Foreign companies entering the Swiss market can decide upon opening a subsidiary or a branch office. A Swiss branch office is allowed to conduct any operation that would represent the parent company and is within the parent company’s business purposes.
A Swiss branch does not have a separate legal personality but is required to be registered with the Swiss Commercial Register and must have at least one Swiss resident on its management board and must have a registered office in Switzerland.
Unlike a subsidiary, a branch is easier to incorporate and does not require a minimum share capital. However, the foreign parent company will be accounted liable for the branch office’s liabilities and activities. When registering a Swiss branch, the representatives of the foreign company are required to provide the following:
- The registration documents of the parent company.
- Documents setting out the decision of the parent company to establish a branch office in Switzerland.
- Documents to confirm that the branch office will have the same activities as the parent company.
Swiss branch offices are treated as any other company when it comes to CIT, but if the parent company is a tax resident of a country that has signed a double taxation agreement (DTA) with Switzerland, the profits obtained through the operations of the Swiss branch can be exempted from taxation. The branch office can also be eligible for exemption from Swiss withholding tax in respect of payments made to its parent company.