What rules apply if an entrepreneur would like to obtain the residence permit and start a business activity in Switzerland, i.e. for so-called self-employment?
I am often confronted with the expectation that it is enough for the entrepreneur to set up a company in Switzerland and then the rules for foreign employees of a Swiss company apply. It is not that simple: the establishment of a company and the employment of the entrepreneur by this company is also considered “self-employment”, which is subject to special rules.
Obtaining the residence and work permits is simple for entrepreneurs who are nationals of an EU/EFTA state: They have a right of residence and to self-employment on the basis of the Agreement on the Free Movement of Persons. They receive a permit for 5 years, provided that they prove that they will take up self-employment, i.e. set up a business and become effectively active (e.g. rent premises, employ staff, register with the social security authorities). If the authorities have doubts about the effective commencement of the activity or the generation of a livelihood-securing income, they can demand further proof of the activity carried out even before the expiry of the permit. If the entrepreneur can no longer cover the living expenses, they lose the residence permit.
Residence is much more difficult for entrepreneurs who do not come from an EU/EFTA state. They have no right to be granted a residence permit, but this is at the discretion of the deciding authorities. They decide according to the following criteria:
– the granting of the permit corresponds to the overall economic interest
– the financial and operational requirements necessary for the successful establishment of a business in Switzerland are met, so that it is sufficiently likely that several jobs will be created for persons who are resident in Switzerland.
In practice, this means that the entrepreneur must submit a high-quality business plan and also prove that the funds to implement the plan are available or can be obtained with a high degree of probability. The authorities are rather sceptical about start-ups whose financing appears to be rather shaky.
It is also important that the number of permits that can be issued annually is limited.
Also very important in practice is that approval must be granted by two different authorities, the cantonal authority and the federal authority in Berne. While experience shows that the cantonal authorities are very eager to attract entrepreneurs to their canton and are also very open to preliminary discussions, concrete assistance, etc., the opposite is the case with the federal authority: it acts in a sovereign manner, is hardly accessible and decides solely on the basis of the files submitted. Obtaining the consent of the federal authority is the real hurdle in the procedure.
Because of the need to obtain the consent of two authorities, the procedure also takes quite a long time: 9 to 12 months can be expected before a final decision is reached. On the other hand, the costs are not significant; only administrative fees are charged.
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