🇨🇭 Switzerland

Switzerland is the low-tax country nobody raises an eyebrow at. No special regime to apply for, no blacklist to explain to your bank – just 26 cantons undercutting each other for companies and residents like petrol stations on the same street, and a few of them winning by a mile. In the city of Zug, a company pays about 11.71% on its profit and a single person earning CHF 100,000 pays roughly CHF 5,300 in income tax.

The catch is equally Swiss: precise and non-negotiable. You have to live there, run the business from there and pay for one of the most expensive places on earth. Here’s how it works as of September 2026, with Zug as our reference canton.

Is it for you?#

Switzerland rewards people who move for real. The savings sit at canton level, so they follow your home and your company’s management – not a letterbox or a nominee director. Live in Zug, run your GmbH from an office in Zug, send your kids to school there, and the numbers are excellent. Nobody will ever question them either, which is more than most low-tax addresses can say.

It fits well if you’re an EU or EFTA citizen with a profitable, owner-run business (consulting, software, trading, holding), you care more about stability and reputation than the last percentage point, and you’ll pay premium prices for premium everything without sulking. It also fits wealthy people who stop working: lump-sum taxation gets attractive once your income and wealth are large enough.

It’s the wrong choice if you want a company that runs itself from elsewhere, you’re optimizing for low living costs, or you hold a non-European passport and bring neither investment nor jobs. And if your business can’t pay you a Swiss salary, stop here – the tax office expects one, and it knows what Swiss salaries look like.

Compare it with its tiny neighbour Liechtenstein (better for pure wealth structures, much harder to move to) or run your own numbers in the tax calculator.

The company#

GmbH or AG#

Two vehicles matter:

• GmbH – limited liability company, CHF 20,000 share capital, fully paid in. The default for owner-managed businesses.
• AG – stock corporation, CHF 100,000 share capital, at least CHF 50,000 paid in. Better for investors, share transfers and a later sale.

Both need a notarised deed, a blocked capital deposit account at a Swiss bank and registration in the cantonal commercial register. The KMU portal puts formation costs at a few thousand francs (notary, advice, CHF 600 register fee). With documents ready, you’re registered in about two weeks – fast, by European standards. The rule that trips people up: someone resident in Switzerland must be able to represent the company. If that’s not you, you’ll need (and pay) a local director.

How profits are taxed#

Corporate tax comes in three layers, because one tax office would be un-Swiss: federal (8.5% on profit after tax, ≈7.8% before tax), cantonal and communal. According to KPMG’s Swiss Tax Report 2026, the combined rate is 11.71% in the city of Zug and 20.54% in Bern; PwC puts the national range at 11.66–20.54%. Lucerne cut its rate to 11.66% and now sits a hair below Zug; Nidwalden is within a fraction of both. Since 2020, cantons can add a patent box and extra R&D deductions. The 15% global minimum tax only bites for groups with €750 million+ turnover. Your GmbH is not the target.

Dividends carry a 35% withholding tax – a deposit the state keeps until you prove you’re honest. Swiss residents get it back in full when they declare the dividend; non-residents reclaim part of it under a treaty, typically ending at 15%. Distributions out of capital contribution reserves (money you paid in) are free of withholding tax.

Worked example: €100,000 profit in a Zug GmbH#

Figures rounded; income tax from the ESTV calculator (2026, single, city of Zug). We use euros for comparability – the logic is the same in francs.

Paying everything as dividends looks great on paper and doesn’t survive contact with Swiss social security. It expects an owner-manager to draw a market salary and can reclassify excessive dividends. Salary is deductible for the company and taxed at about 5% on CHF 100,000 in Zug, but it costs social contributions (AHV/IV/EO plus unemployment insurance, split between you and the company, plus a pension fund). The sweet spot is a reasonable salary plus dividends. Your fiduciary will model it, in a spreadsheet with more tabs than you’d like.

Running costs, banking and substance#

A small GmbH typically spends CHF 2,000–5,000 a year on bookkeeping, VAT returns, annual accounts and tax return, plus payroll. Small companies can skip the audit (opting out) if all shareholders agree – do it. Budget around €5,000 a year if you run it yourself from home; add a domicile service or local director if you don’t.

