Switzerland is located in the heart of Europe. It borders five other European countries: Germany, Austria, Liechtenstein, Italy, and France. Switzerland is a federation with 26 states (cantons). It does not have a capital city but the seat of its government and administration is Bern; other main cities are Zürich, Geneva, and Basel.
There are four official languages in Switzerland: German (which is the first language of 65.6% of the population), French (22.8%), Italian (8.4%) and Rhaeto-Roman (0.6%).
The Joint-stock company (Aktiengesellschaft) is the most common legal entity in the Swiss business environment, mainly because it allows its shareholders (owners) to remain anonymous. It is abbreviated as AG which is short for Aktiengesellschaft or SA which stands for Societe Anonyme.
These company types are mostly employed by foreign investors who want to start a medium-sized or a large corporation.
A joint-stock company is a company with a minimum share capital of CHF 100 000, divided into tradable equity interests (shares). Capital contribution can also be in kind. and the following items can be contributed:
- Equipment and machinery;
- Real estate;
- Participations and interest in other companies;
- Patents and trademarks.
A joint-stock company is liable for company debts to the extent of its business assets only. One share must have a nominal value of at least CHF 0.01 (1 centime) and at least the greater of 20% and CHF 50 000 of the share capital must be fully paid up.
Shares can be either registered or bearer. Whereas the former have the name of the shareholder, the latter protect the confidentiality of the investor and can be freely transferred. In order to issue bearer shares, all minimum capital must be paid.
The company’s supreme corporate body is the general meeting of shareholders. It has to elect the Board of Directors, whose task is to manage the business of the company. It is also possible for the Board of Directors to consist of a single person. At least one person that can legally represent the company must be residing in Switzerland on a permanent basis. Certain companies, such as international holding companies, may file an application for an exemption from this rule.
Large companies are subject to a full audit and must produce a cash-flow statement and a directors’ report.
The AG can be used for companies active in the trading, production, holding or financing businesses and can also be set up as a subsidiary of a foreign company
Switzerland consists of the Swiss Federation, 26 sovereign cantons and approximately 2,300 independent municipalities. According to the Swiss constitution, the cantons have fiscal sovereignty and full right of taxation, except for particular sources that are allotted to the federal government. The cantons’ right of taxation may also be limited by the tax treaties signed by the Swiss Federation and other states.
Although Switzerland is not an EU Member State, its VAT system was designed in line with the EU VAT Directive