Setting up a business as a B permit holder

Finance, Taxes, Banking, Insurance and Retirement
1
For a long time, I have wanted to set up a small business for my wife, but simply haven't had the time and the know-how... Not speaking the language, and holding only a B-permit are other things that get in the way, but surely some of you must have crossed those hurdles..??

If anyone has set-up, or helped someone else set-up a small business (whether as a proprietorship or a GMBH), I would love to hear of your experiences, as well as any tips / pointers / 'gotchas'....

How did you go about it? What did everything cost? How did everything work out in the end? etc etc

cheers

2
Normally people that hold a B permit are not allowed to become self-employed. The laws changed last year to permit EU and EFTA B permit holders the opportunity for self-employment under certain conditions. If you can read German the information can be found here:

http://www.bfm.admin.ch/index.php?id=539&L=0.&S=1#3675

If you are allowed to be self-employed, the cheapest form of "incorporation" is a GmbH which requires an initial investment of 20,000 CHF which can be placed in cash and assets (so not all just in cash).

You can find a lot of helpful information about setting up a business in Switzerland at this link:

http://www.gruenden.ch/internet/gruenden/de/engl.html

Good luck

3
It appears I am in a similar situation. As I am a sound engineer and record producer, the opportunities of "fixed" employment simply are non-existant, and I must work freelance if I'm to bring in money. The question is how?

I'm Canadian and hold a B permit as I am recently immigrated and married to a Swiss citizen. This I discovered does not allow me to own my own company here in CH. As well, if I wanted to set up a company with my wife as the owner, it requires 20000CHF! A little beyond our means with only one of us working at the moment.

Does anyone know if there are exceptions for people working in the arts field in regards to freelance/contract work?

Any suggestions would be appreciated.

4
The question is - why would you *NEED* to set up a business? Simply operate as self employed. You can register yourself as an "einzelfirma" if you really want to, but in your situation it won't be required. The costs and complications of going down the gmbh road are significant - avoid it if you can.

You are married to a Swiss and you don't even get citizenship. Gotta love this place...

5
The problem is that apparently as a B permit holder that I cannot work freelance either, as I am Canadian, not EU. I'm having a hard time figuring out what they expect me to do...

6
There are different kinds of B permit. It should be written on it what you are allowed to do. For example - is it tied to an employer? I doubt it very much since you don't have one. Does it forbid you to work?

How could it be that you would not be allowed to work to support your wife in her own country? While it wouldn't be beyond the realm of possibility - I'd be surprised!

So if you aren't forbidden to work, what is to stop me hiring you for a concert and paying you for the work you do? That's essentially what being self employed is all about. I was self employed when I had my B permit, but only after it was changed to a B-EU/EFTA. Prior to that I was bound to one employer.

7
Well, I'm allowed to work obviously if I can find fixed employment, but that is nigh impossible in my industry. Unfortunately, my B permit doesn't have any information on it regarding the employment rules, except regarding change of employment. This is just what I have gathered from the UK Swiss embassy website. Problem is, I'm not sure who the responsible authorities to ask are...

8
Hello

As the husband of a Swiss wife you are entitled to work in whatever business you like and for whomever you like. There are no restrictions. Furthermore the 20K starting "capital" of a GmbH is not the same as 20k cash. You can assign anything you like to the business. The best example of good things to assign is a car as this naturally is of high value but naturally depreciates quite quickly so can be offset against tax. A computer which clearly you have can also be used along with all that expensive sound equipment you have. It is very advisable to add a few K cash otherwise they don't look at this so favourably ie how can you survive without any investment.

just adding my 2 penneth worth.

9
Hi Richard, your comments with respect to gmbh are correct - but I just want to stress again that a gmbh is often not an appropriate option for a self employed person due to the reasons I mentioned in my earlier post, trading just as an unregistered entity (i.e. yourself) or if absolutely necessary as an einzelfirma is often the better way to go. Getting together the capital (via the methods you described) is one thing, but the maintenance of it and the way your tax status (and that of the company) is affected is quite another story...

10
Hi Mark,

The requirements for a GmbH are indeed different to that of an einzelfirma. The reporting requirements are stricter, however the decision whether to operate as an individual or as a company should not be influenced by this alone but by the importance of offering services as a company. It is all well and good having a simple reporting and tax requirement if no company will deal with you as you are not an official company. Here, I as probably you, are not able to judge!

btw Your brain avatar was much better than this cat...

Richard

11
I think the test here is if your customers are consumers or other companies, and what products/services you are offering. For example, a hairdresser would have no problem as an einzelfirma, as customers really dont care so long as they get a good trim, and the products are easily purchased from wholesalers. However, if lets say, you were in a business of supplying products/services direct to other companies, they may want the protection of dealing with a registered entity.

Oh, and I second Ritchard on the avatar. The homer brain rocked.

