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There are a number of administrative requirements that must be adhered to when establishing a Swiss company. Here are a few that are key:
In December 2011, the Swiss Parliament enacted the changes required in the Swiss Code des Obligations (‘CO’) to reflect the New Swiss Accounting Law. This new Law came into effect on 1 January 2013 with a 2-3 year transitional period as follows:
- For stand-alone accounts / set of financial statements, the new Law is to be applied as of 1 January 2015;
- For Consolidated accounts / set of financial statements, the new law is to be applied as of 1 January 2016.
E.g. A Company with 31 December 2014 as year-end, presenting stand-alone financial statements will apply the new requirements as of 1 January 2015. A Company with 30 September 2014 as year-end will apply the new requirements as of 1 October 2015.
The main changes and new requirements are summarised below:
Duty to keep accounts and the type of accounts to be maintained
Sole proprietorships and partnerships generating revenue of less than CHF 500’000 in the last financial year are only required to maintain simplified accounting with the presentation of a statement of receipts/income and payments/expenses.
Sole proprietorships and partnerships generating revenue of at least CHF 500’000 in the last financial year and legal entities are required to keep accounts and present annual financial reports.
The annual financial reports consist, as a minimum, of:
- Balance Sheet
- Income Statement
- Annex – information/disclosure required is set in Art.959c CO.
For entities subject to a full-scope audit (‘Contrôle Ordinaire’), the annual financial reports will consist of:
- Balance Sheet
- Income Statement
- Annex - information/disclosure required is set in Art.959c CO
- Annex - Additional information required is set in Art.961 CO, which includes presentation of a Cash Flow Statement and Annual Report.
Currency to be applied
Accounts can be maintained in Swiss francs or any other currency in which the entity has its business activities, i.e. any other functional currency. However, if the functional and presentation currency is different from Swiss francs (CHF), then the Financial Statements must disclose the CHF equivalents either as an annex or on the face of the primary statements, with a note on the exchange rate applied to convert into CHF.
Language in which to present financial statements
Financial statements can be presented in any of the Swiss official languages, or English. No other languages are accepted.
Consolidated financial statements
If the Company controls another entity, then it needs to prepare consolidated financial statements if the following conditions are met:
- The combined accounts exceed 2 of the 3 thresholds: Total assets of CHF 20 million, revenues of CHF 40 million or FTE annual average of 250; or
- When consolidated financial statements are deemed necessary to reliably assess the Company’s economic situation; or
- When shareholders representing at least 20% of the Company’s share capital so require.
For an entity controlled by another entity which in turn prepares Swiss Consolidated Financial Statements prepared in accordance with Swiss GAAP or internationally recognised accounting standards (such as US GAAP, IFRS, IFRS for SMEs, IPSAS) and which are accessible, then the former need not prepare any Consolidated Financial Statements.
Main Articles of Swiss Code of Obligations governing the new Swiss Accounting Law – Art. 957 CO to Art 963 CO