From admin and taxes to insurance and social security, we explain all you need to know about becoming a freelancer or self-employed in Switzerland.
As far as European countries go, Switzerland isn’t the easiest place to go freelance – at least at first. Once you overcome the legal hurdles and permits required to be your own boss, however, working for yourself can be pretty straightforward. And the same can be said when it comes to looking for – and finding – freelance work. With this in mind, it’s hardly surprising that the international community in Switzerland is buzzing with self-employed entrepreneurs.
So, if you’re looking to embrace freelance life in Switzerland, this helpful guide explains everything you need to know to get started. It includes the following:
- The difference between starting a business and becoming a freelancer
- Who can become a freelancer in Switzerland?
- How to become a freelancer in Switzerland as an expat
- Administration when freelancing in Switzerland
- Banking for freelancers in Switzerland
- Taxation for freelancers in Switzerland
- Social security, health insurance, and pensions for freelancers
- Earning a secondary income from freelancing in Switzerland
- Finding office space when freelancing in Switzerland
- Finding work when freelancing in Switzerland
- Support, advice, and training for freelancers in Switzerland
- Useful resources
The difference between starting a business and becoming a freelancer
Depending on the legal form of your company, there are a few differences between setting up a business in Switzerland and becoming a freelancer. However, in both cases foreigners must also be a Swiss resident, or have a Swiss legal entity or partner who is a Swiss resident. You can read more about Swiss visas and permits and Swiss work permits for conditions.
The process of applying for a self-employment permit in Switzerland varies between cantons. Therefore, one of the best things to do is contact your local immigration office to understand exactly what you need to submit. One thing you will definitely have to do, however, is to establish a sole proprietorship company. This is known as an Einzelfirma in the German-speaking areas, an Entreprise Individuelle in the French-speaking regions, and a Ditta Individuale in the Italian-speaking canton of Ticino.
Setting up a sole proprietorship
Although the Swiss Code of Obligations doesn’t regulate sole proprietorships, it remains the most popular option among freelancers in Switzerland. In fact, there are more than 326,000 active sole proprietorships in the country. This legal form is indeed most suitable for sole owners of a business or other professionals who work for themselves; for instance, freelancers, small businesses, and individual entrepreneurs. It is fairly simple to apply for and doesn’t require a minimum capital injection. This makes it ideal for self-employed people who don’t have a big investment behind them.
Working for oneself is becoming an increasingly popular choice in Switzerland. In fact, according to consultancy firm Deloitte, approximately 25% of people in the country work as freelancers. The reason is easy to grasp – freelancers can structure their schedules as they see fit and enjoy a better work-life balance than you would find in a nine-to-five job. They also have access to the same childcare benefits as employed workers.
That said, there are cons, too. For instance, freelancers in Switzerland are generally not insured against unemployment, meaning that Switzerland’s social security system cuts them out. In fact, they are generally subject to the social security system of their country of residence. This is why taking out their own social insurance is so important.
Who can become a freelancer in Switzerland?
Anyone who is a Swiss resident can register as a self-employed person by contacting the Ausgleichskasse (compensation office) of the canton of their residence and applying for an affiliation form. Aspiring freelancers must provide documents such as copies of invoices already drawn up, agreements, offers made, headed paper, and a lease or a certificate of Civil Liability Insurance (RC). Essentially, you must prove that you already have some business knowledge and are able to work for yourself.
It is also better to submit the affiliation form in the first months of the business activity, so that the government can recognize your self-employed status as soon as possible. Similarly, all nationals of member states of the EU and EFTA (the European Free Trade Association), with the exception of Croatians, can start gainful self-employment in Switzerland. An application to do so must be filed with the Cantonal Migration Office. If the application is approved, the freelancer will receive a residence permit (Permit B) which is valid for five years and can be renewed. It is only then that EU expats can officially become self-employed.
The process is slightly different for non-EU citizens (including British nationals) from so-called third states. In fact, Switzerland is quite strict about the number of foreign workers that are permitted to work in the country. For instance, it only grants around 8,500 B and L work permits annually to people from outside the EU; and only if they are well qualified.
How to become a freelancer in Switzerland as an expat
A work permit is a must for any foreign national looking to become self-employed and own their own sole proprietorship company in Switzerland. Furthermore, obtaining a permit to work in Switzerland will also depend on whether you have the right skills, what country you are from, and the quotas available.
