01What Is a Sole Proprietorship?
The sole proprietorship (Einzelfirma) is the simplest legal form in Switzerland. You do not need a partnership agreement or co-founders. You are simultaneously the owner, managing director and sole decision-maker. A sole proprietorship is not a separate legal entity -- legally speaking, it is simply you running a business.
This has two important consequences: First, formation is extremely straightforward. No notary, no minimum capital, no articles of association. You register with the OASI compensation fund (Ausgleichskasse) as self-employed -- and you are done. Second, it also means you are personally and unlimitedly liable with your private assets. There is no separation between business and personal assets.
In practice, the sole proprietorship is the most popular legal form for freelancers, consultants, tradespeople and anyone starting out on their own. Over 60% of all Swiss businesses are sole proprietorships. Our article on becoming self-employed in Switzerland provides an overview of all the key steps.
02Requirements
The barriers to founding a sole proprietorship are deliberately kept low. Swiss law aims to make it easy to become self-employed. Here are the key points:
- No minimum capital: You do not need a single franc of start-up capital. There is no legal requirement
- No notary: You do not need to visit a notary. No public notarisation, no articles of association
- Company name must contain your surname: This is a legal requirement. You may add additions (e.g. 'Mueller Web Design' or 'Anna Meier Coaching'), but your surname must appear in the company name
- Residence in Switzerland: You need a residence or at least a fixed business address in Switzerland
- Legal capacity: You must be of legal age (18 years) and have capacity to act
03Step by Step: Setting Up a Sole Proprietorship
Setting up a sole proprietorship is not a bureaucratic challenge. Most steps can be completed online or by post. Here is the complete process:
Legally, your sole proprietorship exists from the moment you carry out your first business activity. There is no formal act of formation
This is the most important step. Register with the cantonal compensation fund (Ausgleichskasse) of your canton of residence as 'self-employed'. You will need: ID document, proof of self-employment (e.g. first invoices, contracts or a business plan), and if applicable, confirmation of deregistration from your previous employer
Open a separate bank account for your business. Not legally required, but strongly recommended -- it cleanly separates private and business finances
Below CHF 100,000 in annual revenue, registration in the Commercial Register is voluntary. Above that, it becomes mandatory (more on this in the next section)
From CHF 100,000 in worldwide annual revenue, you are subject to VAT. Below that, you can register voluntarily. Registration is done online with the FTA (Federal Tax Administration)
From day one, you must record income and expenses. A simple income-expenditure statement is sufficient for revenue under CHF 500,000
04Commercial Register Entry: Mandatory or Voluntary?
The Commercial Register entry is one of the most misunderstood topics for sole proprietorships. The rule is clear: from an annual revenue of CHF 100,000, registration in the Commercial Register is mandatory. Below this threshold, it is voluntary -- but often worthwhile nonetheless.
Advantages of a voluntary Commercial Register entry:
- Name protection: Your company name is protected in your canton. No one else may use a confusingly similar name
- Greater trust: A Commercial Register entry looks professional. Clients and partners can see that your business is registered
- Prerequisite for certain contracts: Some clients (especially public sector bodies) require a Commercial Register entry
- Bank accounts: Some banks require a Commercial Register extract to open a business account
Disadvantages: The entry costs approximately CHF 120-400 depending on the canton, and you will be publicly visible in the register. In addition, the debt collection office can directly access your Commercial Register data.
| Annual revenue | Commercial Register | Bookkeeping |
|---|---|---|
| Under CHF 100,000 | Voluntary | Simplified (income-expenditure) |
| CHF 100,000 -- 499,999 | Mandatory | Simplified (income-expenditure) |
| From CHF 500,000 | Mandatory | Full (double-entry) |
05Insurance and Pension Provision
As the owner of a sole proprietorship, you are self-employed. This fundamentally changes your insurance situation compared to being an employee. Some insurance is mandatory, while other types are voluntary but recommended. Everything you need to know about OASI contributions for the self-employed is covered in a separate article.
| Insurance | Status | Details |
|---|---|---|
| OASI/DI/IC (AHV/IV/EO) | Mandatory | Contributions: 5.371% to 10.6% of net income. Registration with the cantonal compensation fund. Minimum: CHF 514/year |
| Occupational pension (BVG, 2nd pillar) | Voluntary | Self-employed persons can voluntarily insure themselves with a pension institution. Without BVG, there is no employer contribution |
| Accident insurance (UVG) | Situation-dependent | Mandatory only if you employ staff. For yourself: recommended, but voluntary |
| Daily sickness allowance | Voluntary | Strongly recommended. As a self-employed person, you have no right to continued salary payment in case of illness |
| Professional liability | Voluntary | Very sensible depending on the industry. Protects against damages you cause to third parties in the course of your work |
| Pillar 3a | Voluntary | Tax-deductible. Without BVG: max. 20% of net income (max. CHF 36,288/year 2026). With BVG: max. CHF 7,258/year |
06First Steps After Formation
You are officially self-employed -- what now? In the first few weeks after formation, you should set up a few fundamental things so that your sole proprietorship runs professionally from the start. This includes choosing the right business account.
Record every income and every expense. Below CHF 500,000 annual revenue, a simple income-expenditure statement is sufficient. Set up a system -- whether Excel, software or an app like einzly
Will you likely reach CHF 100,000 in revenue in the first year? Then proactively register with the FTA for VAT. You can also register voluntarily, e.g. if you have large purchases (input tax) to reclaim
Your invoices must contain certain mandatory information: name and address (of both the invoicing party and the recipient), date, service description, amount, payment terms. If subject to VAT: VAT number and tax amount
Make it a habit from the start. Every business receipt is immediately digitised or filed. There is a 10-year retention obligation -- better to start early than to search later
Consistently separate private and business finances. A dedicated business account makes bookkeeping vastly easier and protects you during a tax audit
07Start Your Sole Proprietorship with einzly
einzly was built for exactly this moment: you have set up your sole proprietorship and now need a tool that handles invoicing, bookkeeping and VAT without prior knowledge. No accounting degree required, no accountant subscription.
What einzly offers from day one:
- Invoices with Swiss QR Code: Create professional invoices with a QR payment slip in seconds. All legally required information is included automatically
- Automatic bookkeeping: Record income and expenses, and einzly categorises them automatically and creates your income-expenditure statement
- VAT return: If you are subject to VAT, einzly calculates everything automatically -- whether you use the effective method or the flat tax rate
- Digital receipts: Photograph receipts directly in the app. They are automatically linked to the correct transaction
- Year-end closing as PDF/ZIP: At the end of the year, you export everything at the click of a button -- ready for the tax office or your accountant