for your business. Otherwise, it is often better to set up a separate business account.
Simplest is to work through a payroll company. As far as liability is concerned, professional indemnity insurance is what you need. Talk to any broker.
- limitation of liability clauses, i.e. exclude liability for damages as far as possible (both in terms of fault, i.e no liability for negligence, in terms of type of damages, i.e. no consequential damages/no loss of profits/etc., and in terms of amount, i.e. capped at amount XX. However, generally you cannot exclude liability for gross negligence or wilful intent and this also applies to any indirect limitations, i.e. amounts/type of damages;
- professional liability insurance, i.e. insurance in case something does happen. You just need to be sure that it will cover your activity (e.g. also claims against copyright infringement, etc.) and has a sufficient coverage amount;
- setting up a legal entity which will be the contracting entity and thus should limit any direct claims (it is not complete protection since there might still be some claims that can be made, e.g. directors liability or clawback actions if you take out money prior to bankruptcy, or any non-contractual claims, i.e. claims based on tort etc.).
If you intend to provide services in a business area in which a minor fault can have large consequences, I would presumably go for all three. Of course it comes with costs (set-up, premiums, taxes and social security).
yeah but it's recoverable. don't fully understand it either but talk to an accountant. mine was quite clear on it. massive saving not being an independent.
As did I! Sorry, my meaning was that if the OP goes down self-employed/gmbh/ag route, then talk to an accountant. Otherwise - nah! If I were to go contracting again (seems unlikely since I know where the directors buried the bodies), I'd go payroll. As it worked out though, gmbh was the right choice for me.
Of course there is, provided you own at least 10% of the company's capital.
For the federal income tax, 70% of the dividends count as income and are taxed (30% rebate). The details for the cantonal/communal level will differ by Canton, 30-50% rebate used to be common until STAF got implemented last year, that may be a bit less now.
This is not the case. There is only one advantage in having ones own company over using a payroll company and to take advantage of one would need to work through it and retire in Switzerland.
Your idea could cost the significantly more in income tax as well as being them into the wealth tax net because of the way a company is valued by the tax authorities.