Tax for the creation of a company

Which tax when setting up a company and stamp duty?

In a process of creation, the first tax to pay is the tax for the creation of a company.

It is the collected capital at the time of the creation of the company which entails the payment of this tax or of this stamp duty of issue levied at the rate of 01%. During this operation, the contributions in kind are valued according to their current market price.

Whether it is a joint stock company, a limited liability company, a cooperative or other, this step is necessary. This action allows the issuance of participation rights that would ensure access to a better long-term tax regime for companies. And at the same time, this issue will increase the face value of the company.

In other words, these equity securities would give each issuing company greater control and influence.

It is important to note that companies issuing expensive equity securities exceeding CHF 1,000,000 in capital are not subject to duty stamp.

Certain operations are also exempt, such as mergers, transformations or splits of companies. As well as foreign companies that transfer their headquarters to Switzerland.

This stamp duty is challenged whenever the shareholders or the owner of a company decide to increase the amount of the company’s capital.

Stamp duty in Switzerland

The stamp duty is provided by the confederation. These rights concern some legal exchanges especially concerning the issue and trading of securities. This includes the formation and circulation of capital, but also the payment of insurance premiums. The stamp duties are acquired and applied 30 days after the issue of the legal document.

There are 3 types of stamp duties:

The right to issue
The right to negotiate
The law on insurance premiums

The right of issuance in Switzerland

The right of issuance concerns the creation of companies. It puts in order the procedures concerning the creation of the company and the documents that will go with it. With this in mind, how is the right of issuance in Switzerland characterized?

The principles of the right of issuance

The right of issuance is devoted exclusively to the creation, at cost or free of charge, of Swiss participation rights and bonds. This applies to Swiss companies based in Switzerland. This right is, therefore, seen during the issue as well as during the increase of the nominal value of participation rights in several forms.
The form of shares of S.A.
The form of shares of a limited liability company
The form of shares in cooperative societies
The form of profit sharing certificates and participation certificates of Swiss companies or commercial enterprises which have a public law status

The law therefore concerns the issuance of bonds and money market paper by persons residing in Switzerland. The emission right is valued at 1.0 % on the Swiss participation rights.

Details and exceptions on the right of emission

The foundation of companies or the increase of the capital of corporations or limited liability companies by means of participation rights issued at a high cost is also exempted from tax, which is estimated at one million francs as of ^{January 1, 2006.} The tax liability arises for the company for the participation rights.

Equity securities created or increased in connection with mergers, conversions or divisions of corporations or cooperatives, on the other hand, are exempt from duty. The same applies to transfers to Switzerland of the registered office of corporations resident abroad.

The right to negotiate in Switzerland

Referring to taxes levied by the Swiss authorities, the negotiation fee comes into play when it comes to legal transactions, including securities trading. The traders concerned by this field are, among others, banks and Swiss pension institutions.

There is a difference in law between individuals residing in Switzerland and those residing abroad, 1.5% for the former and 3.0% for the latter. The amount of the fee is deducted according to the countervalue of the title issued.

Having been the focus of discussion in this country for some time, stamp duty has gone through many changes. The establishment of some exemptions consisting in the reduction of duty under a certain amount and even under certain conditions. Indeed, the goal being the maintenance of the national economy and also the maintenance of the national image.

The law on insurance premiums

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