Investing in a start-up abroad?

Hi all,

A friend of mine is in the process of creating a start-up in France (as a SAS, Société par actions simplifiée). I’d like to invest in it as I think the idea is good. Now, before doing that, and because I’m a Swiss resident for tax purpose, I’m trying to do my homework. I feel like at some point I’ll contact a tax attorney just to be sure, but I thought I could ask some questions here already to get some insights :slight_smile:
#1 - As an average joe (ie not qualified investor), am I allowed to do that (invest in a foreign company) ?
#2 - Concerning taxes, I suppose the “only” thing I’ll have to do is to declare my shares in my wealth, is this correct ? How is the value of these shares computed ? Is this something that would require an accountant ?

Thanks a lot !

You sure you got the country right? Start-up in France? Did you mean a subsidized government project?

On a more serious note: I’m very far from being an expert, but why wouldn’t you be able to invest there? There’s practically free movement of capital and trade between CH and EU i think. And why not just ask the cantonal tax authorities regarding taxation?

I’m pretty sure you can do that.


When you own a part of a company, the tax authorities have a formula for how to compute the value of the company for tax purposes. I’ve looked into it a while back and the formula was a weighted sum of capital you invested and discounted cash flow. (It wasn’t rocket science, you can likely just compute the result yourself.)

In case you would receive dividends from the company, these would be declared as income.

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Seriously ?

To get back to the topic,
yes you can invest into the company.
The company will have an accountant which will set the value of the shares every year (mainly own capital of the company divided by the number of shares). Furthermore dividends will be taxed as well.
La valeur nominale d’une action pour une SAS : définition, calcul et usage).

EDIT : Not applicable as per post below.

Just be aware that you will be probably taxable in France on dividends, there is no wealth tax in France on mobile capital.

This will not be accepted by the Swiss tax authorities. There is the “Wegleitung zur Bewertung von Wertpapieren ohne Kurswert”:

The details are somewhat complex (there are special rules for start-ups in certain cantons, different models for some companies, etc…), but in principle, the formula is.

Net asset value = Average profit (of last 2 years, 3 years or some weighted average) / 9.5%

Value of the company = (2 * NAV + book value) / 3

For start-ups the difference might not matter too much, but for profitable companies, this can be painful. For instance, with a profit of 1M, they use a NAV of ~10M. Even if the book value is zero, the company value will still be ~7M.

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Thanks for the correction. Edited my post accordingly

However, according to the document you sent, they indicate a capitalisation rate of 7% for the NAV, + the swap rate of the Forex (what the hell is that ?) Does this make the difference of 2.5% ?

Edit : after more thinking : I guess the 2.5% it is the riskless investement rate corrected by the foreign currency riskless investment rate. The take numbers of 2008, so today it would be more about 0-1%
I guess ?

Can be painful, but I have to admit it is a fair way to value a company.

BTW did you notice how the 7% for company shares come up as a benchmark ? (like for diversified ETFs).

9.5% was the rate that canton SZ used for 2021, but I am not exactly sure how they arrived at this number (they just refer to “RZ 10”). They seem to have changed the calculation method as of 01.01.2021 and are no longer using a fixed 7%:

Die Risikoprämie berechnet sich aus der jährlich ermittelten Risikoprämie von kotierten Unternehmen
unter Berücksichtigung des relativen Risikos der nicht kotierten Unternehmen, abgeleitet aus der Analyse der vergangenen Jahre

This does not really say how it is calculated in detail, they seem to add another risk premium on top of the risk premium for listed companies based on an analysis that is not documented.


Zwecks Berücksichtigung der Illiquidität, wird die Summe der beiden ungerundeten Prozentsätze „risikoloser Zinssatz“ und „Risikoprämie“ um 17.65% erhöht.

So I assume the risk premium for unlisted companies was determined to be ~8% and they added 17.65% on top of that (because the risk free rate was more or less exactly 0.0% at the end of 2021).

This study analyzes that:

The reasoning seems to a 4% market risk premium (so they use 4% as the risk premium for a diversified portfolio, seems to be somewhat low) and 3% on top of that for business hazard / illiquidity. However, in the study they criticize this approach (for instance because of the 4% fixed premium) and that was also the reason they changed it last year.