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Swiss Offshore Companies

Foreign investors can implement one of many corporate company forms depending on their legal, tax and administrative requisites. The Swiss companies structures are differentiated by the corporate and legal framework, and can exist as branches, partnerships, limited liability companies and stock corporations.

To date, the Swiss Stock Corporation is the most incorporated company in Switzerland. It is a Swiss offshore company that is comparable US and UK public limited companies (PLC) and its advantage as a limited liability company is one of the main reasons for this Swiss company’s popularity.

Swiss companies can benefit from tax privileges, if the company takes on one of the five main stock corporations. Stock Swiss corporations are subject to restrictions on the activities as specified by the adopted form.

  1. A Holding Company must derive most of the income from subsidiaries, or hold at least 50-66% of the subsidiary’s shares.
  2. A Domiciliary Company (version of Swiss offshore company), must have a limited presence in Switzerland, and must be totally foreign owned and controlled; it cannot have any offices or staff in Switzerland. All of its business is offshore and it can only receive foreign income. This type of Switzerland Stock Corporation has to appoint a registered office in Switzerland and because of its setup. This Swiss corporation has tax benefits and is exempt from corporate income and capital gains.
  3. The Auxiliary Company is essentially a Domiciliary company that may conduct some part of its business outside of Switzerland. The company may have Swiss offices and staff. Most of the income is generated outside of Switzerland and this Swiss company from can have a limited amount of business in Switzerland from which some revenue is generated. Auxiliary companies are not exempt from corporate income tax. Overall, Swiss income is taxed at 5% whereas foreign-sourced income is tax exempt.
  4. Service Companies can be active only within their own groups. Services Companies provide a specific group of foreign companies with financial, technical, marketing and management services. Income is only be generated from companies within the special group of foreign companies that the service company was formed to serve. A Service company may not derive income from third parties (i.e. companies outside their corporate group). At a federal level, all corporate income for service companies is taxable. At a cantonal and communal level corporate tax rates are adjusted according to the nature of the services provided. Generally, the yearly taxable profit is approximately 8.5% of the payroll or 5%-20% of overheads.
  5. The Mixed company is a stock corporation that combines the restrictions and features of the Domiciliary and the Service Company, but does not qualify as either. As long as 20% or less of its income comes from Switzerland, or alternatively, 80% and more of all income coming from oversea; the amounted of business conducted in Switzerland is limited; the company has close working relations with other foreign entities, then the mixed company may pay reduced tax or be totally exempt. At federal levels, no tax exemptions are granted.

The main characteristics and features of the Swiss Stock Corporation are:

There are no restrictions on foreign ownership of Switzerland companies and the assets of a Switzerland stock corporation are separate from the personal assets of the company’s owners. A Swiss stock corporation is capable of entering into contracts, pursuing legal proceedings and transacting as an individual.