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A. A Swiss holding company with a permanent
tax holiday
This is a company whose purpose is to manage important shares in
other companies. If the Swiss holding company owns shares in foreign
companies only, it can get a tax holiday and pay very little tax.
With a Swiss holding company, you get a permanent tax
holiday for all cantonal (state) and city taxes if you incorporate your company
in the right place. You will pay less than 8% on the holding's income, all inclusive.
There is no capital gains tax, so if you sell shares at a profit, this
will be totally tax-free. All this in an OECD country with many double taxation treaties,
excellent banking resources, an educated workforce and a high standard of living for your
employees.
The principal tax is the 7.8% federal tax on your company's income
(effective rate), plus a small amount of tax on the official capital of your company -
between 0.35% and 0.075% of the capital (and decreasing). The bottom line is about 8% of
net income before taxes, all inclusive. You must also keep in mind that in Switzerland
there is no political pressure to raise taxes, unlike in the EU countries where fiscal
conformity is a permanent issue.
For a holding company with a share capital of SFR 500,000 and
retained earnings of 1,000,000, with a dividend income of SFR 700,000 and other income of
SFR 300,000, the total annual tax owed is SFR 7,135. Thus the larger your holdings, the
less you'll pay in proportion to your income.
Switzerland has double taxation treaties with the following
countries : Australia, Austria, Belgium, Bulgaria, Canada, China,
Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia,
Ireland, Italy, Ivory Coast, Jamaica, Japan, Korean, Luxembourg, Malaysia, Mexico,
Morocco, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Rumania, Russia,
Singapore, South Africa, Spain, Sri Lanka, Sweden, Trinidad and Tobago, United Kingdom,
United States of America. These treaties ensure that withholding tax is reduced
when paid to a resident of another country.
Obtaining a tax holiday is possible only in the cantons of Fribourg,
Zug and Glaris. If you wish to maintain offices
in Switzerland, the best place is Fribourg.
Switzerland now has the lowest tax rates for holding companies in
Europe.
Cartier, the French luxury goods group, has huge
headquarters in Fribourg, together with Michelin, the French tire makers.
Liebherr, the great German white-ware group, is in Fribourg. There's alsoa
great South African luxury goods group, which has its headquarters in Zug. There are many others. Why don't you join them?
As little as one week. Of course it can take a little longer,
depending on the complexity of your case.
B. The Swiss domiciled share corporation
This is a classic company which is limited by its share-holding. An
SA is a limited company whose capital is divided in shares which can be traded. All the
major companies in Switzerland are SAs. Shareholders are protected from creditors,
and they pay a withholding tax of 35% on dividends.
More about SAs.
A company which has no business activity in Switzerland, having
neither staff nor office of its own. Such companies are also known as mailbox companies.
With a domiciled company, you get a permanent tax holiday
for all cantonal (state) and city taxes if you incorporate your company in the right
place. You'll pay less than 8% tax on the holding's income, all inclusive.
Zug is the best, with Fribourg a close second. In both, you will be
almost totally exempt from local and state (canton) taxes.
More about Zug.
The principal tax is the 7.8% federal tax on the company's income
(effective rate), plus a very small tax on the official capital of your company, between
0.35% and 0.075% of the capital - and decreasing. The bottom line is about 8% of the net
income before taxes, all inclusive. If there's a double
taxation treaty between your country and Switzerland, you won't have to pay the full
35% withholding tax on dividends.
Normally one week if you provide us with all the necessary details
and documentation.
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