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Freelancing in Switzerland: What foreign nationals need to know

Whatever industry you are in, you might be tempted to use your skills and abilities as a freelancer. These are some of the rules you need to comply with in Switzerland.

Published: 5 November 2021 08:59 CET
Updated: 4 October 2022 13:14 CEST
There are some rules freelancers in Switzerland must comply with.
Whether you freelance from your home, a rented office, or out in the open, you must follow some rules. Photo by George Milton from Pexels

Before covering the rules and regulations of freelancing, one question that many people may ask is whether there is a difference between freelancing and self-employment.

Both fit under the category of  “independent workers” or “independent contractors”, but the lines between the two can be a bit murky.

All freelancers are self-employed, but not all self-employed people are freelancers. The latter usually have more structured business models, while the former are more “free” in their activities (hence the term “freelancer”), handling multiple projects and clients at once, often without the need for a physical office.

Legally speaking, however, both are pretty much the same.

What rules should you follow if you are foreigner?

If you hope to get a visa or a work permit to work as a freelancer in Switzerland, that is not going to happen. As many Swiss residency permits are tied to an employer, moving to Switzerland in order to become a freelancer will not confer a work permit. 

You can become a freelancer only if you are already living in the country, with a legal status that allows you to work here, which usually means either a C or B permit.

Do you have to officially register as a freelancer?

This is where another difference between being a self-employed entrepreneur and a freelancer lies.

The so-called sole proprietorship commercial registration is required only when the annual income from a business exceeds 100,000 francs, which some small, owner-operated businesses may earn, but most freelancers can only dream of.

If, however, you are lucky enough to make that much money, you must register here.

For all the other one-person businesses, registration is optional.

However, you do have other obligations as a freelancer. These are the regulations you must comply with:

Taxes

Even if your income is sporadic, you should keep detailed record of all your earnings and business-related expenses, which you will need to declare for tax purposes.

Keeping records for your taxes is a must for a freelancer. Photo by Recha Oktaviani on Unsplash

If you have a high volume of clients and income, this site can help you manage your accounting.

The amount of taxes you have to pay will depend on your income and the canton where you live.

You can find more information about how to file taxes as a freelancer here.

READ MORE: What freelancers in Switzerland need to know about paying tax

Social security

You have received your social security (AHV / AVS) number when you moved to Switzerland and you have automatically become affiliated with your cantonal compensation office.

Making social security contributions at a maximum rate of  9.7 percent of your income is a must as well.

This is a requirement even if you are in Switzerland temporarily; if you leave the country before you retire, you will receive old-age payments proportional to your contributions even if you live abroad.

Insurance

You must take out a compulsory health insurance policy, including, if you are self-employed, accident coverage.

And if you rent an office, you also need to get a personal liability insurance (Haftpflichtversicherung / responsabilité civile / la responsabilità civile) to cover any damages you may inadvertently inflict on the rented space.

READ MORE: What is Swiss liability insurance and do you need it?

Do you actually need an office?

While some freelancers like to have a physical space to work in, others prefer to work anywhere with decent wi-fi connection.

This kind of work / lifestyle has given rise to the term “digital nomads” — people who are not tied down to any one physical or geographical location, but work from wherever they happen to be.

You can find our more about this growing trend here:

Working remotely from Switzerland: What are the rules for foreigners?

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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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