How to obtain a work visa as a freelancer in Switzerland
EU and EFTA citizens can stay in Switzerland and become self-employed by applying for a B Permit. This is valid for five years, as long as the freelancer can prove that they can make enough money to survive on being self-employed. You can check the list of EU/EFTA member states here.
Expat entrepreneurs from third states have to meet the Swiss labor market requirements to receive a work permit for self employment, which can prove to be quite difficult. However, this doesn’t apply to those who are married to a Swiss citizen, or who are already in the possession of a permanent residence permit (C Permit). Often, the easiest way in for third-state freelancers is to establish a Limited Liability Company or a Public Liability Company with a Swiss partner or their Swiss spouse.
Legal structures for freelancers in Switzerland
Below are the two types of company that you can set up in Switzerland, along with information about the registration procedure, start-up costs, and so on:
Registering as a freelancer in Switzerland
Before they can work, freelancers in Switzerland must have their new status recognized as self-employed by the social insurance scheme. They can apply for this at their canton’s Ausgleichskasse (compensation office). The canton will decide whether or not to grant the self-employed status, according to the guidelines of the Federal Social Insurance Office (FSIO) and the case-law of the Federal Court (TF).
In the case of professions such as notaries or doctors, the applicant must apply for specific authorizations. They will also need to prove that they have completed specific training or experience within the sector. The Federal Council regulates certain professions, while the cantonal authorities oversee others. Freelancers who belong to a professional association must also join the association’s fund. You can find a full list of every cantonal compensation office here and a list of professional fund associations here.
Fortunately, the registration procedure is fairly simple and inexpensive. Furthermore, it doesn’t involve a minimum capital requirement. If you need help starting up your proprietorship in Switzerland, professional advice is easily available. That said, it can cost up to CHF 1,000, and this is in addition to the CHF 120 fee required to join the trade register; which is optional until you reach CHF 100,000 of annual turnover.
When freelancers set up their own business in Switzerland, their last name must appear in the company name. They can also add extra elements such as the sector of activity or specialized area. However, the law requires that the business name has to be truthful, cannot be misleading, and must not run counter to any public interest. Once this is all complete, you will get your social security and tax numbers.
Administration when freelancing in Switzerland
Freelancers must make sure to keep their admin in order in Switzerland. Luckily, you can subcontract this duty to a professional accountant. If you make under CHF 500,000 a year and have registered your company with the trade register, you must keep summary accounts. This includes a statement of assets and liabilities, a statement of income and expenditure, a statement of deductions, and private contributions.
If you earn more than this limit, you will have to keep full accounts, including a balance sheet, profit and loss account, and appendices. You will also need to audit the accounts of capital companies and keep business documents for at least 10 years. EasyGov is a great platform that you can use to manage all your administrative tasks electronically. It is also a treasure trove of resources and information.
Banking for freelancers in Switzerland
Separating your freelancing finances from your personal finances is key to making life as a self-employed person a little easier. By having separate accounts, you can track your income and expenses more efficiently. You can also have cleaner records to clearly showcase what business expenses you can deduct on your tax return.
Since freelancers don’t have a regular income and don’t pay their taxes in the traditional sense, keeping detailed records of your finances is a must, and the first step towards a long-lasting freelancing career. You can find more useful information in our guides to banking in Switzerland and opening a Swiss bank account.
Taxation for freelancers in Switzerland
Freelancers in Switzerland who earn more than CHF 100,000 are subject to VAT. However, this doesn’t apply to certain sectors; for example, insurance, healthcare, or farming. Freelancers must inform the Federal Tax Administration (AFC) and register for VAT, then check whether they meet the conditions of liability on the AFC website. They should also declare their profits as income, and include them in their overall taxable income. They must file a tax return based on their business accounts and private assets.
Notably, self-employed individuals in Switzerland can claim business expenses. They can also offset their business expenses from their revenues as long as they can show that they need those expenses. In addition, they can carry forward any loss from their business for seven years.
