Side hustle on top of 100% job

Hi everyone, I’m currently working 100% while giving the first steps into building a side-hustle.

After reading about the different options, I’m still not sure about what’s the best way to set things up: freelancing v sole proprietorship or other. Actually, or none, if revenues below ~2000CHF? It would be great to declare some expenses though, such as website hosting or outsourcing.

What are your thoughts on this?
Recommendations on information sources/accountants is also welcome.

Thanks a lot for your help!

There are some very important points:

  • You need to make sure you are allowed to do this with your current employer.
  • You need to declare the income to the AVS (and pay social contributions) if you earn more than 2300 CHF per year, and in that case, you will be forced to create an official structure. a sole proprietorship is very easy, LLC not so much.
  • You need to declare the revenue regardless of the amount. But you can indeed declare expenses there, within some limits probably based on your canton
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Isn’t it the same ?

Creating a sole propriorship takes about 2h, with a visit to a notary. For the amount of revenues (2k/month) this seems as as good structure, expect if you have big liabilities.

Registering for AHV also takes up about 1h, the most difficult part being to estimate how much you will make the first year accurately, but basically you simply correct it during and in the end of the year.

You don’t need to register a sole proprietorship in the commercial registry if your turnover is below 100’000 CHF, so you can start right away without any formality. Only AHV is needed if turnover >=2300 CHF. If the turnover is only around 2000 CHF I would avoid registering because as long as you’re registered in the commercial registry you cannot profit from unemployment insurance from your main employer if they fire you even if the registry entry is only from a side hustle.

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??? I‘ve never needed to see a notary to establish my soleproperiorship. Even the SHAB entry was a matter of sending an Email.

That’s incorrect. There is no need for a notary for a sole proprietorship. It takes a about 15 minutes to fill a form to form a sole proprietorship and this can be done at the same time as the registration through the AVS.

Cantonal difference?
Either had to go to the commerce registry (is that the right translation for Handelsregister?) or to go to the Notary to send it by post. Notary was much closer in my case. That would be Canton Zurich.

Is that including the Handelsregister registration ?

But main message, for setting up the sole propriorship, do not go via these predatory companies who will do that for you at a rate of 200 CHF or something. It is not worth it.

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Good call for the unemployment insurance.
However, not being registered can have negative effects in other areas (especially between businesses, to get good payment terms etc.)

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Yes, but most companies will treat a registered / unregistered sole proprietorship as the same (untrustworthy - because with a sole proprietorship you’re basically dealing with a private person and not with a company), for most companies even a limited liable company (GmbH) is not really trustworthy enough to get good / better terms because of the low capital requirements, so if this is a concern then you need to establish a limited company (AG/SA) anyway.

Hi everyone, many thanks for your help. The unemployment benefits issue might be a deal breaker, since I’m on a fixed-term contract. It’s hard to believe that, after 2300CHF/year, one would lose the right to unemployment benefits, given that such amount would barely cover the living costs of 1 month (not doubting anyone here, just sharing the frustration).

If that is the “registre du commerce” in French, it’s optional until you generate more than 100’000 CHF in revenue. For LLC, it’s directly registered when you create the entity, and you indeed need a notary for LLCs.

The 2300 CHF is only the AHV part, meaning that after 2300 CHF you need to register with the AHV.

The registration with the commercial registry is required after 100’000 CHF turnover, before that it is optional. With 100’000 CHF you also need to pay VAT and register with them, before that you’re exempted.

Basically, a sole proprietorship is the same as if you act as a private person no matter if you’re registered or not. You’re not a company, and you can act as a sole proprietorship right away without registration (until 100k CHF). Registration just makes your status a bit more official, but legally a sole proprietorship exists also without registration.

So if you want to start a side hustle, depending on what you plan to do, I would start without registration and see how it works. Of course, in any case, you need to declare taxes for all revenue in your private tax declaration.

It is understandable that it is like this because otherwise lots of people would start some businesses and then compensate poor profits or bad economic situations with ALV claims and as such would transfer entrepreneurial risk to the unemployment insurance and that’s not what it is intended for.

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I see - I first understood that registering with the AHV meant registration with the commercial registry and, therefore, losing unemployment benefits. Thanks for clarifying. Happy to learn one can move on without too much hustle and see how it goes.

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