What a branch is
A branch is a registered establishment of the foreign company, without separate legal personality. It appears in the Swiss commercial register with a representative domiciled in Switzerland. No capital is required. The foreign company signs contracts and bears liability directly. Profits attributable to the branch are taxed in Switzerland.
What a subsidiary is
A subsidiary is a Swiss company, usually a Sàrl or SA, owned by the foreign parent. It has its own capital, its own liability, its own accounts. It can be sold, financed or partly opened to local partners. Swiss banks, landlords and public buyers are generally more comfortable contracting with a Swiss entity.
How to choose
A branch is usually preferred when the foreign company must remain the contracting party (framework agreements, regulatory licences held by the parent), when losses are expected in the first years and the home country allows their consolidation, or when the Swiss activity is a support function. A subsidiary is usually preferred when the Swiss operation will hire, invoice locally, hold assets or grow on its own.
- Branch: no capital, direct liability, simpler exit
- Subsidiary: capital, limited liability, local credibility
- Both: resident representative, Swiss accounts, Swiss tax on Swiss profits
A common mistake
Choosing a branch to “test the market” and then converting to a subsidiary two years later, once contracts and staff exist. The conversion is possible but costs more than starting with the right form. The assessment looks at the three-year horizon, not the first invoice.
Authorities decide; we prepare and carry the file. No timeline or outcome is guaranteed.