A sole proprietorship (raison individuelle / Einzelfirma) is the simplest and cheapest way to go into business alone in Switzerland: no minimum capital, no notary, and a setup that is sometimes free. The trade-off is that you and the business are one and the same person in law — your liability is unlimited on your private assets. Your business name must contain your surname, and entry in the commercial register is only mandatory once turnover passes CHF 100,000. The one step nobody can skip is having your self-employed status recognised by an OASI/AVS compensation office. This guide covers who can set one up, the steps, costs, accounting and tax.
Contents
What is a sole proprietorship
A sole proprietorship is a business run by a single individual, with no legal personality of its own. In law, the owner and the business are one — which is exactly what makes it so simple to start, and also what puts your private assets on the line.
- Owner: one individual.
- Liability: unlimited, on your private assets.
- Capital: none required.
- Legal basis: Code of Obligations, art. 945 ff.
It is the natural choice for the self-employed: consultants, freelancers, the liberal professions, e-commerce sellers and tradespeople. To see it next to the other structures, read our guide to the legal forms of business in Switzerland.
Who can set one up (permits)
Any adult can run a sole proprietorship, provided they have the right to be self-employed in Switzerland. Nationality changes the paperwork, not the principle.
- Swiss nationals and EU/EFTA citizens: free to set up.
- Non-EU nationals: need a permit that allows self-employment — a C permit, or a B permit with the right authorisation.
- Cross-border commuters: can run a sole proprietorship under conditions (a G permit and activity genuinely carried out in Switzerland); the setup is assessed case by case.
Important
Unlike a GmbH or an AG, a sole proprietorship assumes the owner carries out the activity in Switzerland themselves — it cannot be run “from a distance” through a resident director. An entrepreneur who wants to own a Swiss structure without working in it should look at a GmbH instead.
Advantages and drawbacks
The sole proprietorship trades legal protection for sheer simplicity. Worth weighing both sides before you start.
| Advantages | Drawbacks |
|---|---|
| No minimum capital, cheap and fast to start | Unlimited personal liability |
| Few formalities — no notary, no articles | Your surname must appear in the business name |
| Profits taxed once, as personal income | Harder to bring in partners or investors |
| Simplified accounting below CHF 500,000 | No unemployment insurance for the owner |
The sole proprietorship suits solo, lower-risk activities; a GmbH becomes worthwhile once liability or growth matter.
How to set up a sole proprietorship
There is no incorporation as such — you simply start trading and put a few registrations in place. In practice it comes down to five steps.
1. Choose your business name
The name must contain your surname, with or without an activity descriptor — “Anna Müller” or “Anna Müller Consulting” both work. You can check what is already taken on the federal Zefix register.
2. Register your self-employed status with an OASI/AVS office
This is the step that makes you official. You apply to a cantonal OASI/AVS compensation office to be recognised as self-employed, backing it up with evidence that you really are — typically invoices or contracts with several clients. Recognition is what lets you pay self-employed social contributions rather than be treated as an employee.
3. Register in the commercial register (if required)
Entry is mandatory once your turnover passes CHF 100,000 a year. Below that it is optional — but registering voluntarily is usually worth it: it adds credibility and makes opening a business bank account easier. Simple cases can be filed online via EasyGov.
4. Register for VAT (if required)
You must register for VAT once annual turnover exceeds CHF 100,000. Below that you are exempt, though voluntary registration can make sense if you want to reclaim input VAT.
5. Set up accounting and insurance
Put in place bookkeeping suited to your size (see below), and sort out your own cover — occupational pension and daily-allowance insurance are optional for the self-employed, but worth a hard look, since there is no unemployment insurance.
Costs and timeline
This is the cheapest way to start a business in Switzerland. There is no capital to deposit, and if you stay under the registration threshold and file yourself, the cost can be close to zero. The main out-of-pocket item is the commercial register entry, around CHF 120.
- Capital: none.
- Commercial register entry: ≈ CHF 120 (when registered).
- Timeline: a few days to a few weeks, mostly driven by the OASI/AVS recognition.
Accounting and tax
A sole proprietorship is taxed transparently: there is no separate company tax. The profit is added to your personal income and taxed at the ordinary progressive rates, at federal, cantonal and communal level. You also pay self-employed OASI/AVS contributions on that profit.
Accounting scales with your size (CO art. 957):
- Below CHF 500,000 turnover: simplified accounts — a record of income, expenses and assets is enough.
- CHF 500,000 or more: full double-entry bookkeeping, with annual accounts.
Because profit is taxed as personal income, the sole proprietorship is often the lighter option at modest earnings — but as profit grows, a GmbH can become more efficient and bring the liability shield with it.
Sole proprietorship, GmbH or AG
The choice turns on liability, capital and how you intend to grow. The sole proprietorship is the simplest entry point; the capital companies cost more but protect your private assets.
| Criterion | Sole proprietorship | GmbH (LLC) | AG (Ltd) |
|---|---|---|---|
| Minimum capital | None | CHF 20,000 | CHF 100,000 (50,000 paid in) |
| Liability | Unlimited | Limited to capital | Limited to capital |
| Legal personality | No | Yes | Yes |
| Taxation | Personal income | Corporate | Corporate |
| Best for | Starting solo, low risk | SMEs | Larger projects |
Sources: CO art. 945 ff. (sole prop.), 772 ff. (GmbH), 620 ff. (AG).
Many entrepreneurs start as a sole proprietorship and convert into a GmbH once the activity proves itself — a clean, tax-neutral step when it is planned. For the full picture, see our pillar guide to company formation in Switzerland.
FAQ: sole proprietorship in Switzerland
Can a foreigner set up a sole proprietorship in Switzerland?
Yes, with the right to be self-employed. Swiss nationals and EU/EFTA citizens can set up freely; non-EU nationals need a C permit (or a B permit with authorisation); cross-border commuters need a G permit and must genuinely carry out the activity in Switzerland. The owner has to run the business themselves.
Do I have to register a sole proprietorship in the commercial register?
Only once your annual turnover exceeds CHF 100,000. Below that, registration is voluntary — but it is usually recommended, as it adds credibility and makes it easier to open a business bank account.
How is a sole proprietorship taxed in Switzerland?
Transparently: there is no separate company tax. The profit is added to your personal income and taxed at ordinary progressive rates at federal, cantonal and communal level, and you pay self-employed OASI/AVS contributions on it.
What are the disadvantages of a sole proprietorship?
The main one is unlimited personal liability — your private assets answer for the business debts. You also have to put your surname in the business name, you cannot easily bring in partners, and there is no unemployment insurance for the owner. For higher-risk or growing activities, a GmbH is safer.
How much does it cost to set up a sole proprietorship?
Very little. There is no capital to deposit, and if you stay below the registration threshold and file yourself it can be almost free. The main cost is the commercial register entry, around CHF 120 when registration applies.
Sources
Conclusion
The sole proprietorship is the fastest, cheapest way to start out alone in Switzerland: no capital, few formalities, and a profit taxed simply as your personal income. The price of that simplicity is unlimited liability and a name tied to your own — which is why most founders move to a GmbH once the activity grows and the risk starts to matter. The one step to get right from day one is having your self-employed status recognised by an OASI/AVS office.
My Swiss Company SA, a Swiss corporate services provider present in Geneva, Lucerne and Zug and active in 20+ countries, helps you set up and run your activity — from self-employed registration to accounting and the move to a GmbH when the time comes. Discover our company formation services or contact us for an initial consultation.
