Sole Proprietorship

What is Sole Proprietorship

A sole proprietorship (Einzelfirma in German, entreprise individuelle in French, ditta individuale in Italian) is a business structure in Switzerland owned and operated by a single individual. It is the simplest form of business entity, often chosen by freelancers, self-employed professionals, and small business owners

Registration and Legal Requirements

A sole proprietorship does not require minimum capital and is relatively easy to set up. If the annual revenue exceeds CHF 100,000, registration in the Swiss Commercial Register (Handelsregister / Registre du commerce) is mandatory. However, even businesses with lower revenue can voluntarily register to enhance credibility. Additionally, all sole proprietors must register with the Swiss social security system (AHV/AVS) to contribute to pension and insurance funds. VAT registration is required if the annual turnover exceeds CHF 100,000.

Liability and Taxation

A sole proprietorship is not a separate legal entity from its owner, meaning the proprietor is personally liable for all debts and obligations. Business income is taxed as personal income, which may lead to higher tax rates depending on earnings. However, there is no double taxation, as the business is not taxed separately.