Is there less tax to pay with one system over another? Is one more protected legally?
Does anyone have a link they could share that explains the differences?
Thanks so much.
I am looking to start a freelance consultancy business and have learned that I can register it or not. Great to know, but I have struggled finding out what the benefits or disadvantages are of either system.
No protection whatsoever, tax is the same just turnover must be below 100k if not registered.
Thanks. So quite different from the Limited system in the UK.
This won't happen for a while but if one sees their income potentially going over the CHF 100,000 mark while being in the middle of a fiscal year, I supposed it can then be registered?
It's the same as being a sole trader in the UK. Set up a company if you want any protection.
This is what I am confused by. I thought registering one's company is setting it up as a company where a small amount of money is required (which you then get back). So, I am now confused again. Could you explain more? And how are you protected more if you are a registered/approved/set up company?
The level of your question indicates to me that you probably should do more research.
Here is a good place to start:
In a nutshell:
https://www.startups.ch/en/inform/details/forms/
https://www.justlanded.com/english/S...in-Switzerland
http://www.companyformationswitzerla...wiss-companies
http://www.swiss-company.ch/en/rechtsformen_ag.asp
http://switzerland.isyours.com/E/CO/types.htm
I would go for "Einzelfirma" or "Solo".
Sole Trader vs. GmbH:
A sole trader (Einzelfirma) can generally be set up by anyone at anytime. It is not legally required to put funds into a sole trader, and generally there is no distinction between the person and the business. It is not required to register it commercially or for VAT until annual revenues exceed CHF 100'000. Simplified, single-entry bookkeeping is often sufficient although there may be advantages to having double-entry with a balance sheet depending on the business. Any profits flow directly to the owner and the owner is required to file only one tax return. Double taxation is avoided.
A GmbH is a legal structure that must be registered from the start. Minimum capital contribution is CHF 20'000 which can be used for operating purposes. Among other things, double-entry bookkeeping is required and the GmbH must file a tax return, even if the the business is dormant. The owner is generally an employee but wouldn't have to be. Liquidating a GmbH follows a legal process and is generally more time consuming and costly than ceasing business as a sole trader.
There are frequent discussions on EF whether a GmbH is preferable to a sole trader from a liability perspective. Although there could be advantages, it should be noted that doctors, attorneys, architects, tradesmen and local retail businesses are often organized as sole traders, according to the Swiss government. It can be presumed that they carry adequate liability insurance while noting that the risks are probably not as high as in the US and generally in the Anglo-Saxon world.
As mentioned by Tilia, Gruenden.ch, which has pages in English, is a good place to obtain an understanding of setting up a business in Switzerland.
If you set up a company the requires minimum share capital is 20k which then belongs to the company. 'You' only get the money back if you close the company. The money can be used by the company.
Thanks. Interesting. I was told by someone that one would need to provide the money but would get it back once the company was registered as they only wanted to see that the company could have the money.
I have been told so many things that conflict with one another - even by Swiss officials. I need to create a database of printed documents so that I can understand better and bring them in to someone to explain.
I am trying to develop a freelance consulting business while on RAV because I am too qualified here to find a full-time job. First world problem, I know, but it is still a problem. Being a freelance consultant fixes that problem.
Yet I was just told by one person at the RAV office that I am not allowed to do that - I either stop the RAV and start working for a "real" company or...not sure what the other option is. It is odd because I have a friend and one of her friends that were able to develop their freelance business while on RAV by claiming the smaller earnings (which were deducted from RAV) until they had enough clients/money coming in to have a proper freelance company.
So, why I was told "no" is beyond me. Even my counselor said I could do it. It appears the RAV people have NO documentation either which explains this possible transition. So further investigation is required.
Thanks so much for letting me know about the attorneys, architects, etc. I need to look into liability insurance that would be enough for a sole trader business. If the choice is really only sole trader or (the next step) GmbH, I would need to stick with the sole trader as I don't have CHF 20,000 to start it off. I am just hoping my consultancy business actually works at this point.
I am looking at that site now. I have looked at it before but forgot it existed! Will need to find others too.
