Branch vs. Subsidiary in Switzerland

Branch vs. Subsidiary. Over the past few months, several clients have asked us about the advantages and disadvantages of setting up a branch or a subsidiary in Switzerland. In this post, we would like to compare the two structures and provide an overview of what needs to be taken into consideration before opening a branch or a subsidiary of your foreign company in Switzerland.

Setting up a Branch in Switzerland

-Needs to be registered with Swiss Commercial Registry.

–Does not have separate legal identity from parent company.

-The parent company will be liable for the branch office’s liabilities and activities.

-In the Swiss Commercial Registry (public information), the parent company will be shown.

-Swiss branches are treated as any other Swiss company when it comes to income tax.

-To open a branch, there is no need to deposit Share capital.

-Any public act by the branch will likely require the ratification by the board of directors of the parent company.

-Branch must have the same name as the parent company.

 

Setting up a Subsidiary in Switzerland

-Needs to be registered with  Swiss Commercial Registry.

–Does have a separate and independent legal identity from parent company.

-The parent company will not be liable for the branch office’s liabilities and activities.

-In the Swiss Commercial Registry (public information), the parent company will not be shown.

-Swiss subsidiaries are treated as any other Swiss company when it comes to income tax.

-To open a subsidiary in the form of a Ltd. entity, Share capital will have to be deposited  (min. CHF 100’000).

-Any public act by the subsidiary will not require the ratification by the board of directors of the parent company.

-Subsidiary can have a different name to the parent company.

 

When considering the type of structure you are looking to establish in Switzerland, we strongly recommend that you keep in mind the exact purpose of doing business in Switzerland.  If you are planning to deal with customers (i.e trading business), a subsidiary has more credibility and a better “image” compared to a branch. However, if you are looking to limit the independence of your structure in Switzerland, then a branch would be the better solution.

 

If you are looking for a consultation regarding you particular entity and structure, get in touch with us and we will support you in the process of establishing the right entity for your business in Switzerland.