Can a foreign company set up a branch office in Switzerland?
A foreign company can set up a branch office in Switzerland. The branch office is subject to Swiss law and must be recorded in the commercial register in its Swiss location.
A branch office is a commercially independent business of a parent company. It is legally dependent on the head office and therefore does not have a legal personality. The branch has limited commercial independence: It must carry out the same type of commercial activity as the parent company and form a commercial whole with it (cf. Forstmoser/Meier-Hayoz, Schweizerisches Gesellschaftsrecht – Swiss Civil Law, pg. 741). Example: A German retailer, based in Munich, would like to sell their products in Switzerland too, and sets up locations in St. Gallen, Frauenfeld and Schaffhausen for this purpose.
The branch office is not a subsidiary. The latter is a legally independent company, which has a legal personality, but is commercially dependent on the parent company.
Set-up by a foreign company
A foreign company can set up a branch office in Switzerland. This is then subject to Swiss law (Art. 160 Para. 1 IPRG). In particular, external legal relationships are governed by Swiss law (e.g. the question of powers of representation) (Art. 160 Para. 2 IPRG). The branch office must be entered in the commercial register in its Swiss location (Art. 935 Para 2 OR).
Representation
To establish a branch, an authorised person resident in Switzerland must be appointed and registered in the commercial register. (Art. 935 Para. 2 OR, cf. blog entry). This authorised person does not have to have Swiss citizenship.
Taxes
Because of their commercial affiliation, branch offices are subject to limited tax obligation in Switzerland (Art. 51 Para. 1 section. b DBG). However, the profit made by the branch office in Switzerland is subject to profit tax (Art. 52 Para. 2 DBG).
Hi, thank you for this article – quite informative and concise.
Would you also be able to tell me if it can benefit a foreign investor to own a swiss company (S.A.), in any way?
Would that be of any value?
Especially a Chinese one.
Thank you in advance.