Gruenden.ch says that RAV may agree to provide up to 90 days of unemployment compensation for an unemployed person who intends to become self-employed and has a business plan. For Ct. Zurich there is a Fachstelle Selbständigkeit; RAV in other cantons should have a similar group/ department. Details at this page (German):
http://www.gruenden.ch/gruendungseta...igkeit-heraus/
The Swiss government has a list of advantages and disadvantages to forming a sole trader (Einzelfirma) at this link:
Thanks so much for your links, particularly the second one. I do know of the 90-day RAV plan during which one is still paid while they set up a company. While this is a great offer, my concern is that I need time to get clients, probably more than 90 days. Most of the books that I have read and people that I have spoken to say, it is really more like 9 months or a year.
One of my friends here in Ticino did the 90-day plan, and he said it just was not enough time to set up everything and get enough clients. So, he had to abandon it for a full-time job instead. I cannot do that as I am too qualified in my small field to find a full-time job here.
So, my goal is/was to start doing freelance work. What I declare is then deducted from my RAV payments and my RAV is extended while I continue to look for more work. In the next 7 months (which is when it is supposed to run out), I will hopefully then have at least a working list of clients so that I can show them I will be able to be financially self-sufficient enough (whatever that would mean to them). And I might even have some extra time on the RAV that could fill in the gaps for the next few months if I have not been able to make enough. I know several people who have supposedly done this and my counselor even said that I could.
But when I visited La Cassa the other day (the money dept), I was told that I cannot do this. That if I get "independent" work (i.e. not contracted temp work or a contracted full-time job), I will then lose my unemployment. I could claim one or two one-off "gigs", but that is it. If they could see it was ongoing, they would cut me off even if I might be making only a fraction of my RAV payments.
So, something is wrong with this picture because what I was just told does not correspond to what my friends have done or what my counselor told me.
They also said that I could move my unemployment from 100% to 60% or 80% and then work independently for a day or two a week, but I am not sure how that would work and if they would still expect me to claim what I made. This was the first time that I heard of this option so I have no idea what it all means.
The RAV 90 days is to set up, not help you build the business. Once your ready to trade the RAV payments will end.
You can do self employed work whilst with the RAV, there is no limit of 2 gigs. Your only problem is if you choose to be 100% self employed.
Generally, receiving unemployment compensation and self-employment are incompatible. However, as alluded to by FMF, there are three exceptions:
Ausnahme 1: selbständig Erwerbend im Nebenberuf Ausnahme 2: gelegentlicher selbständiger Zwischenverdienst Ausnahme 3: Teilselbständigkeit Details at this link:
Thanks so much. Very helpful. I just wish I spoke German. I speak fluent French but not sure if a page like this exists in the Vaud or Valais. I don't think it exists here in Ticino since they told me "no". With Google Translate, I might be able to understand enough to ask specific questions with the payment side of the RAV office.
Interesting. That might only work with some people then...who already have a year's salary to live off of. But if you have that, not sure why you'd need much of the RAV then anyway.
At the moment, I don't want to be 100% self-employed because I don't have the clients or money to do that. I want to do some work/projects for people here and there in the hopes that it will come to 100% self-employment before the RAV runs out.
In terms of the number of "gigs", you are saying that I can do some work for some people and then fill out the "intermediary work forms" and then it should be fine (my unemployment days are pushed back and my RAV payments are deducted?). Do you know if there is a limit? A friend of a friend has been doing this for 5 years! I have no intention of doing anything like that but extending the RAV for a couple more months would be helpful, if needed.
Do you know if there is a link with that info? You have been SO helpful. Seriously.
One another thing...when you say "self employed" are you talking about temp work where a company needs your services for 2 weeks (or whatever) and pay your AVS, etc. Or you actually talking about proper self-employment work where the AVS would need to be taken out later (in this case by the RAV office)?
I am talking about being SELF EMPLOYED not an Employee for a day, week, month.
You actually need permission to be 100% self employed that is not that easy to get, so just doing a project even if you earn 20k in a month is fine.
You just fill in the form showing any employment you had that month, be it as employee or self employed it's the same form
SO helpful. Thanks again.
The woman at the RAV did mention getting permission to work as a self-employed person and that it is complicated and I would have to provide a number of different forms. Do I need the same approval once I feel like I can move on from the RAV or it runs out?
If so, do you know if one needs a minimum about of clients and income coming in?