1. Introduction
Switzerland boasts a modern market economy characterized by low unemployment, a highly skilled labour force, and one of the highest per capita GDPs in the world. Its economy is driven by a highly developed service sector – particularly financial and insurance services – and a manufacturing industry focused on high-tech and knowledge-based production. With its strong economic and political stability, transparent legal system, advanced infrastructure, efficient capital markets, and low corporate tax rates, Switzerland ranks among the most competitive economies globally.
Lelex AG is a Swiss boutique law firm based in Zurich with a strong focus on workplace law, providing a full range of employment law services for businesses and individuals both nationally and internationally, including social security, data protection, immigration and employment litigation. The team consists of seasoned lawyers who have accumulated years of experience with business law firms and as in-house counsels of international corporations. A selected network with tax experts, fiduciary and auditing companies and specialised law firms abroad ensures optimal handling of international and cross-border transactions and disputes.
We would be delighted to have the opportunity to assist with your organisation’s expansion into Switzerland.
2. Labour and Employment Law Requirements
a) Employer Policy Requirements
Under Swiss law, only a few workplace policies are mandatory:
- Health and Safety Policy: Industrial enterprises are required to have a written health and safety policy in place.
- Pregnancy Protection Policy: All companies carrying out dangerous or burdensome work must implement an information and risk mitigation policy to inform and protect women in the event of pregnancy.
- Sexual Harassment Policy: All companies—including Swiss branches and subsidiaries—are generally expected to have a policy against sexual harassment in the workplace.
- Employee Data Protection Policy The Swiss Data Protection Act (FADP) requires employers to provide clear and transparent information to all employees, about how their personal data is collected and processed.
In addition to the mandatory policies, we recommend implementing a number of internal policies as your company grows. These policies can help manage employee relations effectively and reduce the risk of future legal liability:
- Email and Internet Use Policy
- Expense Policy
- Company Car Policy
- Paid Leave Policy
- Public Holidays Policy
- Working Time Policy
Many employers in Switzerland choose to consolidate some or all of these policies into a unified employee handbook.
b) Employee Training Requirements
Under Swiss labour law, employers are required to take all necessary and reasonable measures to prevent workplace accidents and occupational diseases. This obligation includes actively involving employees in the prevention process.
If an employer assigns specific occupational safety responsibilities to an employee, appropriate training must be provided. The exact training requirements vary depending on the industry and are governed by specific regulations.
Similarly, the aforementioned legal obligation to prevent sexual harassment in the workplace also includes raising employee awareness through targeted training programs.
c) Employment Agreements
Swiss employment agreements do not need to be overly detailed. In the absence of specific contractual provisions, the Swiss Code of Obligations applies—which, in general, tends to favour the employer. At a minimum, the employment agreement should specify the salary, start date, and workload (e.g., full-time or part-time).
However, it is advisable to also include provisions addressing the probationary period, notice periods, overtime compensation, intellectual property rights, and post-contractual restrictions.
Certain agreements must be in written form to be legally valid – particularly those that deviate from the default rules under the Code of Obligations on the probationary period, notice periods, compensation for overtime, intellectual property rights or post-contractual restrictions. Under Swiss law, written form requires either a wet signature or a qualified electronic signature in accordance with ZertES (the Swiss Federal Act on Electronic Signatures).
Our firm offers a comprehensive set of policy templates and employment contract models that can be easily adapted to meet your organization’s specific needs.
3. Corporate Law Requirements
Foreign investors can choose from a range of Swiss legal entity forms. Aside from sole proprietorships, the limited share company (SA / AG) is the most common corporate structure in Switzerland.
Key advantages of a limited share company include:
- Limited liability: Shareholders’ liability is restricted to their capital contribution.
- Transferability of shares: Company shares can be easily transferred.
- Flexibility: Trade restrictions can be imposed by contract or statute.
- Stronger credit rating: Corporations typically enjoy better credit ratings than other business structures.
- Anonymity: Shareholders are not publicly disclosed in the commercial register.
Other commonly used structures are the limited liability company (GmbH / Sàrl) and the sole proprietorship. Sole proprietorships are available only to natural persons and involve unlimited personal liability.
The limited liability company is a private capital company that can be established by one or more individuals or legal entities. It is particularly well-suited for smaller enterprises or family-owned businesses.
Both the limited share company and the limited liability company must be represented by at least one person residing in Switzerland. Beyond this, there are no restrictions regarding the residency or nationality of shareholders or directors.
a) Compliance for Incorporation
In Switzerland, the incorporation process typically begins with opening a corporate bank account and depositing the required share capital. The minimum capital requirements are:
- CHF 20,000 for a limited liability company (GmbH/Sàrl)
- CHF 100,000 for a limited share company (SA/AG), of which at least CHF 50,000 must be paid in at the time of incorporation
The bank will issue a certificate of deposit, which is required for registration.
The company is officially incorporated upon registration with the Commercial Register. For the registration of a limited share company (SA/AG), the following documents are required:
- Notarised deed of incorporation
- Articles of association
- Proof of capital deposit
- Declarations of acceptance by the board of directors and statutory auditors
(If the company opts out of a regular or limited audit: a formal waiver declaration by the board of directors)
- Minutes of the board of directors regarding its constitution, chairperson appointment, and allocation of signature rights
- Passport copies of all individuals to be registered
The incorporation process for a limited liability company (GmbH/Sàrl) is largely similar to that of a limited share company.
Costs and Fees
- Notary fees: approx. CHF 1,000 – 4,000
- Commercial Registry Office fees: approx. CHF 500 – 700
- Stamp tax: A 1% capital issuance tax applies if the share capital exceeds CHF 1 million
b) Post Incorporation Registrations
Once the incorporation process is complete, the company must register for VAT for tax purposes.
To fulfil its obligations related to employee social security, the company must:
- Register with the competent local social security authority
- Join a recognized pension fund institution
- Arrange for accident insurance coverage for its employees in accordance with the Swiss Accident Insurance Act
While insurance for continued salary payment in the event of illness is not legally required, it is considered best practice and is widely adopted by employers in Switzerland.
4. Payroll and Benefits Providers
In Switzerland, many employers choose to outsource payroll and benefits administration to third-party service providers. This significantly reduces the administrative burden associated with managing these functions in-house.
We would be happy to recommend trusted payroll providers that align with your business’s specific needs.
