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WORKING IN SWITZERLAND

EXPLAINED: How to register as self-employed in Switzerland

If you already have the right to live in Switzerland and are looking to go freelance, registering as self-employed is usually a straightforward process.

Published: 31 January 2024 10:16 CET
EXPLAINED: How to register as self-employed in Switzerland
How to register as self-employed in Switzerland? Photo by Marvin Meyer on Unsplash

Swiss residents and most EU/EFTA nationals can register as self-employed by applying through their cantonal compensation office.

You aren’t required to register immediately, as you will be asked for proof of self-employment such as invoices and marketing materials, but it is recommended to do so within a few months to become officially recognised.

Once your compensation office has verified your self-employed status, you can then contact your local migration office to register your self-employed status.

The process differs depending on where you live, however you’re likely to be asked to provide the following during the process:

  • Identity card or passport
  • Invoices and contracts for services
  • Bank statements
  • Proof of health insurance
  • Advertising/marketing materials
  • Confirmation of registration with the compensation office

If your permit is dependent on a partner, for instance, they may be asked to sign a letter confirming your address. If your application is approved, you will be issued a renewable five-year B permit.

If your annual turnover is more than 100,000 francs, you must also register for VAT and enter your company on the commercial register.

Those from a non-EU/EFTA country may be required to hold a C permit or be the spouse of a C permit holder or Swiss citizens to apply to be self-employed. Otherwise, you may need to apply with the canton and provide more information about your business to prove you meet stricter Swiss labour market requirements.

Being a citizen of a ‘third-country’ (non-EU/EFTA) doesn’t exclude you from setting up a business in Switzerland, but conditions for doing so are stricter as you must demonstrate that your self-employment will have a positive impact on the Swiss labour market and is in overall economic interest.

As a result, you may be asked to provide a business plan and an analysis of the market, as well as planned investments and forecasts for turnover and profit.

There are also rules and processes you should be aware of when filing your first tax return as a self-employed person in Switzerland, such as social security contributions, setting off depreciation and amortisation costs, and deductible interest.

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For members

WORKING IN SWITZERLAND

The pitfalls of Switzerland’s social security system you need to avoid

In most cases, Switzerland’s social benefits system functions well. But there are also some loopholes you should know about.

Published: 24 April 2024 13:37 CEST
The pitfalls of Switzerland's social security system you need to avoid

The Swiss social security system has several branches: old-age, survivors’ and disability insurance; health and accident insurance; unemployment benefits, and family allowances.

This is a pretty comprehensive package, which covers everyone who pays into the scheme for a wide variety of ‘what ifs’.

As the government explains it, “people living and working in Switzerland benefit from a tightly woven network of social insurance schemes designed to safeguard them against risks that would otherwise overwhelm them financially.” 

But while most residents of Switzerland are able to benefit, at least to some extent, from this system, others don’t.

What is happening?

If someone becomes ill or has an accident, Switzerland’s compulsory health insurance and / or accident insurance will cover the costs.

However, a prolonged absence from work can become costly.

That is especially the case of people employed by companies that don’t have a collective labour agreement (CLA), a contract negotiated between Switzerland’s trade unions and employers or employer organisations that covers a wide range of workers’ rights. 

READ ALSO: What is a Swiss collective bargaining agreement — and how could it benefit you?

It is estimated that roughly half of Switzerland’s workforce of about 5 million people are not covered by a CLA.

If you just happen to work for a company without a CLA, your employer is not required to pay your salary if your illness is long.

You will receive money for a minimum of three weeks – longer, depending on seniority — but certainly not for the long-haul.

You may think that once your wages stop, the disability insurance (DI) will kick in.

But that’s not the case.

The reason is that DI can be paid only after a year after the wages stop. In practice, however, it sometimes takes several years of investigations and verifications to make sure the person is actually eligible to collect these benefits, rather than just pretending to be sick. 

In the meantime, these people have to use their savings to live on.

What about ‘daily allowance insurance’?

Many companies (especially those covered by a CLA) take out this insurance, so they can pay wages to their sick employees for longer periods of time.

However, this insurance is optional for employers without a CLA is place.

As a result, small companies forego it because it is too much of a financial burden for them.

And people who are self-employed face a problem in this area as well: insurance carriers can (and often do) refuse to cover people they deem to be ‘too risky’ in terms of their age or health status.

Critics are calling the two situations —the length of time it takes for the disability insurance to kick in and gaps in the daily allowance insurance—”perhaps the biggest failures of the social security system.”

Is anything being done to remedy this situation?

Given numerous complaints about the unfairness of the current system, the Social Security and Public Health Commission of the Council of States (CSSS-E) will look into the “consequences of shortcomings and numerous dysfunctions in long-term illness insurance.”

But not everyone in Switzerland sees a problem in the current situation.

According to the Swiss Insurance Association (SIA), for instance, “making daily sickness allowance insurance compulsory for employers would not have the desired effect. Due to false incentives, it would only exacerbate the upward trend in costs and premiums.”

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