I am moving back to Switzerland (holding a C Permit) and setting up my business in Canton Ticino.
Based on my situation, a sole proprietorship seems like a bad move: I’ll start with 2 main clients (maybe more later, but SVA/AHV might flag the “scheinselbständig” / pseudo-independent status with just 2 clients), I want to avoid unlimited personal liability, and the progressive income tax would hit hard. So, a GmbH (Sagl) is definitely the way to go.
Expected revenue for Year 1 is around CHF 250k – 300k, with expected growth from Year 2.
My initial plan is to optimize for tax efficiency, wealth building, and maximizing deductions. I’d love to get the community’s feedback on finding the absolute sweet spot between salary, dividends, and corporate reserves.
Here is my target setup:
Salary: Pay myself around CHF 140k gross.
Corporate Address: Register the company at my home address to write off a portion of the rent, internet, and utilities.
Business Expenses: Deduct extensive professional training, high-end equipment, and typical business meals/travel.
Company Car: Take a nice executive car on a corporate leasing plan.
2nd Pillar Optimization: I want to maximize my pension contributions. Since I spent several years in university, I plan to leverage buy-ins to clear my historical contribution gaps and aggressively lower my personal taxable income.
Dividends / Retained Earnings: Distribute some dividends (dividend taxation in Ticino is good?) and retain the rest in the company for future business projects and potentially investing via a corporate broker.
Banking: I need to open a corporate account for the capital deposit and daily operations. I know IFJ offers a promotion with PostFinance, but I am leaning towards UBS for long-term stability and a stronger network.
My questions for the Mustachian community:
The Salary vs. Dividend Sweet Spot: Is CHF 140k a solid baseline for a 250k-300k revenue stream? If I pay myself too little, Ticino’s tax authority might complain about a non-commercial salary (AVS evasion), but if I pay too much, I hit high tax brackets. What is the optimal ratio here considering Ticino’s specific corporate vs. personal tax rates?
2nd Pillar Buy-ins via GmbH: Has anyone successfully executed massive buy-ins for university years through their own GmbH? Are there specific pitfalls with the pension fund setup I should look out for?
DIY Accounting & Bexio: My initial accounting variables will be very low (just 2 main clients invoicing monthly, a few expense receipts, and one employee—me). Is Bexio advanced/easy enough to do this entirely on my own for Year 1?
Fiduciary Costs: I’ve been quoted up to CHF 7,000/year by some local accountants for full management, which feels highly for a single person setup. What is a realistic rate in Ticino if I do the day-to-day entries in Bexio and just hire a fiduciary for the year-end closing and VAT (IVA) filing?
Incorporation: I’m planning to use services like Startups ch or IFJ to incorporate. Any major pros/cons or alternatives I should consider?
Corporate Banking & Investment Loans: Incorporating via IFJ, it could takes advantage of their free incorporation deal with PostFinance. However, I’m personally leaning towards UBS. Do you know if UBS currently offers any competitive startup packages or promotions that waive fees for the first year? More importantly, since I plan to ask for corporate loans down the line for expensive professional equipment and investment projects, which bank is generally more flexible and entrepreneurial-friendly for a young GmbH? Is the PostFinance deal a trap in terms of long-term flexibility for credit?
Looking forward to your numbers-driven insights! Thanks a lot.
Some input based on the experience with my own Own GmbH:
Accounting & Fiduciary Services: I am using GNUCash which is free and offers all the functionality you need. There is a little bit of a learning curve but ChatGPT will support you with setting-up the account structures & the bookings. All recurring bookings can be scheduled. Works very well for me. I also do all the tax reporting, VAT, and so on, on my own. Again. ChatGPT is here of excellent help and I had in the last years not one topic the tax authorities did not accept or had questions.
Banking: I did initially also use Post Finance. But did switch to another bank in the meantime. They are simply too expensive from my point of view and there are cheaper alternatives. I did however not need any loans.
Salary vs. Dividend: As a rule of thumb you need 1.6 to 2.0 time the salary you pay as revenue. In my case the ratio is more favourable as I need zero external services/have a very low cost base.
2nd Pillar: This one of the biggest lever you have if setting-up your own company. I clearly would invest some time in thinking through how much contributions you want to make and find an appropriate pension fund you can join. You need to create clarity here first.
Company Benefits: I have introduced a company policy defining all the benefits I get from the company. This is based on “Kreisschreiben Nr. 37 der ESTV”. I did just ask ChatGPT to write a policy that maximises benefits within this frame. I shared the policy with the tax authorities who accept it.