Social security, health insurance, and pensions for freelancers in Switzerland
The social security system in Switzerland includes three ‘pillars.’ The first pillar is a state pension plan that consists of various insurance schemes such as the Old-Age and Survivors Insurance, the Disability Insurance, and Loss of Earnings Insurance. In order to contribute to this, freelancers need to register with a compensation office. Self-employed workers also have to pay the full amount of their contributions on their own. Generally speaking, the maximum rate is 9.7% of their income.
Although it is optional, freelancers can also voluntarily contract a pension plan with an insurance company. This is the so-called second pillar, which includes occupational pension plans and accident insurance. The third pillar is a private, individual option that workers can use to help supplement the remainder of their income that is not covered by the first two pillars. Similar to the second pillar, it is also optional.
Health insurance is mandatory for everyone residing in Switzerland, including freelancers. Self-employed people can also get coverage against the risks of loss of earnings in the case of illness or accident. Other types of insurance – including theft and legal protection – are also discretionary and can be useful depending on your field of work.
Other types of insurance for freelancers in Switzerland
Depending on the nature of your business, there are a couple of forms of insurance that you might want to consider, as follows.
Professional indemnity insurance
People in professions where self-employment is common, such as doctors, pharmacists, and architects, can take out voluntary professional indemnity insurance that covers the special risks associated with their job. Professional indemnity insurance is mandatory in some industries, such as vehicle maintenance.
Legal protection insurance
This type of insurance ensures that you have access to legal advice and assistance in the case of legal disputes in your day-to-day business.
Earning a secondary income from freelancing in Switzerland
Starting a business while still working full-time can be a good way to enter the world of freelancing. It also allows you to rely on some regular income while you get your freelance career set up. And, as long as your contract allows you to and you follow a few rules, this is possible to do in Switzerland.
The first rule is, of course, that your freelance work shouldn’t be detrimental to your primary job. Simply put: your side hustling shouldn’t impact your full-time job. Secondly, you can’t compete with your employer. Doing so might have legal consequences, not to mention cost you your full-time role. And finally, you need to be aware of the implications that your freelance work has on your tax liability. After all, any side income adds to your normal income, and the higher the income, the higher the taxes.
If you have your own company, you will have to file two tax declarations: one for you as an individual and one for your company. You will also have to pay social contributions to the first pillar of Switzerland’s social security system. That said, this only applies if your self-employed work earns you more than CHF 2,300 per year. If it is below that amount, however, then you don’t have to make these social contributions.
Finding office space when freelancing in Switzerland
Self-employed professionals can either work in co-working spaces or rent their own offices to conduct their businesses in Switzerland. Co-working spaces can be a great way to meet fellow freelancers and become more integrated with the local community.
Having an official business address will also make your venture appear more professional. Coworking.ch (the national association of the Swiss co-working movement) is a great resource for anyone interested in co-working options in Switzerland.
Finding work when freelancing in Switzerland
So you’re working for yourself. Now what? Getting freelance work in Switzerland can feel daunting at first, especially if you don’t yet have a network of contacts to rely on. However, there are several great websites and resources that can help you out.
To find projects and opportunities, for instance, bookmark websites like Upwork and Zebraskill, where you can upload a professional profile. Also, make sure to regularly check Linkedin and Guru, as well as Coworking.ch which often organizes regional meet-ups for self-employed people looking to expand their roster of contacts.
Support, advice, and training for freelancers in Switzerland
Financial support for freelancers
Unfortunately, the Swiss government and cantons don’t grant any direct financial support for the founding of new companies. The only exception is unemployment insurance, as the Confederation provides support measures for unemployed people who would like to start their own company.
Since you can’t rely on any unemployment benefits, you should budget a bridging reserve for at least six months. In the case of bankruptcy, freelancers are, in fact, liable for their total assets.
Support available for freelancers
Coworking.ch offers virtual and real-life meet-ups where you can exchange experiences with fellow freelancers. It also grants members access to surveys on Switzerland’s co-working movement. You can also find a range of professional trainers and networking groups in our directory.
- The Swiss Authorities online – the official government website that provides information on becoming self-employed in Switzerland
- SME Portal – provides guidelines for becoming self-employed as well as links to the relevant application forms
- Coworking Switzerland – the national association of the Swiss co-working movement which provides information on locations and events
- Business Setup Worldwide – an article on 5 Simple Steps to Start a Small Business in Switzerland