Switzerland Fact-File Part 5:
Small Business Incentive Programs

5.1 Switzerland Small Business Support Schemes

Government and Municipal Incentive Programs for Small Business

Some cantons offer grants to companies where new jobs are created. Typically, this is where new businesses create a minimum of 30 new jobs within the first five years of the commencement of business. The amount of the grant can vary between CHF5,000 and CHF10,000 for each job created. The jobs must be permanent jobs and grants depend on the priority given to the project by the cantonal authorities. The amount of the grant is at the discretion of each cantonal authority and is in respect of the initial creation of a new job.

Allowances for technical training are also often on offer to encourage the recruitment of local workers. The allowance is a contribution towards an employee’s salary (for new jobs only). The allowance can be up to 50% of the employee’s gross salary and will normally be paid for up to six months. A ceiling of CHF15,000 applies.

Business Start-up Schemes

The Swiss Government provides federal loan guarantees to cantons wishing to offer incentives for new businesses to set up in a particular region of Switzerland. The forms of incentive on offer have been largely decentralized and autonomy given to the cantons to offer fiscal and other incentives to new businesses setting up in their area. Incentives are not restricted to domestic investors – foreign investors are equally eligible to receive the benefit of incentives. Cantons do reduce corporate tax rates in competition with other cantons, which can only benefit the new businesses seeking to locate to Switzerland.

Investment companies (venture capitalists) that invest 50% of their fund assets in helping to establish a new Swiss company can receive tax breaks. These tax breaks are against federal tax liability and are restricted to certain regions of specific Swiss cantons. The maximum tax break is 50%.

The Swiss Society for Hotel Credit (SGH) assists hotels to fund infrastructure expenditure by way of arranging loans and assisting with the drafting of business plans.

Support for IT projects is available in certain regions. The Foundation for Technical Innovation (FIT) is active in the canton of Vaud and Finergence in the canton of Neuchatel and they offer support for high-tech projects from start-up through to commencing production of a first new product. Up to CHF100,000 in financial backing is available.

Support Programs for Bank Lending

The Swiss government can assist new SMEs and entrepreneurs via a scheme where the government offers commercial guarantees to back bank funding. Loan guarantees of up to CHF500,000 are available and the Swiss Federal Government underwrites 65% of the debt exposure.

There are also a number of regional co-operatives in Switzerland that assist in obtaining bank funding for a new or growing business.

State-backed funding guarantees are overseen by the State secretariat for Economic Affairs (SEC)). www.seco.admin.ch.

Major Swiss banks have traditionally been keen to support new business initiatives in the country and to offer alternative forms of financing to tailor an individual person or company’s particular needs.

Introductory Guides

Switzerland Artist Tax Guide

Switzerland Contractor Tax Guide

Switzerland Entrepreneur Tax Guide

Switzerland Professional Tax Guide

Switzerland Small Business Tax Guide

Switzerland Sportsperson / Entertainer Tax Guide

Fact-File

Part 1: Switzerland Business Formation for Individuals

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