Direct distribution

Ownership structures

May a foreign supplier establish its own entity to import and distribute its products in your jurisdiction?


May a foreign supplier be a partial owner with a local company of the importer of its products?


What types of business entities are best suited for an importer owned by a foreign supplier? How are they formed? What laws govern them?

The best suited and most common legal entities for an importer owned by a foreign supplier are the corporation (AG or SA) and the limited liability company (GmbH or Sàrl).

Legal entities such as corporations and limited liability companies are governed by the Swiss Code of Obligations.

The minimum share capital is 100,000 Swiss francs for the corporation and 20,000 Swiss francs for the limited liability company. The entities are established when the founding members – one founder is sufficient – declare by notarial deed that they are forming a corporation or limited liability company, adopt the articles of association and appoint the members of the governing bodies.


Does your jurisdiction restrict foreign businesses from operating in the jurisdiction, or limit foreign investment in or ownership of domestic business entities?

Swiss legal entities must be able to be represented by a Swiss resident (citizenship is irrelevant) with sole signatory power or two Swiss residents with collective signatory power. These persons are registered with the commercial register.

Additional restrictions apply with regard to real estate. The Federal Act on the Acquisition of Real Estate by Persons Abroad restricts the acquisition of real estate in Switzerland by foreigners. Nevertheless, real estate used for permanent commercial purposes, such as manufacturing or retail premises or offices, may be acquired.

Equity interests

May the foreign supplier own an equity interest in the local entity that distributes its products?

Generally, yes. Restrictions may apply if the local entity owns real estate in Switzerland.

Tax considerations

What are the tax considerations for foreign suppliers and for the formation of an importer owned by a foreign supplier? What taxes are applicable to foreign businesses and individuals that operate in your jurisdiction or own interests in local businesses?

Switzerland is a confederation of 26 cantons (states) with currently about 2,200 municipalities. A distinction is to be made between direct federal, cantonal and municipal taxes. The Swiss cantons set their own corporate tax rates. This system leads to a certain degree of tax competition between the cantons and municipalities and, therefore, to relatively low tax rates.

The Confederation, cantons and municipalities all levy taxes on the profits. For the Confederation the rate is 8.5 per cent. There are significant differences between the tax rates of different cantons and municipalities. For example, the canton of Zug offers attractive tax rates; the total tax burden on the profits (ie, including federal, cantonal and municipal taxes) amounts to less than 15 per cent.

All cantons levy taxes on the equity. Here again, there are significant differences between the tax rates of different cantons and municipalities. In the canton of Zug, the tax rate on the equity amounts to less than 1 per thousand.

Furthermore, companies whose turnover exceeds the threshold of 100,000 Swiss francs per year are usually subject to value-added tax (VAT) and must therefore register with the Federal Tax Administration. The ordinary VAT rate is 7.7 per cent. A reduced VAT rate of 2.5 per cent applies to goods such as foodstuffs, pharmaceuticals or print products (books, newspapers, journals, etc).

Dividends paid are subject to a 35 per cent withholding tax. Swiss residents will be able to obtain a full refund of the withholding tax. Shareholders residing outside of Switzerland can receive relief from Swiss dividend withholding tax insofar as this is provided for in a double taxation treaty.

There is no specific transfer pricing legislation in Switzerland and there are no particular documentation requirements in this respect. Nevertheless, general Swiss tax law provisions require that transactions among related parties must be at arm’s length and commercially justified.

Law stated date

Correct as of

Give the date on which the information above is accurate.

11 January 2021.