Questions about creating a Business

1

Hello everyone,

I am currently developing my entrepreneurship and would appreciate any help you can provide me with regarding my business venture.

Specifically, I am employed full-time at the University of Lausanne under a B-permit and I am interested in starting a plant production and sales business. I want to start very slowly as I am also developing other scientific projects in parallel…

If I am not wrong, I understand that the first step is to complete all the necessary paperwork required to establish the business. This includes registering the business as a secondary freelance activity with the AVS and obtaining an IDE number. Only then I can start legally my activity.

However, since I plan to start slowly, with expected revenues of less than 10,000 CHF this year, I am unsure about the associated costs of declaring myself as a freelance. Are there any other costs I should consider aside from taxes? Additionally, as I am already contributing to AVS as an employee, will I need to pay an additional contribution as a freelance, and if so, would the minimum of 150 CHF per semester apply?

Thank you in advance!

2

Hello

Do you have an Unfallversicherung? If not that’s the first step you will have to take.
I would start and look how things evolve, worst case you will have to get in touch with the authorities once you cross the 10k threshold. This allows you to grow slower and you dont have any “pressure”.

Disclaimer
The following response is generated by Chat GPT:

Hello!

It’s great to hear that you’re looking into starting a plant production and sales business in Switzerland. While I can provide some general guidance, it’s important to consult with a local expert, such as a lawyer or accountant, for the most accurate and up-to-date information.

As you mentioned, the first step to establish your business would be to register it as a secondary freelance activity with the AVS (Alters- und Hinterlassenenversicherung, or Old Age and Survivors’ Insurance) and obtain an IDE (Identification des Entreprises) number. This will enable you to legally start your business.

Regarding the costs of declaring yourself as a freelance, there may be some additional expenses to consider, such as:

1. Taxes: As a freelancer, you’ll need to report your income and expenses on your personal tax return, which will determine your tax liability. Keep in mind that the tax rates can differ depending on the canton where you’re located.
2. Social security contributions: As a freelance, you’ll need to pay social security contributions. However, since you’re already contributing to the AVS as an employee, you might not need to pay the full amount. You should verify with the AVS office whether the minimum of 150 CHF per semester applies in your case.
3. Insurance: Depending on your business activities, you may need to consider obtaining additional insurance, such as liability insurance.
4. Professional fees: If you decide to work with an accountant, lawyer, or other professionals, you may incur fees for their services.
5. Business expenses: These include any costs associated with running your business, such as marketing, website development, inventory, and equipment.

Since you expect your revenues to be less than 10,000 CHF this year, you might not need to register for VAT (Value Added Tax), as the threshold for mandatory registration is usually 100,000 CHF in turnover for businesses providing goods or services within Switzerland.

It’s important to note that the information provided here is general and might not cover all specific details of your situation. I highly recommend consulting with a local expert to ensure that you comply with all the necessary regulations and requirements.

Best of luck with your entrepreneurship journey

3

hehe nice, thanks. I also used chat GPT for rewritting my message.

Do I need an specific insurance for my buisness even at the beginning? Is a sort of liability insurance right? If you have any tip on which company may be the better / cheaper for that I am interested…

Thanks for your reply.

4

It could be that liability is covered until a certain point in your private liability insurance (check with your insurer).

BTW, it is not needed to do the paperwork before you start. You can start now as a single ownership and do the paperwork afterwards (with low revenue you only need to register with the AHV, eventually you want to register with the Handelsregister, but it is not mandatory).

A Ltd. or an LC of course need more prepatory work.

Most important is to keep proper accounting from the beginning. I use bexio, super easy to use and it is growable. My accountant closes down the year directly in bexio in January/February (you could also do it yourself).

For comparision : we are now at about 25k revenue, as a side job (a KLG, which is basically single ownership with several people). We started two years ago.

5

The main step you need to take to begin with is to register your self-employment as a secondary income at the social security office. You have to declare an antitipated income from the self-employment, and your social security contributions will be based on that. If your actual income ands up being higher or lower, as per the tax office, then the social security office will bill or reimburse you accordingly. It’s all very simple.

Until you hit the CHF 100,000k revenue mark, you do not have to register a company. Once you generate CHF 100,000 revenue or more, then you will need to register a company in order to pay VAT.

You aren’t obligated to take out accident insurance or get a pension fund.

So it’s really just the registration for social security, and that is quick and easy.

6

Nice, thank you so much for your help! Based on my expected revenue of less than 100k, I understand that I only need to maintain a simplified accounting, which is ok and quite simple to do. Thanks for the tip of bexio, I will check that.

According to the AVS website and as Patirou said, I can start my activity before completing all the paperwork. However, I’m a bit confused on how this won’t be considered as undeclared work. Don’t I need to have an IDE to sell my products and issue invoices, especially to be accepted to sell in places like Lausanne’s Riponne market, which are organized by the Ville de Lausanne? Anyone can just sell whatever they want then?

Lastly and the most important, if I’m understanding correctly, if my revenue is zero or negative by the end of the year, I will be reimbursed for my AVS contributions for this secondary activity?

When you talk about social security we are talking about the AVS/AI only right?

The main thing it is that I don’t want unexpected expenses from this knowing that I won’t spent much time in developping this project this year and that it is very “seasonal”. It will be a nice project to develop during spring/summer.

Thanks!

David

7

No you do not. need an IDE. But in the end you will have to report your gains in your tax declaration.

Since you are working, this is correct. Basically you self declare some estimated income, you can correct it during the year (especially if you do much more than expected), and the following year the AVS give you a final invoice.
BTW a negative profit can declared on your tax declaration. and reduce your overall taxable income.

As long as it is not prohibited/dangerous goods, yes this is correct.