The sole proprietorship (entreprise individuelle, Einzelunternehmen in German) is the simplest and most widespread legal form in Switzerland. It accounts for nearly 60% of commercial register inscriptions. Ideal for freelancers, consultants, craftspeople, therapists and small traders, it allows you to start a business quickly, with no minimum capital and minimal administrative formalities.
This guide presents everything you need to know about setting up and managing a sole proprietorship in Switzerland, with a focus on the specifics of the canton of Geneva.
What is a sole proprietorship?
A sole proprietorship is not a company in the legal sense. It is a status allowing a natural person to carry out a commercial activity in their own name. The entrepreneur and their activity form a single legal and fiscal entity. There is no separation between private and business assets.
The main characteristics of a sole proprietorship are:
- No minimum capital required: you start with your own resources.
- Unlimited liability: the entrepreneur is liable for debts with all personal assets.
- One person only: the sole proprietorship is reserved for individual natural persons (no partners).
- Business name: must contain the entrepreneur's surname (e.g. "Dupont Consulting" or "Marie Dupont, architect").
- Optional CR inscription: mandatory only from CHF 100,000 in annual revenue.
- Simplified accounting: income and expense accounting is possible below the thresholds.
Advantages of a sole proprietorship
| Advantage | Detail |
|---|---|
| Simplicity of formation | No notary, no articles of association, no capital to deposit. Quick and inexpensive CR inscription. |
| Low costs | Minimal formation costs (~CHF 1,020 with AX-Fiduciaire + CR). No complex accounting costs. |
| Freedom of management | The entrepreneur makes all decisions alone, without a general meeting or auditing body. |
| Simple taxation | No double taxation (profit + dividends). Profit is taxed once as personal income. |
| Advantageous pillar 3a | Maximum deduction of CHF 36,288/year (2026) without BVG affiliation, compared to CHF 7,258 for an employee. |
| Simplified accounting | Simple income/expense accounting if revenue < CHF 500,000 and not inscribed in the CR. |
Disadvantages and limitations
- Unlimited liability: this is the main risk. Professional creditors can seize your private assets.
- Tax progression: above CHF 80,000-100,000 in profit, progressive taxation becomes less advantageous compared to an LLC.
- No asset separation: in the event of divorce, business assets are included in the matrimonial regime settlement.
- Higher social charges: the self-employed person pays the full AHV/IV/APG contributions (~10.6%) on net income, without employer/employee sharing.
- Limited credibility: some clients, suppliers or banks prefer capital companies (LLC, corporation).
- Difficulty raising funds: no shares or units to offer investors.
- Continuity: the sole proprietorship is tied to the person. In the event of death or incapacity, the activity ceases (unless previously transformed).
Steps to set up a sole proprietorship in Geneva
Step 1: Declare the start of activity
As soon as you begin your self-employed activity, you must register with the competent AHV compensation fund. In Geneva, this is the Office cantonal des assurances sociales (OCAS) or your professional fund. The OCAS will determine your self-employed status based on criteria such as the number of clients, entrepreneurial risk and organisational independence.
Step 2: Commercial register inscription (if applicable)
If your annual revenue exceeds CHF 100,000 (or if you wish to benefit from name protection), inscribe your sole proprietorship in the Geneva commercial register. The fees are approximately CHF 120. The business name must contain your surname.
Step 3: VAT
VAT registration is mandatory if your annual revenue exceeds CHF 100,000. Below this threshold, registration is optional. The standard VAT rate in Switzerland is 8.1% (2026). Certain activities benefit from reduced rates (2.6% for essential goods, 3.8% for accommodation).
Step 4: Insurance and pension provision
- Health insurance (LAMal): mandatory, on a private basis.
- Accident insurance (LAA): optional for the self-employed (but strongly recommended).
- BVG (2nd pillar): optional for the self-employed. You can voluntarily join a pension institution.
- Pillar 3a: tax deduction of CHF 36,288/year (2026) without BVG, or CHF 7,258/year with BVG affiliation.
- Loss of earnings insurance (APG illness): optional but strongly recommended to cover periods of work incapacity.
Step 5: Setting up accounting
If your revenue is below CHF 500,000 and you are not inscribed in the commercial register, simple income and expense accounting suffices (art. 957 para. 2 CO). Above this threshold, you must maintain double-entry bookkeeping (balance sheet, income statement).
Even with simplified accounting, it is essential to keep all supporting documents (invoices issued, invoices received, bank statements, receipts). Our accounting service is adapted to the needs of the self-employed with packages from CHF 149.-/month.
Sole proprietorship taxation in Geneva
The profit of a sole proprietorship is taxed as self-employment income at the progressive income tax rate. There is no concept of "salary" for the self-employed: they simply withdraw the funds they need to live on (private withdrawal, not tax-deductible).
Indicative tax rates in Geneva (2026)
| Taxable income | Approximate marginal rate (federal + cantonal + municipal, City of Geneva) |
|---|---|
| CHF 30,000 | ~15% |
| CHF 60,000 | ~25% |
| CHF 100,000 | ~32% |
| CHF 150,000 | ~37% |
| CHF 250,000+ | ~44% |
Key point: from CHF 80,000-100,000 in annual profit, the overall tax burden (tax + AHV) of a sole proprietorship generally exceeds that of an optimised LLC (salary + dividends). This is the threshold at which it becomes worth considering a transformation into an LLC. See our sole proprietorship vs LLC comparison.
When to switch to an LLC?
Transforming a sole proprietorship into an LLC is a key moment in an entrepreneur's life. The main triggers are:
- Annual profit above CHF 80,000-100,000: salary/dividend optimisation becomes more advantageous.
- Need to limit liability: the activity involves risks (significant mandates, inventory, employees).
- Seeking partners or investors: the LLC allows partners to be integrated.
- Commercial credibility: some clients require a capital company.
- Succession planning: the LLC facilitates business transfer.
Good to know: the transformation of a sole proprietorship into an LLC can be done in a tax-neutral manner through a contribution in kind, provided the conditions of art. 19 LIFD are met (continuity of operations, no distribution of hidden reserves for 5 years). AX-Fiduciaire supports you through this delicate transition.
Sole proprietorship formation costs
| Item | Amount |
|---|---|
| AX-Fiduciaire package | From CHF 900.- |
| Commercial register | ~CHF 120 (if inscribed) |
| Notary | Not required |
| Capital to deposit | None |
| Total | ~CHF 1,020 |
Estimate your costs online or contact us for personalised support.
Documents required
- Copy of identity document (passport or ID card)
- Proof of domicile in Switzerland
- Description of planned activity
- Desired business name (must contain your surname)
- Registered office address (home or commercial address)
- For foreigners: copy of residence permit authorising self-employment (B, C or L permit with authorisation)
Looking to start as a self-employed professional in Geneva? Request your free quote. Our team guides you at every step to ensure your launch goes as smoothly as possible.