How to Register a Business in the US from Switzerland

Step 1: Benefits of starting your US business from Switzerland

Starting a US business from Switzerland offers numerous advantages, creating a strategic bridge between two thriving economies. Switzerland's highly skilled workforce, known for its excellence in innovation and quality, provides a robust foundation for launching a business aimed at the vast US market. Benefiting from a stable economic environment, Swiss entrepreneurs can focus on leveraging their expertise and advanced technological capabilities to meet the diverse needs of American consumers. This synergy not only enhances the potential for rapid growth but also ensures that the products or services introduced will be of the highest standard.

Moreover, Switzerland's favorable business climate, characterized by competitive tax rates and a strong network of international trade agreements, provides an optimal setting for managing operations efficiently. Entrepreneurs can take advantage of Switzerland's exceptional infrastructure, renowned for its reliability and efficiency, to streamline their business processes and ensure seamless communication with US partners. By combining the strengths of both economies, Swiss entrepreneurs can maximize their reach, attract global investors, and achieve sustainable success in the competitive US market.

Step 2: How to start your US business from Switzerland

Starting a US business from Switzerland involves several key steps. Firstly, you should consider the type of business entity that best suits your needs, such as a Corporation (C-Corp or S-Corp) or Limited Liability Company (LLC). Each entity type has its own regulatory and tax implications, so it's crucial to research what aligns with your goals. Furthermore, you will need to select a state in which to incorporate, as each state has different laws, filing fees, and tax rates. Popular states for incorporation include Delaware, Nevada, and Wyoming, due to their business-friendly regulations.

Once you have chosen your business entity and state, you have to register your business with the appropriate state authorities. This usually involves filing certain documents like the Articles of Incorporation for a corporation or Articles of Organization for an LLC. Additionally, you will need to appoint a registered agent, who will act as a contact point in the US for your business. To conduct business in the US, it's also essential to obtain an Employer Identification Number (EIN) from the IRS. This can be done online and is crucial for tax reporting and opening a US bank account. Opening a bank account may require visiting the US in person, but some banks offer services to international clients that allow for remote account opening.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Switzerland

Understanding Compliance Requirements for Running a US Business in Switzerland

Operating a US business in Switzerland offers diverse opportunities, but it also involves navigating through a maze of compliance requirements. These guidelines are essential to ensure your business adheres to both Swiss and US regulations. Below are some key considerations to help you understand these compliance needs.

Legal Structure and Registration

Choosing the appropriate legal structure is the first step. Common structures include:

• Branch Office: This allows a US company to conduct business in Switzerland without forming a separate legal entity.
• Subsidiary: This is a separate legal entity that may offer more flexibility and limited liability.

Registering your business with the Commercial Register is mandatory, and you may also need to comply with Cantonal regulations, which can vary.

Tax Compliance

Understanding the tax implications is crucial. Key areas include:

• Corporate Tax: Switzerland has varied tax rates across its cantons. Federal, cantonal, and municipal taxes will apply.
• Value Added Tax (VAT): If your annual turnover exceeds CHF 100,000, VAT registration is mandatory.
• Double Taxation Treaty: The US-Switzerland treaty can help avoid double taxation, but requires thorough understanding and proper documentation.

Employment Law

Swiss employment laws differ from American regulations. Consider the following:

• Labor Contracts: Contracts should comply with Swiss norms, addressing salary, work hours, and termination procedures.
• Social Security: Employers must contribute to social insurance programs, including old-age, survivors, and disability insurance (AHV/IV).
• Work Permits: Expats will need appropriate visas and work permits.

Data Protection

Compliance with data protection laws is critical:

• Swiss Data Protection Act (DPA): Understand its provisions and ensure data handling practices align.
• General Data Protection Regulation (GDPR): GDP guidelines may apply if handling EU citizens' data.

Maintaining transparency and obtaining consent for data processing are pivotal practices.

Financial Reporting and Auditing

Swiss laws require adherence to specific financial reporting standards:

• Swiss GAAP FER or IFRS: These standards guide the preparation of financial statements.
• Auditing: Smaller businesses may be exempt from mandatory audits, whereas larger entities will need to comply.

Thoroughly understanding these compliance requirements can significantly ease the process of running a US business in Switzerland. Consulting with legal and financial experts familiar with both jurisdictions can further safeguard your business against potential compliance risks.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Switzerland

Understanding Tax Obligations for US Businesses in Switzerland

Running a US business in Switzerland offers a blend of opportunities and responsibilities. Among the most critical aspects to understand are the tax obligations that arise. This article outlines key considerations to help business owners navigate the tax landscape.

1. Different Tax Jurisdictions

Switzerland’s tax system operates on federal, cantonal, and communal levels. Businesses must comply with requirements from all three. Here are some central points to consider:

• Federal Taxes: The main federal tax impacting businesses is the direct federal corporate income tax.
• Cantonal and Communal Taxes: Each canton and commune may levy additional taxes. The rates and rules can vary significantly across regions.
• Tax Rates: Generally, corporate tax rates range from around 12% to 24%, depending on the canton.

2. Double Taxation Avoidance

The United States and Switzerland have a tax treaty that aims to prevent double taxation. This treaty has implications for:

• Dividend Payments: Reduced withholding tax rates for dividends, potentially lowering personnel and entity tax burdens.
• Foreign Tax Credits: US businesses can usually offset Swiss taxes paid against their US tax obligations.

3. Value Added Tax (VAT)

Similar to the US sales tax, Switzerland imposes a Value Added Tax (VAT) on goods and services. Important considerations include:

• VAT Registration: Businesses must register for VAT if they exceed the annual turnover threshold.
• VAT Rates: Standard VAT rate is 7.7%, with reduced rates for certain goods and services.
• Filing Requirements: Regular VAT reporting and payments are mandatory to remain compliant.

4. Employment Taxes

If you employ staff in Switzerland, understanding employer obligations is crucial:

• Social Security Contributions: Employers must contribute to AHV/AVS (old age and survivors insurance), ALV (unemployment insurance), and other mandatory insurances.
• Payroll Taxes: Accurate payroll tax withholding, including income tax and social security from employee salaries, is essential.

5. Transfer Pricing

Transfer pricing rules are designed to ensure that transactions between related entities are conducted at arm’s length. Key points include:

• Documentation: Maintaining thorough documentation to substantiate pricing methods and intercompany transactions is imperative.
• Compliance: Following the Swiss Federal Tax Authority guidelines and global OECD standards is necessary to avoid penalties.

In summary, navigating tax obligations in Switzerland involves a thorough understanding of federal, cantonal, and communal requirements, leveraging tax treaties, and ensuring compliance with VAT, employment taxes, and transfer pricing regulations. Consulting with tax professionals familiar with both US and Swiss tax laws can facilitate a smoother experience for your business operations in Switzerland.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country