Branch of a Foreign Company

Branch of a Foreign Company

When a foreign company considers conducting commercial activities in Switzerland, it can opt for the establishment of a branch on Swiss territory. A branch represents a commercial establishment that is not considered as a separate legal entity from its parent company. As a result, the legal form of the branch is similar to that of the main company. In the following, we will examine the main characteristics of a branch in Switzerland, namely the establishment formalities, management, legal and tax obligations, dissolution, and the advantages and disadvantages of this structure.

Establishment and management

To create a branch in Switzerland, several steps and formalities must be followed. First, the foreign company must appoint a representative domiciled in Switzerland to manage the branch’s affairs. The nationality of the representative is not important, but they must be domiciled in Switzerland. Next, the foreign company must register with the Swiss commercial register and provide certain documents, including the company’s statutes, an extract from the foreign company’s commercial register, and a power of attorney authorizing the Swiss representative to act on its behalf (Art. 113-114 ORC).

The management of a branch in Switzerland is subject to the directives issued by the foreign company. The company is free to define the decision-making powers of the Swiss representative, the management of bank accounts, and the allocation of tasks within the branch. It can also appoint a board of directors for the branch in Switzerland, which can facilitate important decision-making.

Tax and legal obligations

The tax and legal obligations that apply to a branch in Switzerland are similar to those of a local company. It must comply with the same standards in terms of accounting, annual tax reporting, and payment of taxes on profits generated in Switzerland. Additionally, the branch must comply with the laws and regulations in force in the country, particularly in the areas of occupational safety and worker protection.

The taxation of the branch in Switzerland can pose tax optimization problems as the tax authorities of the parent companyName have a comprehensive view of its activities in Switzerland.


The dissolution of a branch in Switzerland, belonging to a foreign company, can be carried out according to specific legal procedures that vary depending on the legal form of the branch and the choice of the foreign company to dissolve the branch. The steps of the dissolution are similar to those of the establishment, including closing accounting records, paying any outstanding debts and taxes, and deleting the branch from the commercial register (Art. 115 ORC). To do this, the representatives of the branch must submit a request for deletion with the commercial register, accompanied by documents justifying the dissolution. If the main company is deleted, the branch is automatically deleted as well.


A foreign company can derive many benefits from setting up a branch in Switzerland, notably access to a market considered one of the most stable and prosperous in the world. In addition to this advantage, establishing a branch in Switzerland can also enhance the reputation of the foreign company due to the high-quality standards and compliance with rules and regulations in force in the country. Moreover, Swiss branches can benefit from attractive tax rates and other tax advantages, such as incentives for research and development activities. The branch can also be organized to meet the specific needs of the foreign company and its clients.


Creating a branch in Switzerland can be costly due to incorporation fees, administrative costs, and staff costs. However, branches are considered an extension of the parent company, which can hold it liable for all activities and debts of the branch in Switzerland. Moreover, currency fluctuations can affect the profitability of the branch. Foreign companies operating in Switzerland may also face conflicts of laws between Swiss legislation and that of their home country. Lastly, the Swiss market is highly competitive, with numerous local and international companies in competition.

Adhering to legal and tax procedures

In conclusion, the creation of a branch in Switzerland for a foreign company requires in-depth consideration to assess the advantages and disadvantages. It is essential for companies to adhere to legal and tax procedures in collaboration with local professionals to avoid complications. It is strongly recommended to consult a lawyer to obtain personalized advice on the steps to follow when establishing a branch in Switzerland. This will enable companies to make informed decisions and maximize the benefits of expansion into the Swiss market while minimizing risks.

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