What is it? And how does it work?
The tax status of domicile companies applies to businesses whose revenue is generated primarily from commercial activities outside of Switzerland (international trading involving goods which do not pass through Switzerland, operational licences and overseas patents, marketing services or overseas trading etc.), or applies to administrative processes carried out in Switzerland, or on behalf of other companies who form part of the same group (fundraising, “European headquarters”, invoicing processes, etc.).
Depending on the circumstances, these companies have a genuine infrastructure within Switzerland (employees, offices), and sometimes they don’t (companies which operate overseas via intermediaries, intimates or non-intimates of the shareholder, finance companies, captive insurance companies). However it must be noted that their trading within Switzerland is restricted to administrative activity only. The development of services from Switzerland does not entitle the company to hold a domiciled status (e.g. architectural businesses who are working in Switzerland for overseas clients).
Corporation tax services
Companies which have administrative functions but which have no commercial activity in Switzerland shall pay tax on earnings as follows :
| Federal tax | 8.50% | |
| Cantonal tax | 0.4750% | in Fribourg (rates vary depending on the Canton) |
| Municipal tax | 0.4147% | in Fribourg (according to the municipal region) |
| Total | 9.3897% |
As you can see, the legal status of a services company in Switzerland brings significant tax benefits, and can benefit from a reduced rate of tax. In agreement with the authorities, taxable income may be fixed at a rate of 5% of the costs which have been incurred by the services company.
AZFH is able to provide you with all of these services, and will be able to support you throughout the entire life of your business.