Switzerland attracts companies from all over the world – Zug and Zurich are particularly popular. A branch office in these locations can bring many advantages, but there are also some important considerations to bear in mind. In this article, we provide clarifications and answer the most important questions about branch offices in Switzerland.

The essentials in brief

• A branch office is a legally dependent part of a company that is physically separate from the main branch but does not have its own legal personality.
• In Switzerland, a branch office must be entered in the commercial register, requires a local business address and is legally and economically dependent on the parent company.
• A branch office allows the business to expand without having to set up a new company and does not require any minimum capital. However, the parent company is liable for liabilities and there is a dependence on the main company.
• The branch is subject to Swiss tax legislation, with the cantons of Zug and Zurich being particularly attractive due to their business-friendly tax policies.

1. What is a branch office?

A branch office is a legally dependent part of a company that is physically separate from the main branch. It carries out business activities under the name and for the account of the parent company. A branch office does not have its own legal personality – but can enter into contracts, issue invoices and participate in business transactions on behalf of the parent company.

2. What distinguishes a branch office?

• Independence and dependence
  Although a branch office can operate independently, it remains legally and economically dependent on the parent company. It is bound by its instructions and often shares resources such as personnel, technology and capital with the head office.
• Registration and commercial register
  In Switzerland, you must enter your branch office in the commercial register. This registration serves the purpose of transparency and allows third parties to obtain information about the branch and its connection to the parent company.

Tip: Various documents are required for registration, including proof of incorporation of the parent company abroad, a certified copy of the articles of association and proof of appointment of the branch management.

• Local business address
  A physical address in Switzerland is required to open a branch. This address serves as the official registered office of the branch office and must be entered in the commercial register.
• Liability and legal responsibility
  The liability of a branch office lies with the parent company, which is fully responsible for all liabilities. The management must therefore ensure that all local laws are complied with, in particular with regard to taxes, labour law and data protection.

3. What advantages does a Swiss branch offer?

• Expansion without founding a new company: A company can expand its business into new regions without setting up a completely new company. This saves time and effort.
• No minimum capital required: As a rule, no additional capital is required to establish a branch as it is part of the existing company.
• Economic independence: Within the framework specified by the main company, the branch can make its own business decisions and adapt to local market conditions.

4. What advantages does a Swiss branch offer?

• No legal independence
  The branch office is not legally separate from the main company. This means that the main company is liable for all liabilities and risks of the branch.
• Administrative expenses
  The establishment and operation of a branch office requires administrative steps such as entry in the commercial register and disclosure of business activities and responsible persons.
• Dependence on the main company
  The strategies and decisions of the branch are often heavily dependent on the main company, which can limit its flexibility.

5. What about accounting?

Although a branch office is part of a foreign company, it must keep its own accounts. The accounting must comply with Swiss standards – this can be a challenge for companies that are not familiar with these regulations. A local accountant or trust company can be a worthwhile investment to save on bookkeeping and ensure compliance.

6. What taxes apply to a branch office?

The branch is subject to Swiss tax legislation. This includes both direct taxes (e.g., profit tax) and indirect taxes (e.g., VAT). The exact tax burden depends on various factors, including the type of business activity and the location of the branch. Special tax regulations such as the holding privilege can be applied in certain cantons and offer tax benefits.

7 Why are Zug and Zurich suitable locations?

The cantons of Zug and Zurich are known not only for their picturesque landscapes and high quality of life, but also for their business-friendly tax policies. This makes them attractive locations for founding a branch. Both locations offer low tax rates for companies. This can lead to considerable tax savings – especially compared to other international locations.

Tip: The choice of location can depend on various factors – for example, the proximity to customers, business partners or specific industry clusters. In principle, both Zug and Zurich are an excellent choice.

8. What else should I consider?

• Compliance with industry regulations:
  Depending on the industry, specific regulatory regulations may apply to your branch office. For example, financial service providers, pharmaceutical companies and food producers are subject to strict regulations. Make sure that you know and comply with the relevant regulations.
• Data protection and data security:
  Switzerland has strict data protection laws that regulate the handling of personal data. Your branch office must ensure that it complies with these laws, especially when collecting and processing data about customers, employees or business partners.
• Labour law requirements:
  Swiss labour law sets requirements for employment contracts, working hours, wages and other working conditions. It is important that your branch office complies with these regulations in order to avoid legal disputes.

Important: As already mentioned, the parent company is liable for the liabilities of the branch. This means that creditors can access the parent company’s assets in the event of legal disputes. It is, therefore, important that companies carefully weigh up the risks and take legal protective measures if necessary.

Final remarks

In Switzerland, a branch office is considered part of a foreign company. It must be entered in the commercial register and requires a local address. For companies, a branch office in Switzerland can offer many advantages – especially in Zug and Zurich. But be careful: thorough planning and compliance with local laws and regulations are essential. Please contact us to discuss your branch in Switzerland with experts and set it up without any complications.