Banks: once you’re resident, PostFinance, the cantonal banks or UBS will open a business account, usually after a meeting with a relationship manager and a very good coffee. Non-resident owners, some nationalities and US persons get longer reviews or a polite, beautifully formatted no. Numbered accounts are history – Switzerland exchanges bank data automatically under CRS, so forget the movie version.

Substance is the whole point. A Zug company managed from Munich is a Munich company in the eyes of the German tax office, and it will say so in writing. Read our guide on place of management before you plan anything clever.

Living there#

Residence routes#

• EU/EFTA citizens. Free movement makes this easy. Show a real self-employed activity (registered business, business plan, customers) and you get a five-year B permit, usually within weeks. Without working you need sufficient funds and Swiss health insurance. The SVP’s “No 10-million Switzerland” initiative, which could have ended free movement, was rejected on 14 June 2026.
• Non-EU founders. Much harder, and the Swiss don’t pretend otherwise. Permits for self-employment fall under annual quotas and need a lasting positive effect on the Swiss economy – jobs, investment, innovation – plus a solid business plan and capital. Canton and the State Secretariat for Migration both have to agree.
• Wealthy non-workers. Retirees 55+ with ties to Switzerland, or people whose lump-sum tax is of “important fiscal interest” to the canton, can get a permit without working. The second route is negotiated case by case, and cantons expect a lot more than the minimum. “Important fiscal interest” means exactly what it sounds like.

After 10 years you can get a C permit (settlement), many EU nationals after five. Citizenship needs 10 years of residence and a C permit; dual nationality is allowed.

Personal tax#

Swiss residents pay progressive federal income tax (up to 11.5%) plus cantonal and communal tax. In the city of Zug, CHF 100,000 gross salary costs about CHF 5,300 in income tax (2026), CHF 200,000 about CHF 23,000. The same CHF 100,000 in the city of Zurich costs about CHF 11,800. Every canton also has a wealth tax – low in Zug, but it exists, which surprises people who only read the headlines. Private capital gains on shares are generally tax-free – with strict rules on “indirect partial liquidation” and professional trading. The Juso inheritance tax initiative (50% above CHF 50 million) was rejected by 78% in November 2025. Swiss voters get asked whether they want higher taxes and, remarkably often, say no.

Lump-sum taxation#

Non-Swiss citizens who move to Switzerland for the first time (or after 10 years abroad) and don’t work in Switzerland can be taxed on their living expenses instead of their income. The tax base is the highest of: actual worldwide living expenses, seven times the rent, the federal minimum of CHF 435,000 (2026) and the cantonal minimum – CHF 500,000 in Zug. Normal rates apply to that base. Managing your own wealth is fine; running your company from your Swiss living room is not, and “just a few emails” is how people lose the deal. It’s abolished in Zurich, Schaffhausen, both Basels and Appenzell Ausserrhoden.

Daily life#

Here’s where the tax savings go to die. Zug is the most expensive city in Numbeo’s ranking: 123.2 excluding rent, 23% above New York. Rents are steep, and basic health insurance is mandatory and paid per person – yes, per child too. In return you get a Numbeo safety index of 80.7, spotless trains, lakes and mountains on your doorstep and some of the best schools and hospitals in the world. English works in business (Switzerland scores 564 in EF EPI, higher in Zurich and Zug), but the admin runs in German, the recycling rules deserve their own guide and friendships take years, not weekends.

The catches#

Step by step#

FAQ#

Sources#

• PwC Worldwide Tax Summaries – Switzerland, corporate taxes
• KPMG Switzerland – Swiss Tax Report 2026
• ESTV – Swiss tax calculator
• ESTV – withholding tax
• Fedlex – Federal Act on Direct Federal Taxation (DBG)
• Canton of Uri – lump-sum taxation leaflet 2026
• Canton of Zug – tax law (BGS 632.1)
• KMU portal – GmbH formation
• State Secretariat for Migration (SEM)
• SIF – Swiss double taxation agreements
• swissinfo – results of the 14 June 2026 vote
• SRF – inheritance tax initiative rejected (30 November 2025)
• Numbeo – Zug