6 things to know when you're self-employed in Switzerland

It's in your best interest to separate your accounts

As a self-employed person, you constantly juggle your private and professional life, including financial matters. However, you should be aware that Swiss law requires you to clearly distinguish between your business assets and your personal assets. In other words, it is illegal to include private expenses in your company's accounting.

Although not mandatory, it is strongly recommended that you open a bank account for your business, completely separate from your personal account. This way, you can manage only transactions related to your professional activity. In addition to avoiding legal issues, separating your accounts allows you to maintain a clear view of your business's financial situation, as well as your personal situation, and to prepare your tax return with peace of mind (see point 6). 

The company's debts are yours

When you work as a sole proprietor, you are tied to your company. The consequence is not insignificant: if the company has debts, you are personally liable to your creditors, and your personal assets could be seized. 

You are responsible for your own pension plan

Only contributions to the 1st pillar (AVS) are mandatory for the self-employed. Occupational pension provision is optional, as is the 3rd pillar. 

• From the start of your business, you must join a compensation fund and contribute to the 1st pillar (AVS, AI, APG), amounting to 10% of your annual income. You contribute to your future retirement pension through AVS (Old Age and Survivors' Insurance), are covered by AI (Disability Insurance) in the event of disability, and are protected by APG (Loss of Earnings Compensation) when absences related to your military obligations, your civil service, or the birth of your child prevent you from generating income. 
• Unlike an employee, you are not required to contribute to the 2nd pillar (LPP). However, you can do so voluntarily. It's even recommended because it allows you to build up, over the years, what could be a welcome supplement to your AVS pension, which is often considered insufficient to ensure a satisfactory lifestyle. To achieve this, contact several occupational pension funds and compare the plans offered to the self-employed.
• It is strongly recommended to take out a 3rd pillar plan with a bank or an insurer, depending on whether you choose a tied (3A) or a free (3B) pension plan. As a self-employed person, if you don't contribute to the 2nd pillar, you can pay up to 20% of your annual income into a 3rd pillar A¹ and the amount of your choice into a 3rd pillar B, a life insurance type.

You must always keep accounting records

Regardless of your business activity, you are legally required to track your company's finances. Your turnover determines the type of accounting.

• For amounts below CHF 500,000, you can present simplified accounting records, including only your income and expenses, your assets and liabilities, a breakdown of your withdrawals, and your private contributions. 
• For amounts above CHF 500,000, you must keep complete accounting records, including a balance sheet, a profit and loss account and notes. In this case, it is strongly recommended to seek the assistance of a fiduciary.

In both situations, your accounting records must be auditable. You must therefore take care to carefully retain – and for the legal period of 10 years –all your supporting documents, i.e. all invoices issued or paid, receipts, contracts and, of course, bank statements. 

Without an employer, it's better to get insurance

As you don't have an employer, you don't benefit from certain salary-related insurance. Plan ahead and protect yourself!

• Accident insurance (LAA). You are responsible for managing your own coverage in the event of an accident, whether at work or at home. You have two options: add this option to your health insurance (LAMal) or take out private accident insurance. 
• Loss of Earnings Insurance (APGM). In the event of illness and the inability to generate income, it's in your best interest to be insured. APGM provides a daily allowance during these periods, which, even if the contract always includes uncovered waiting time, can be a lifesaver for you and your business. 

Of course, in addition to these insurance policies, there are all the protections related to the business itself, its premises and its activity, such as property insurance and civil liability insurance, as well as certain options such as legal protection and coverage for theft or online attacks. For help, don't hesitate to ask an insurance broker or adviser.

Anticipating: the key to managing your taxes

Like salaries, income generated from self-employment is subject to tax. More specifically, your business's net profit is considered your personal income and will therefore be taxed. You must declare it in your annual tax return – just like salary, investment income and personal assets – and attach the corresponding accounting documents. 

To avoid unpleasant surprises, remember that you can choose to pay instalments from one year to the next. 

VAT (value-added tax) is mandatory for annual turnover of CHF 100,000 or more, regardless of your company's legal structure. This rule therefore also applies to self-employed individuals. Only a few rare sectors are sometimes exempt, such as medical care or culture. 

Here again, you must plan ahead. If your forecasts suggest you will exceed the legal threshold, you are expected to take the initiative and contact the FTA (Federal Tax Administration) to register. From then on, you must add VAT – at the rate corresponding to your activity – to your invoices. You then pay money to the FTA at regular intervals. The rate received will depend on whether you have chosen a net rate or a flat rate.

_{1. Amount capped at CHF 36,882 in 2025}