12
Interesting point - but I don't think companies would always care as much as we think they might. People looking at forming a company often do so to limit their liabilty. In the case of a gmbh the liability is limited to what is in the company. In the case of a private person their liability is limited to what they own, and what they might earn for the rest of their lives. IN other words, if a company is sued they may just choose to disappear. If they didn't have much in the way of assets it's a simple matter to liquidate, then all the directors and staff go off and form a new company and everybody is happy - except the creditors who get left holding the can.

This is exactly what happened to the company I used to work for when I first came to Switzerland - nobody went to jail or lost their personal fortunes (except for the members of staff who had been conned into buying shares).

Now if a company deals with a private person and they default on their obligations then the private person could be sued, and will only escape by declaring personal bankruptcy, not a nice choice for an individual and even then it doesn't mean you escape the obligations.

So if I were a company and I was doing business that required some form of substantial commitment I would want personal guarantees of the directors, rather than from the company.

Or is there something I am missing here?

Regarding avatars - I rotate them every few weeks to keep you guys on your toes. My current avatar was a big hit on a graphic design forum I hang out on - so sorry you guys don't appreciate it. And anyway litespeed - you don't even HAVE an avatar how about this one:

13
"As a rule, no special permit is necessary to set up a business in Switzerland, as every person fundamentally has the right to establish and operate a business "

From here:

http://www.gza.ch/default_en.asp?pgn...6/06_001en.asp

it seems that pretty much anyone can set up a business in Switzerland. You just wont be able to work for it unless you have a C/B-EU/Swiss PP, etc...

Now what I wonder is whether you can't work for the business " full-time" , or " at all" . Do you think there is anything stopping me from establishing a Gmbh and working for it part-time while still being employed full-time on a B permit with another Swiss company? (or maybe working 80% at the other company...)

14
I can't see a problem with that at all. But the main point here is why would you set up a gmbh (see points above) especially if you were working for this company part time? You would simply be getting a bit of income from other sources - Nebenerwerb. I don't see issue with that at all..

15
Ok, my case is different to that of the original poster. I want to run an internet-based business on the side but need to do this as a registered company if I am to get anything more than a few affiliate commissions. Ideally I'd work on it full-time but I think I'd have problems getting a work-permit until the business gets a decent amount of revenue. Setting it up as a GmbH and running it part-time might be good way of getting a (legal) track-record that would help me go full-time at a later date.

By the way, I'm non-EEA and I still have 6 years to wait before I could get a C-permit.

16
I started out as simply self employed - I found this to be a very expensive way of running a business in Switzerland. The only advantage is the ability to pay a larger amount into the 3rd pillar. It's practically impossible to allow anything against tax, and particularly not school fees which killed me.

Two years ago I converted to a GmbH. The process was quite simple but there are hoops to jump through. Whatever information you read on the various sites it's not until you actually want to do it for real that you find out the real requirements. As usual, it varies from Kanton to Kanton.

I used (and still use) a management company to help register the business and to keep it on the straight and narrow.

Here's a little example of what can happen - based on a real experience of an aquaintance:

His company had two directors both registered in Switzerland. One went back to the UK and de-registered from Switzerland. A few weeks later, they logged onto their CS bank account to find it locked and with^the heading "in liquidation". By one of them moving back to the UK the number of directors fell below the minimum and the liquidation was automatic. Isn't that cool? They did sort it out after a few days by appointing a Swiss nominee.

Anyway, if anyone wants more information on the process and how we achieved it I don't mind helping here or offline.

sb

17
Regarding a Gmbh company do you know the annual costs of running this type of company. (excluding profit related tax)

18
Gmbh or even AG for liability limitation and credibility. Einzelfirma for simplicity and cheapness. Its even possible to do them at the same time, which makes your mailbox bulge though....

Note that the registered share capital for a Gmbh is 20000chf, of which only 10000chf must be paid up at incorporation, but you are liable for 20000chf is the company goes bust.

For an AG, you need 100k of which 50k must be paid up. Share transfers much easier with a share company AG.

There are requirements for an AG for the majority of directors to be either swiss or EU nationals and reside in Switz.

dave

19
BUT WHY?

first thing if you are married to a Swiss, you will have a B visa, which doesnt mean you may work everywhere!!! its very, VERY unlikely that it will be refused though...

also why do you wane have a GMBH or AG? Start as an EINZELfirma and if you have huge sucess.... you can change

Also you can work for your wife!!!

Remember there will also be huge issues coming on you about insurances...

For other readers, you will get a Swiss Passport, no you MAY apply for one after 5 years in Switzerland and beeing 3 years of it married with a swiss. if you just moved to switzerland after the weeding, it means you are waiting the 5! and remember its requesting!!!!

otherwise

enjoy:

www.popcornlovers.ch

20
(Edit): Is it not true:

As a GMBH, the company is liable and not you.

As a Einzelfirma, then you are personally liable.

Depending on the business nature, it may benefit to not have that personal liability.

For example (sorry: I can only use an IT example), if working as contract DBA and you screw up, do you personally want to be liable for dropping a UBS trading server... ?

Indeed, I don't know of any Einzelforma IT contractors... they are all set up as GMBHs or employees of an agency.