Self-employed in Switzerland as a foreigner: tips
Self-employed in Switzerland: what rules apply to foreigners? Which insurances do you need? Comparis explains what you need to know.
18.04.2024
iStock/DRS Producoes
1. Self-employed in Switzerland: what does it mean?
Being self-employed means you participate in commercial transactions with the intention of making a profit at your own risk. The following applies:
If you are self-employed, you act under your own name on your own account. You appear externally under your company name. You issue invoices for your work.
You bear the costs and risk of loss associated with being self-employed. This means that if your company is not profitable, you cover the loss with your own money.
You work for several different clients. You are not financially dependent on one single client.
According to SVA Aargau (the cantonal social insurance institution), the following legal structures are considered as self-employment:
The situation is different if you establish a limited liability company (LLC) or stock corporation. In this case, you are considered an employee of your company.
When do I qualify as self-employed in Switzerland?
The OASI office determines your self-employment status. This means it checks whether you meet the criteria for self-employment. If you are considered self-employed in Switzerland, you must pay social security contributions.
The OASI office usually also takes the following criteria into account in its assessment:
Significant investments made: for example, you need to buy your own work laptop. Nobody gives you one.
You have your own business premises. This can also be an office at your home.
You have employees.
You choose your own working conditions. This includes when and where you work.
You are subordinate to no-one – not even your clients.
You don’t have to meet all the criteria to be considered self-employed in Switzerland.
Bogus self-employment
Bogus self-employment means you are actually under the authority of an employer. Example: you are employed by a company for a project, but you have to be in the office at fixed working hours.
In the case of bogus self-employment, your relationship to the employer is similar to that of employees. However, you do not have the same social and legal protections.
In the case of bogus self-employment, you can take action against your employer. This allows you to claim your rights. It’s worth taking out legal protection insurance.
2. Self-employed in Switzerland as a foreigner: do I have to register?
Like employees, self-employed people must register in Switzerland. For citizens from EU/EFTA states, there are different reporting requirements when taking up self-employment. They are based on the duration of activity in Switzerland.
You just need to complete this online form (registration required). You usually have to do this at the latest eight days before starting work.
Would you like to do business in Switzerland in the long term? Then you must submit an application for self-employed activity to the Cantonal Migration Office.
Upon proof of self-employment, you are entitled to a residence permit. You will receive this when you have successfully registered with your municipality of residence.
Do you already live in Switzerland and have a B (EU/EFTA) permit? If so, you can take up self-employment at any time. If you change from being employed to being self-employed, you must report this to the relevant residents’ registration office.
Becoming self-employed in Switzerland as a citizen of a third country
Are you from a non-EU/EFTA country and would like to become self-employed? You can only do this in the following situations:
You already have a C residence permit.
You’re married to someone with a C residence permit.
You’re married to a Swiss citizen.
As a citizen of a third country with a B permit, you normally cannot become self-employed.
When do I have to register as self-employed in Switzerland?
People who are self-employed in Switzerland are subject to VAT once they earn over 100,000 francs per year. From 100,000 francs turnover per year, self-employed people must register as a sole proprietorship in the commercial register. However, you can also register voluntarily before reaching this threshold.
3. Important duties when you’re self-employed in Switzerland
People who are self-employed in Switzerland have to take care of pensions and insurance themselves. The same applies to social security payments.
OASI/DI registration
The two following insurances are compulsory for the self-employed in Switzerland:
You must register for these. Unlike employees, self-employed people are responsible for paying all their social insurance contributions themselves.
Note: when you’re self-employed, you’re not entitled to unemployment insurance benefits (ALV).
Family Allowances Office
As a self-employed person, you must register with the Family Allowances Office of your canton. You then pay family allowances on any income subject to OASI.
The contributions vary depending on the canton and the Family Allowances Office. However, you only pay family allowances for the part of your income that does not exceed 148,200 francs.
Taxes
As a self-employed person with a sole proprietorship, you pay your taxes via private tax return. This means you indicate your company’s income on your tax declaration.
Note: if you are self-employed and have a B permit, you must also complete a tax return. You do not pay withholding tax.
4. Important insurances if you’re self-employed in Switzerland
There are some mandatory insurance policies if you are self-employed – especially if you employ staff.
Compulsory insurance for self-employed people
You must make contributions to the loss of earnings compensation scheme (EO/MSE). This finances, among other things, maternity and paternity leave allowances. In addition, it covers loss of earnings during military service.
Everyone resident in Switzerland must take out a basic health insurance policy with a health insurer.
You are, however, free to choose which health insurance company you use. The cover offered under basic insurance is the same irrespective of provider.
However, the cost of basic insurance can vary greatly. It’s therefore a good idea to compare health insurance policies before making your choice.
If you employ staff, you must take out occupational accident insurance. For those employed at least eight hours a week, you must also take out non-occupational accident insurance.
Self-employed people can insure themselves against accidents privately with health insurance or through their company.
If you have staff, you may need to insure their occupational pension. This applies to employees with an annual salary of more than 22,050 francs (as of 2024).
Professional liability insurance insures you against damage caused by your professional activity. Professional liability insurance is mandatory for some types of professionals. These include doctors and architects, for example. It is voluntary for other professions.
Voluntary insurances for self-employed people in Switzerland
Self-employed people can voluntarily take out accident insurance. This way, you can also insure any family members who work with you, and who are not subject to mandatory accident insurance. The protection of voluntary accident insurance goes beyond that of mandatory insurance.
These insurance policies cover hospital and treatment costs, among other things. It also covers a daily accident allowance of 80% of the insured salary. In addition, you will receive a lifelong disability pension in the event of disability.
Basic health insurance covers treatment costs in the event of illness. However, self-employed people are responsible for organizing the continuation of their pay.
Daily sickness benefits insurance provides this cover. The allowance is paid from the start of your illness until you are eligible for disability insurance payments (after a period of two years).
Self-employed people are liable for damages arising in connection with their professional activity. That's why business liability insurance makes sense. You can also take out business legal expenses insurance to protect against the financial impact of unjustified claims.
If your business has its own premises, you’ll need insurance cover against:
Theft
Glass breakage
Fire and water damage
Damage to buildings or equipment could also force you to stop trading temporarily. To protect against such events, self-employed people can consider taking out a business interruption insurance policy.
There are also special machine and IT insurances available. These cover, for example, damage to technical equipment and computer systems.
If you’re self-employed in Switzerland, you’re responsible for arranging your own pension. The state pension is only enough to keep you out of poverty. To maintain a comfortable standard of living, you’ll need additional retirement savings.
As a self-employed person, you can make voluntary contributions to the 2nd pillar. Your yearly income must be at least 22,050 francs (as of 2024).
As an alternative to the 2nd pillar, there is the option of paying up to 20% of your income per year (or a maximum of 35,280 francs as of 2024) into a tax-efficient restricted pillar 3a pension account.
This article was first published on 15.06.2009
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