Thank you so much for the detailed feedback! Your point about Kreisschreiben Nr. 37 is a game changer, I will definitely work on a formal policy and seek a tax ruling to keep everything airtight.
Regarding your advice, I have a follow-up question…You mentioned that the 2nd Pillar is the biggest lever. Since my goal is to maximize the “investment” of the pension assets (to avoid the standard low-yield strategies of big insurance-based funds), do you have any specific recommendations for pension foundations that are more flexible? I’m looking for one that allows for a higher equity allocation. Are you using a specific “Mustachian-friendly” provider, or did you go down the route of an independent foundation?
Thanks again for the GnuCash tip, I’ll take a look, though I might stick to Bexio for the first year to keep the VAT filing as painless as possible while I adjust to the new setup.
You have different levers you can pull and they depend on your age and the amount you already have in your pension fund:
Level of Contribution: How high are the contributions (within the legally allowed range), and what amount of your salary is insured (with or without “Koordinationsabzug”)
1e Solution: Using 1e provides you by far the biggest level of flexibility regarding the investment strategy you take. For the standard 2 pillar part you have quite some limitations.
Supplementary pension plan: If you already have a high amount on the current pension and pay yourself a low salary your supplementary pension plan might become too big and some pension funds will not take it. This means you need to park it on an FZ what gives you more flexibility regarding the investment profile.
As said. This highly depends on your personal situation and it might be a good idea to speak with providers such as PensExpert to assess the options you have.
Some time ago I was looking for 2nd pillar providers that would let me have a high stock allocation. The most promising one for one-employee companies was Gemini, but there might be better products half a decade later.
If you find your choice, let us know. I might have to start using this knowledge this year.
I have no experience in business whatsoever, but - so far I assumed that for a mustachian self-employed person the best way to invest with tax advantages is to forego 2nd pillar and fill 3a up to the generous maximum allowed.
The 1e solution is exactly the kind of technical guidance I was looking for.
Thanks also to Helix for the pointer on Gemini, I’ll definitely investigate how their current offering compares to the 1e specialized providers.
Dr.PI, for the 3a pillar I agree that it should be part of the foundation, though I plan to use the 2nd pillar as the primary “fiscal shock absorber” given my revenue projections.
Other question… I have an upcoming recurring need to acquire shares/equity in another company annually. My initial thought was that I could use my company’s “retained earnings” (the profit remaining after salary/expenses) to buy these shares directly, thereby reducing my taxable corporate profit.
However, I suspect this isn’t that simple. I assume buying shares is just an asset swap (cash to investment) and doesn’t reduce my taxable profit, as it’s a capital investment, not a deductible expense. Am I right?
If so, is there a more tax-efficient way to handle these acquisitions? I’m looking for a way to fund these yearly share purchases without being double-taxed (taxed on corporate profit first, then again on the dividends/gains later). Any strategies on how to structure this, or is this just something I have to pay out of post-tax corporate profit?
“AVS evasion” you can probably pay yourself lower than 140k. As a one-man-show you should be fine with 90k. But to confirm with your Treuhand. The sweet-spot is always to move as much profits to dividends because you don’t pay AHV. Keep in mind that the witholding tax (35% of dividend) will be withheld until you fill the tax return for that year. Also keep in mind that low salary will reduce your mortgage capacity, banks discount dividend heavily for affordability calculation.
Company car you need an excuse for the car. Either visiting clients or commute.
I pay 10k/year for the fiduciary but that’s in the most expensive canton and I didn’t shop around.
“Massive pillar 2 buy-in” it’s more tax efficient to spread those out to lower taxable salary of high tax brackets first.
1e plan is only for part of your salary above 136k, so not great. You don’t have much control on the allocation in the second pillar. Best you can do is select a pension provider with a more aggressive equities allocation like Profond.
Buying shares of another company won’t lower company profits on purchase. However you can potentially claim a loss in followup years if you can justify that the shares lost value. Dividend distribution from a child to parent company is tax free if done correctly.
The point is that this works for the regular 2nd pillar. Their GEMINI Pool 50 allocation has only about 17% in cash and bonds. The part of the payments going to 1e could be the same or another provider.
Mit dem Lesen und der Teilnahme an diesem Forum bestätigst du, dass du die Forum-Richtlinien gelesen hast und damit einverstanden bist sowie den Haftungsausschluss auf http://www.mustachianpost.com/de/ akzeptierst.