​Trading Company

 

Swiss Trading Companies are very popular and can be used in a wide variety of situations either alone or as part of an international group structure. Good examples are for the purchases and sales of goods or services between different countries or parties with the Swiss Trading Company interposed between Suppliers or Customers (typically in higher tax jurisdictions) thus allowing a retention of margin by the Swiss Company. This might also apply where an existing Company might decide to use a Swiss Company to conduct its Purchasing or International Sales.



Where a significant amount of business is transacted outside of Switzerland a Swiss Trading Compnay also enjoy special tax privileges making them an attractive vehicles tax effective international trading operations.



Swiss Trading Companies can be of different legal constitutions, e.g either a GmbH or AG or a branch office of a foreign company. To benefit from special tax privileges if the underlying business activities are primarily related to business or trade outside of Switzerland and any business activity in Switzerland itself is of a secondary nature then the Company may attain a tax classification as a "Mixed" Company.

Swiss Trading Companies classified as Mixed companies may have their own staff and offices. A locally appointed Nominee Swiss Director and service contract with a Fiduciary is often used to provide the element of local staff and services where recruitment of full time staff is not necessary or economically justifiable.



Mixed Companies are a useful vehicles and widely used for international trading activities and used in international tax planning , often as a hub for varying group activities .



Most Cantons grant Mixed Companies extensive tax privileges with income and capital taxes taxed at reduced rates.

Federal taxes are applied at normal rates (Income tax 8.5% ) The overall “blended” rate can be in the range of 10-12% depending on the size of net profits.



The following are qualifying conditions for a Swiss Trading Company to be treated as a “Mixed Company” for tax purposes:

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• The underlying  business activity must be performed predominantly outside of Switzerland, i.e. at least 80 % of both sales and purchases must take place outside of Switzerland (the bi-dimensional principle). Under exceptional circumstances purchases may be made in Switzerland as long as the payment is on an arm's length basis.
• Mixed companies are not allowed to have their own production or manufacturing activities in Switzerland.