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SWITZERLAND: SPECIAL FEATURE

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Special Tax Status Companies in Switzerland

The “Mixed” Company – minimizing taxes on international trading profits
Contributed by: Chris Doyle, CEO Co-Handelszentrum GmbH

In these times of high Government borrowing and the resultant increased tax burdens on companies and individuals , internationally orientated companies and individuals may want to give consideration to the tax savings that may be available through establishing a Swiss Company.

Such a company might be used to conduct business mainly outside Switzerland or conducting certain of its administrative activities from within Switzerland. Aside from its internationally accepted jurisdictional status and association with security and quality, tax privileges may be available under the “Mixed” company regime resulting in exemption from Cantonal taxes and a relatively low rate of overall corporation tax (typically 8- 11%) on foreign source income.

This may be of interest in many situations to mitigate existing high tax burdens or future increases in taxes and should be of particular interest to international trading companies, importers, distributors, companies providing products of services over the internet, headquarter companies, finance and IP companies to name but a few.

The establishment of such a company may not initially require the need to transfer or hire local staff as services required might be partially contracted to a Swiss Fiduciary Agent .

For example an importer of goods from China into another relatively high tax EU country may decide to incorporate a Company in Switzerland through which it may conduct its international purchasing and wholesale operations in Switzerland.

Goods then may be sold on a wholesale basis to retail or other sales channels in other EU countries leaving a margin of profit to be taxed at a relatively low rate in the Swiss Company. If physical goods are involved , these would not need to be imported directly into Switzerland. Over time additional services might be provided from the Swiss Company resulting in higher revenues/ margins and or additional low tax revenues.

A similar opportunity is available for businesses supplying products or services over the Internet . If these were made available through a Swiss Company (which owned and operated the web site) , trading profits would be taxed at a relatively low rate in Switzerland. Localised support or fulfillment services might be provided to the Swiss Company by a local contractor/company.

Further information and a free consultation on Mixed Companies in Switzerland and other forms of tax privileged Companies in Switzerland can be found by contacting Co-Handelszentrum GmbH at info@co-handelszentrum.ch or visiting their website at www.co-handelszentrum.ch

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