I’m looking for advice on the most efficient way to pay myself from an Irish company while living in Switzerland.
Earlier this year I took over managing my father’s business in Ireland, as he no longer has the capacity to do so. I’ve been running it on top of my full-time job here, but plan to reduce my Swiss role to 80% next year to free up a day per week for it.
I’d start by paying myself around CHF 100k per year. In 1–2 years I may leave the corporate role entirely and fully replace my income via the Irish business. I will own about 25% of the equity and hope to grow the company and eventually sell it in 5–6 years.
Because I am effectively running the Irish business, I have full flexibility regarding how compensation is structured (salary, consulting fees, management services, etc.), so I’m trying to choose the setup that makes the most sense for long-term planning.
Right now the most logical structure seems to be setting up a Swiss GmbH offering “management services” and having the Irish business pay invoices to it. While I’m still employed 80%, I’d keep all earnings inside the GmbH and invest them through a business IB account.
If/when I leave my corporate job, I’d continue with the GmbH: increase invoicing to replace my Swiss income, draw a modest salary + dividends to optimize taxes, and let retained earnings accumulate. When the Irish company is sold, the invested funds in the GmbH could keep paying me a small salary + dividends, while maintaining AVS contributions and offering a FIRE-friendly income structure. It also gives flexibility to make additional 2nd pillar contributions if useful, especially as I’ll likely have a lump sum from the sale of the Irish business.
My questions:
Is a GmbH preferable to operating as a sole proprietorship in this scenario?
Any issues with a Swiss GmbH invoicing an Irish company for management/consulting services?
Any other “gotchas” I might want to consider?
For those who’ve done something similar — anything you’d do differently?
Not really, the other 75% will have a say probably (if they exercise it, is a different question).
Definitely GmbH, if one of the other equity owners is coming after you. I would even take the money out and not leave it there, limiting your exposure through lawsuits.
Not an issue there, I would rather see an issue on the Irish side (in the end, the owner of the company (you) is billing his own company via a Swiss company which sells something non measurable → just saying it sounds fishy). I would check that out with a legal service. Since your salary is pretty good for side hustle (100’000 CHF/a), it should be readily available I guess ?
Out of curiosity, what kind of business are we talking about ?
Myself and my father will own jointly 26% each, making the majority share. We are giving the remaining equity to the management team that have been there since 30 years but also as Class B non-voting shares so they can’t ‘intervene’ or force anything in the business..
It’s a completely different line of work, I am essentially in corporate / tech. The family business is in sign manufacturing, road traffic & construction supplies.
There are some special laws in Switzerland for dividends on majority owned companies. I did profit myself when getting rid of my company just the year they came into place. But sorry, you will need a tax lawyer for details, will be cheaper.
A gain from an Irish company will be treated as income and raise your taxable income unless you can proof a majority ownership. Double tax treaty will have an effect too, usually you just pay both taxes first and after some time the Swiss will give you back the lower one.
But anyhow, this is not a question to be asked in a forum, but to a tax lawyer.
Use the GmbH to set up a “1e” executive pension plan. You can pump massive amounts of pre-tax money from the GmbH into your 2nd Pillar.
If you make all strategic, high-level decisions for the Irish company from your home in Switzerland, the Swiss tax authorities (ESTV) could argue that the Irish company is effectively managed in Switzerland.
If you invest via the GmbH, you pay Corporate Tax on the gains, and then Income/Dividend Tax when you eventually pay it out to yourself. You lose the primary tax advantage of being a Swiss resident (tax-free capital gains). Same goes for the company shares. If you hold them privately it will most likely be a tax-free capital gain but if transferred to the GmbH you will pay taxes when selling your ownership shares.
How does your dad plan to do succession planning around this company? Can you expect to receive his shares within a few years, or are there siblings to consider?
Does the company pay dividends?
Have you considered holding the shares through a holding company? This may or may not be the same firm you’d invoice from (consult a tax lawyer knowledgeable in international structures)
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