Sole Proprietorship in Switzerland: How to Register as Self-Employed
The sole proprietorship (Einzelunternehmen) is the simplest way to start a business in Switzerland. Learn when you must register, how AHV works and its pros and cons.
Not every business needs a company. For freelancers, consultants, tradespeople and small shop owners, the sole proprietorship is the quickest and cheapest way to start. In German it is called an Einzelunternehmen or Einzelfirma, in French an entreprise individuelle, and in Italian a ditta individuale.
What is a sole proprietorship?
A sole proprietorship is a business owned and run by one person. It is not a separate legal entity: legally, you and your business are the same. That has big consequences:
- No minimum capital is required.
- No notary is needed to set it up.
- You are personally and fully liable for all business debts with your private assets.
- Business profits are taxed as your personal income, not as company profits.
You can still hire employees and trade under a business name, but the name must contain your surname.
When do you have to register?
You must enter your sole proprietorship in the commercial register once your business generates annual turnover of at least CHF 100,000, according to Article 931 of the Code of Obligations. Some liberal professions and farmers who do not run a commercially organised business are exempt.
Below that threshold, registration is voluntary. Some people register anyway because it protects their business name in the canton and can look more professional to clients and banks.
Registration is done with the cantonal commercial register office, often online through the federal EasyGov.swiss portal, and the fee is modest.
Registering as self-employed for AHV
The most important step is not the commercial register but social insurance. To be treated as self-employed, you need to sign up with an AHV compensation office (Ausgleichskasse), usually the cantonal office or the office of your trade association.
The compensation office decides whether you count as genuinely self-employed. It looks at things like whether you work for several clients, bear your own business risk, invest in your own equipment and act in your own name. If you work mainly for one client under their instructions, you may be treated as an employee instead.
Contribution rates
Self-employed people pay their own AHV/IV/EO contributions. According to the 2026 key figures published by PwC Switzerland:
- the full rate is 10% of income (AHV 8.1%, IV 1.4%, EO 0.5%);
- a reduced sliding scale applies to annual incomes below CHF 60,500.
Self-employed people are not covered by unemployment insurance, and occupational pension (BVG) and accident insurance are voluntary. Many sole proprietors therefore build their own pension through pillar 3a and take out private accident and loss-of-earnings insurance.
Taxes and VAT
Your business profit is added to your other income and taxed through your personal tax return in your canton of residence. You must keep proper records; once you are in the commercial register, simple bookkeeping rules apply, and businesses with turnover below CHF 500,000 can keep simplified accounts of income, expenses and assets.
You must register for VAT once your annual turnover reaches CHF 100,000. Our Swiss VAT guide explains how.
Insurance worth considering
Because no employer covers you, think about protection early:
- liability insurance, in case a client claims for damage or a mistake in your work;
- loss-of-earnings insurance, which pays if illness stops you working;
- accident insurance, if you are not already covered through another job.
Some professions, such as architects or financial advisers, are expected or required to hold professional indemnity cover.
Pros and cons
Advantages
- fast, cheap and simple to start;
- no capital required;
- full control and minimal paperwork;
- losses can be offset against other personal income.
Disadvantages
- unlimited personal liability;
- higher tax on high profits than a company might pay;
- harder to bring in partners or investors;
- some clients and banks prefer dealing with a company.
When to switch to a GmbH
Many entrepreneurs start as sole proprietors and later move to a GmbH when profits grow, risks increase or they take on partners. A GmbH separates business and private assets and lets you pay yourself a salary and dividends. Our comparison of the GmbH and AG explains the company options.
Foreign nationals
A sole proprietor must personally hold a valid residence and work permit that allows self-employment. EU/EFTA citizens generally qualify under the free movement agreement; citizens of other countries face stricter rules. See our guide to setting up a company as a foreigner.
Hiring staff
If your sole proprietorship grows, you can employ people. You then become an employer with duties for social insurance, accident insurance and pensions, as described in our guide to hiring employees.
Why it matters
For many people, the sole proprietorship is the right first step: it lets you test a business idea with little cost and paperwork. But because you are personally liable, it pays to understand the risks and to review your structure as the business grows.
Rules differ in detail between cantons and compensation offices. For your own situation, contact your cantonal AHV office or a Swiss fiduciary.
