If you are a Thai or an expat starting a business in Switzerland, the legal form is not just “paperwork.” In practice, it determines your liability, taxes, social security, bank account and contracts, and also how “serious” your business appears to landlords, suppliers, or customers.

I am deliberately keeping this practical and easy to understand, without legal jargon, with a focus on typical businesses such as massage/beauty, gastronomy, online retail, consulting/agencies, tourism, and services.

The most important things first

1) Having your own company does not solve residence or permit issues

A company does not replace a work permit, residence permit, or any required self-employment authorization. However, it is often an important building block, because authorities and banks like to see clear structures.

2) Liability in Switzerland

Many people underestimate that with a sole proprietorship or an unintended simple partnership, you are personally liable with your private assets. Especially with lease agreements, employees, products, or damage claims, this can become expensive very quickly, or even lead to financial ruin.

3) Starting with two people? Be careful: a “simple partnership” can arise faster than you think

If two people just “start working together” with shared clients and a shared cash flow, a simple partnership can arise automatically, often unintentionally, with joint and several liability. In addition, both persons are generally entitled to 50% of the profit. This can quickly lead to disputes if one person invests much more time and money into the project than the other. Better: regulate things in writing early on or choose a suitable legal form from the start.

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Different legal form explained

Legal form	Typical for whom?	Liability	Capital / Incorporation	Taxes (very rough)	Advantages	Disadvantages
Sole proprietorship	Solo self-employed persons, small services / trade	Unlimited (private + business assets)	No minimum capital; easy to start	Income / wealth taxed at owner level	Fast, inexpensive, few formalities	Full risk; business name restrictions; may appear “small” to business partners
GmbH / LLC	SMEs, 1 or more founders, scalable, liability protection	In principle only company assets (share capital)	Share capital required by law, min. CHF 20’000; commercial register entry	Corporate profit/capital tax + taxation of salary/dividends (possible double taxation)	Serious image, clear structure, good for partners/investors	More effort and cost than a sole proprietorship
AG / Ltd.	1 or more founders, growth, investors, higher turnover, liability protection	In principle only company assets	Share capital required by law, min. CHF 100’000; commercial register entry	Similar to GmbH (possible double taxation)	Very established, easier transfer of shares, often inspires strong trust	Higher incorporation/formal costs, more governance requirements
Association	Non-profit purposes, communities, projects	In principle only association assets	Easy setup (articles, governing bodies), sometimes register entry	Depends on activity / tax status	Very flexible for non-commercial purposes	Often unsuitable for classic profit-driven businesses
Simple partnership(default fallback structure)	Two or more people who “just start together”	Unlimited and joint/several	No formal requirements	Usually taxed at partner level	Fast, uncomplicated	Often unintended: if you start together without a contract, you can quickly end up here – with full liability. Better regulate it properly
General partnership	Two or more people running a business together	Unlimited and joint/several	Commercial register entry	Taxed at partner level	Clearer than a simple partnership, well established	Full liability remains
Limited partnership(less relevant)	Mix of active and passive partners	General partner unlimited; limited partner up to agreed amount	Commercial register entry	Usually taxed at partner level	Allows “silent” investors	More complex; rarely used in everyday practice
Cooperative(less relevant, but interesting)	Joint economic activity (e.g. housing, purchasing, platform)	In principle only cooperative assets	Several members required; rules/governing bodies	Depends on structure	Democratic structure, mutual benefit	Less “classic” for startups

Which legal form fits which type of business?

A) Massage / Beauty / Nails / Cosmetics (studio or mobile)

• Mobile and solo, with low risk: often a sole proprietorship works well but keep liability and contracts in mind. 
• With a studio, expensive rent, equipment, and employees: usually better as a GmbH / LLC
• Once you need to invest around CHF 20,000, it is often smarter to set up a GmbH right away. 
• Why? Lease agreements, customer injuries, and employees all increase liability risk. A GmbH also often looks more serious to landlords and banks. 

B) Gastronomy / Take-away / Food Concept

• Almost always:  LLC or Ltd. if larger growth is planned 
• Why? High risks from rent, staff, hygiene, suppliers, and liability. Many restaurant businesses do not survive the first few years, and then you do not want to be personally liable for the debts. A sole proprietorship can become uncomfortable very quickly. 

C) Online Shop / Import / Trading (e.g. Thai products)

• Small start: sole proprietorship possible 
• With inventory, larger volume, returns, and product liability: LLC
• If you later want partners or investors: Ltd. or at least structure things properly early on 

D) Consulting / Coaching / Translation / Content / Agency

• Solo and manageable: sole proprietorship
• With a team, larger clients, or subcontractors: LLC
• If you want to distribute shares later, for example to a co-founder or investor: LLC or AG / Ltd.

E) Tourism / Service Agency (

• Because of responsibility, contracts, and liability issues: mostly LLC
• However, it can make sense to start as a sole proprietorship first to gain initial experience. 
• If you want to scale later, with partners in Switzerland or Thailand or with shareholdings, then an LLC or later an Ltd. may be the better choice 

“If you start with two people…”

Many couples or friends start together with a “50/50, we share everything” mindset. Without clear rules, you can quickly end up in a simple partnership, and that can mean:

• one person signs a contract → both are liable 
• dispute over profit distribution or exit → chaos 

Minimum protection: at least put the following in writing

• who does what, and who pays what 
• profit / loss allocation 
• access to the bank account / cash register 
• what happens if one person leaves or the relationship ends 

Decision in 60 seconds

In most cases, this is actually right:

• I am alone, the risk is small, and I want to start quickly → sole proprietorship
• I am renting a studio / have staff / want to separate liability → GmbH / LLC
• I am planning growth + investors / partners / exit → AG / Ltd.
• We are starting together “just like that” → don’t do it → use a contract or set up a GmbH / LLC or AG / Ltd.