Starting a Sole Proprietorship in Switzerland: Everything You Need to Know

The sole proprietorship (Einzelunternehmung) is the most popular business structure in Switzerland — and for good reason. No minimum capital, no mandatory registration below CHF 100,000 in revenue, and full control. Whether you're a freelancer, tradesperson or consultant: most self-employed journeys start here.

Why the Sole Proprietorship Is So Popular with Einzly.ch

You don't need a notary, no articles of association, and no startup capital. Register with your AHV compensation fund, open a business account — and you're ready to go. With annual revenue below CHF 100,000, you don't even need to register with the commercial registry.

Ideal for

• Freelancers and consultants
• Creatives (designers, photographers, copywriters)
• Therapists and coaches
• Tradespeople and service providers

Tax Obligations: What You Need to Know - Trust-FIN.ch

As a sole proprietor, your business profit is taxed through your personal tax return. There's no separation between business and personal assets — this simplifies many things but also comes with obligations:

Bookkeeping requirement

You must properly document all income and expenses. With revenue below CHF 500,000, simplified bookkeeping (cash-based accounting) is sufficient.

VAT obligation

Once your annual revenue exceeds CHF 100,000, you must register for VAT with the Federal Tax Administration. Below that threshold, registration is voluntary.

AHV contributions

As a self-employed person, you pay your own social security contributions — this is often overlooked.

Retirement planning

The 2nd pillar (occupational pension) is voluntary. You can deduct Pillar 3a contributions up to CHF 36,288 (2025) from your taxable income.

The Most Common Mistake: Poor Bookkeeping

Many sole proprietors start out motivated — and then neglect their bookkeeping. Receipts pile up, invoices are written in Word, and by year-end it's chaos. This costs not only nerves but also money: if you don't know your deductions, you're paying too much tax.

Our Tip: The Right Software From Day One

Accounting software doesn't have to be complicated. For sole proprietorships, a lean tool that understands Swiss requirements is enough: QR invoices, VAT reporting, annual financial statements.

einzly (www.einzly.ch) was built exactly for this — a Swiss accounting solution designed specifically for self-employed professionals and sole proprietorships. Create QR invoices, track expenses, calculate VAT automatically, and generate your annual financial statements with one click. No accounting knowledge required, starting at CHF 9 per month.

Setting up your sole proprietorship properly from the start saves you the expensive trip to an accountant later — and keeps you in control of your finances.

Risks of a Sole Proprietorship

As straightforward as it is to set up — there are important points to be aware of:

Personal liability

You are liable with your entire personal assets. Business debts are your debts. For higher-risk activities, professional liability insurance is strongly recommended.

No salary, only private withdrawals

You don't pay yourself a salary — instead, you take private withdrawals. This makes cash flow planning more difficult, especially in the early months.

AHV back payments

AHV contributions are based on the previous year's profit. If your revenue increases significantly, you may face substantial back payments.

Pension gaps

Without an occupational pension and with fluctuating income, retirement savings gaps can develop quickly. Maximizing your Pillar 3a contributions is essential.

No unemployment insurance

As a self-employed person, you are not covered by unemployment insurance. If business slows down, there is no safety net.

This doesn't mean the sole proprietorship is the wrong choice — quite the opposite. But knowing these risks allows you to prepare and avoid surprises.