Starting as a freelancer in Switzerland and hearing about the «sole trader» (Einzelfirma)? Do you need to register in the Commercial Register? Is it mandatory?
The answer depends on your turnover. Here are the clear rules.
What is a sole trader in Switzerland?
A sole trader (Einzelfirma in German, raison individuelle in French) is the simplest legal form for carrying out a business activity in Switzerland in your own name. It has no separate legal personality — you and your business are one and the same legally. You are personally liable for all obligations with your entire personal assets.
Unlike a GmbH (LLC) or AG (corporation), a sole tradership requires no minimum capital and is created without a notary. It's the starting form for the vast majority of Swiss freelancers: tradespeople, consultants, designers, therapists, etc.
Your business name must include your surname and/or first name (e.g. «John Smith Consulting»). Without a Commercial Register entry, you cannot use a pure brand name.
Commercial Register: mandatory or optional?
Registration in the Commercial Register (CR) for a sole trader is mandatory once your annual turnover reaches CHF 100,000 (art. 36 ORC — Commercial Register Ordinance).
Below this threshold, registration is optional. You can operate as a freelancer without CR registration.
However, voluntary registration has advantages:
- Protection of your business name in the canton
- More credibility with B2B clients and banks
- Easier opening of a professional bank account
- Visibility in Zefix (the federal online Commercial Register)
Registration cost: varies by canton, generally between CHF 100 and CHF 300.
Accounting obligations for sole traders
Obligations depend on your size:
Sole trader not registered in CR: no formal accounting obligation under CO. But keep invoices and receipts — the FTA may request them.
Sole trader registered in CR with turnover < CHF 500,000: must keep at least «simplified accounting» — a record of income and expenses (art. 957 CO). No formal balance sheet required.
Sole trader with turnover > CHF 500,000: full accounting mandatory (balance sheet + income statement), following the same rules as companies.
In all cases, keep accounting records for 10 years (CO art. 958f). Pli helps you maintain your invoice register and export data for your accountant.
Sole trader vs GmbH: when to switch?
A sole tradership is ideal for starting out. But certain signals indicate it's time to move to a GmbH:
High financial risk: significant liability risks (construction projects, expensive equipment, contracts with large companies) → a GmbH limits liability to the share capital (minimum CHF 20,000).
Taking on partners: a sole tradership only accepts one owner. For partnerships, a GmbH or AG is required.
Image and growth: some B2B clients (large groups, institutions) prefer contracting with a company.
Tax optimisation: beyond a certain income level, a GmbH may be more tax-efficient. Ask your accountant.
Conversion from sole trader to GmbH is possible at any time via a notary, without interrupting your business.
Sole trader and AHV
The existence of a sole tradership (registered or not) does not change your obligation to contribute to AHV. As soon as you carry out a self-employed activity, you must register with a compensation office — regardless of your turnover.
The sole trader structure is the natural starting point for any Swiss freelancer. Simple, quick to set up, no minimum capital — it lets you start immediately. Manage your invoicing and accounting with Pli from day one to have a clear picture of your income and obligations.