How to Become Self-Employed in Switzerland

Hey there, future entrepreneur! So you're thinking about taking the leap and becoming your own boss in Switzerland? Congrats, that's a big decision! 🎉 In this article, we'll walk you through everything you need to know to make your self-employment dreams a reality, from understanding the legal definition of self-employment to keeping on top of your day-to-day tasks. Let's dive in!

I. Introduction

Switzerland is a great place to be self-employed. The country has a long history of promoting entrepreneurship and valuing professional autonomy. Self-employed individuals are seen as key drivers of innovation and economic growth.

According to the Federal Department of Economy, a person is considered self-employed in Switzerland if they:

• Work on their own behalf and account
• Have a certain autonomy in their work
• Assume the economic risk of their activities

This implies owning a business name as a sole proprietorship, managing their own infrastructure, issuing invoices in their name, assuming the risk related to collection, and accounting for VAT. The self-employed also decide on their organization, working methods and can subcontract tasks to third parties. It is also characteristic that they work for several clients or clients.

Becoming self-employed in Switzerland offers a lot of freedom in managing your activities, but also means navigating a complex regulatory and tax environment. That's why it's crucial for Swiss self-employed to understand their obligations and the opportunities available to them, particularly in terms of tax deductions and business management.

II. Starting Your Business

A. Do you need to be self-employed to issue invoices?

Contrary to popular belief, you don't actually need to have officially registered as self-employed to start issuing invoices in Switzerland. If you're doing occasional work that stays below the threshold of CHF 2,300, it's possible to invoice without creating a formal business entity.

The key is to determine the right moment to officially become self-employed, for example when you have multiple clients and your revenue exceeds the above amount.

B. How to Become Officially Self-Employed

Becoming self-employed in Switzerland starts with an affiliation to the Old Age and Survivors' Insurance (OASI). This might seem counterintuitive - the first step isn't administrative paperwork, but simply starting your business activity!

To affiliate with OASI, you need to show proof of your business activity, such as contracts or invoices, when filling out the compensation fund form. So the very first step is to acquire your first clients.

C. Invoice Your First 2 Clients

Start by prospecting clients and send them an invoice once the service is rendered. You need a minimum of two clients to apply for OASI affiliation.

You can easily create invoices with tools like Magic Heidi.

D. Affiliate with OASI

Once the two invoices have been sent and paid, you have enough documents to convince OASI that you are indeed self-employed (and not an employee).

You will need to fill out a form on the OASI website and send them some documents; follow the guide.

Guide: How to affiliate with OASI

E. You Are Officially Self-Employed!

If you wish, you can register with the trade register (but this is not mandatory).

You now need to keep accounts to keep your business under control and satisfy the tax office. Magic Heidi is the ideal tool for this.

Guide: Accounting for the Self-Employed

III. Accounting for Dummies Self-Employed

Accounting can seem scary, but don't worry. It's easier than you think, and we've prepared several guides to help you.

Guide: How to keep your accounts

For self-employed who are not affiliated with VAT (under 100k/year), keeping accounts is simple and can be done in Excel or Magic Heidi.

Why not start with your business travel expenses and phone subscription?

A. Deductions Not to Forget

The best way to increase your profits is to pay less taxes.

In this guide, you will find a list of common business expenses not to forget in your accounting.

Business expenses (advanced guide)

Discover the essential tax deductions for self-employed entrepreneurs in our comprehensive guide.

Learn how to optimize your income and your company's profits by efficiently managing your expenses and understanding the nuances of tax regulations.

IV. Register for VAT

When your business takes off and you exceed 100,000 in annual revenue, it's time to register for VAT. The following changes ensue:

A. You charge VAT on your invoices

Your invoices must now contain your company number, for example: CHE-213... and you must add the correct VAT rate to your invoices.

B. You deduct the VAT you pay

Whereas until now you have paid VAT, you can now deduct it from all your business purchases!
7% reduction on everything, that's great! Find out about the different VAT accounting methods here.

C. Your accounting becomes more complex

Generally, this is when the self-employed entrust their accounting to an accountant to simplify their life and avoid problems.

V. Open a Limited Liability Company (Sàrl)

Depending on your needs, it may be wise to open a Sàrl to develop your business.

Check out our guide: Opening a Sàrl vs Self-employed status: what are the differences and how to choose?

VI. Conclusion

Magic Heidi, Your Right-Hand Woman

To successfully complete your business creation project, you need a foolproof, simple and well-designed tool. This is the promise of our accounting and invoicing application, specially designed for Swiss self-employed.

Create a free account with Magic Heidi to start your self-employment journey with ease!

We've covered a lot in this guide, but remember, every self-employment journey is unique. The key is to stay informed, be proactive in managing your obligations, and don't hesitate to seek help when needed, whether from official resources or handy tools like Magic Heidi.

Happy entrepreneuring! 🚀