I am going to use this same topic for my own question (yes, I read several topics in the forum already about self-employment but still not sure what is my best option to be honest).
Moved to Switzerland one month ago, got a B permit so valid for 5 years.
I have a full-time employment in Zürich (but allowed to have side projects also, no problem). I come from a Scandinavian country and still have what you would probably call "einzelfirma" there, so a one person company to invoice my clients through and I was personally responsible for the company assets etc (so not like a GmbH). My small company there is VAT registered also, just for some tax deductions = I purchase equipment I use for work, do some business trips etc.
I need to keep a way to invoice my clients for the small side projects I do (there are more than one client per year, and at the moment none of the companies I do the projects for are located in Switzerland either = it is freelancing, IT / media industry). They can not just pay to my personal bank account or Paypal, they need an invoice from me.
What is my best option? Einzelfirma? Or GmbH (I know I would need 20K CHF to start one, but possibly I could "sell" my car to the company at start-up (I need the car for that work) and that way avoid to have to put out 20K CHF cash = there are ways around it)? Or some other option?
Because I live in Switzerland 365 days a year from now on I do not think it is a good option to keep the Scandinavian company, I think I will get in trouble with taxation at some point if I live and work in Switzerland but then have a "side project" in another country... or? Would be no problem to keep the company as it is now, I still have an address there I can use for it, but to be honest already for the lower taxes Switzerland has to offer it would make sense to move all my business here and not keep anything in my old home country.
That part-time side project does not generate over 100K CHF a year by the way, more like a few thousands a month extra at the moment, but it is still a source of income and a good extra on top of my normal salary here.
What do you suggest I do, has anyone been in the same situation?
If you declare the income on your tax return , you will be asked to show you registered for AVS. You only need 1 customer to be part time self employed.
Yes obviously I have to pay AVS / other fees for running company (do it the right way), and also I probably lose the rights to any unemployment money if I have the side company. But it is a risk I am willing to take if that is my only option, because I really need to be able to invoice some companies I work with. I could also start invoicing my current employer through this company instead of taking out salary from them separately, an option I might look at in future if it makes more sense.
But actually not sure what makes financially more sense - to be employed by a Swiss company AND have a personal side business, or just have my own company and let all money flow in to that from all work I do (and choose how much I take out in salary, more than half from what I earn would anyway be left on the company bank account for business expenses and future purchases/saving money).
An einzelfirma is just self employed , nothing more, your only part some self employed so no issue with unemployment benefits. You can do self employed part time work when unemployed.
Your main question is if you should have an "Einzelfirma" or a "GmbH" and that is not an easy one. You should consider the following factors:
- Risk: As in your old country, you are fully liable with a single owner company with your private assets. Depending on your private situation (spouse, kids etc.) and the riskyness of your business activities that might be no problem or undesirable.
- Cost: A GmbH brings higher costs (registration, bookkeeping etc.) than a single owner company.
- Tax: A GmbH is a capital company which introduces taxation on an additional level (company gains are taxed and your income when you take it out of the company in the form of salary or dividends). However, the tax on dividends if you own the whole company is reduced and owning the company gives you timing flexibility on when to pay yourself dividends, therefore enabling you to smooth your position on the tax curve over the years.
Summing up, with the limited information that I know about your situation I would probably opt for the GmbH to have a clear separation of private and professional income / expenses as well as limited risk. You can easily bring your car into the company instead of cash. Question is if the current value of the car is actually worth CHF 20'000. Exactly because of these questions, the creation of your company has to be audited if you bring assets into the company and not cash.
Regarding your former company, you could also still use it to carry out your activities. As you say yourself, the taxation is questionable. Probably this entity would be considered to be domiciled in Switzerland for tax purpose since all material business decisions are carried out by you from here. Also, it might generate other cross-border questions (VAT etc.)
Also to note based on your situation:
As soon as you have more than CHF 100'000 in VAT-relevant income you will have to register with the VAT authority and comply with VAT law / filings.
Also from that perspective having a decent book-keeping in place as you need it with a GmbH makes probably sense.