swiss support logo edit

Tax Benefits of Setting Up a Business in Switzerland

Switzerland is renowned for having an environment that is conducive to business, drawing businesspeople and investors from all over the world. The country’s advantageous tax structure is one of the major factors contributing to this reputation. This article will go over the tax benefits of incorporating a business in Switzerland and how your business can take advantage of them.

Tax benefits in switzerland

Swiss favourable corporate tax rates

Among the lowest in all of Europe are Swiss corporate tax rates. In contrast to cantonal and municipal rates, federal corporate tax rates are the same across the nation. Depending on the canton and municipality, Switzerland’s combined effective corporate tax rate typically ranges from 12% to 24%. This tax environment is competitive, which can help your company save a lot of money.

Tax benefits for holding companies

For holding companies, Switzerland offers enticing tax advantages. At least two-thirds of the company’s
assets must be held in the form of long-term investments in subsidiary businesses, or receive dividends from subsidiary companies for at least two-thirds of its revenue.

Swiss holding companies pay a lower capital tax rate and are not subject to the cantonal or municipal
corporate income tax. Multinational corporations and groups may benefit greatly from this tax system

Participation exclusion

Switzerland applies a participation exemption to dividends and capital gains that Swiss companies receive
from their permissible investments in other businesses. The total amount of taxes owed on the income from these investments is greatly decreased by this exemption.

An appealing IP tax regime

Companies engaged in the creation, administration, and exploitation of intellectual property (IP) rights can take advantage of Switzerland’s advantageous tax laws. Many cantons offer tax relief on earnings from patents, trademarks, and other intellectual property rights.

R&D incentives

By offering various tax incentives, such as deductions for R&D expenses and tax credits for R&D
investments, Switzerland promotes research and development (R&D) activities. These incentives may enable your business to pay less tax while making growth and innovation investments.

Double taxation treaties

Due to Switzerland’s extensive network of double taxation agreements with more than 100 nations, income earned by Swiss companies abroad is not subject to double taxation. These agreements can lower your company’s global tax exposure and increase your company’s post-tax profits.

VAT system

Compared to other European nations, Switzerland has a relatively low Value Added Tax (VAT) rate. The
standard VAT rate is 7.7%, but there are reduced rates of 3.7% for the hospitality sector and 2.5% for
essentials. For both your company and your clients, this could mean cost savings.

Numerous tax benefits are available to businesses that incorporate in Switzerland, and these benefits can
have a big impact on your organization’s bottom line. Your Swiss company can gain a competitive edge in
the international market by being aware of and utilizing these advantages.

Our team of specialists at LEGTAX is available to assist you if you need help navigating the Swiss tax
system. According to the requirements of your company, we offer complete tax planning and consulting
services. Get in touch with us right away to talk about how we can help your Swiss business venture.

You might be also interested

Get a free consultation

Let us contact you to discuss your questions and provide you a tailored quote.