Being self-employed means freedom — but also responsibility, especially when it comes to taxes. Starting a sole proprietorship in Switzerland is a major career milestone. It brings flexibility and independence — and new financial obligations.
What is a sole proprietorship?
A sole proprietorship (Einzelfirma) is the simplest and most flexible form of self-employment in Switzerland. As the owner, you are personally responsible for all business decisions and risks — without shareholders or partners. This independence provides great freedom, but it also requires careful planning in taxation, insurance and bookkeeping.
Steps to starting a sole proprietorship
- Develop your business idea that meets market demand and fits your expertise.
- Conduct market research: understand your audience, competition and market potential.
- Create a business plan to structure your vision, goals and financial framework.
- Plan your budget: estimate costs and investments carefully.
- Register with the AHV: sign up early — AHV, IV, EO and ALV contributions are mandatory.
- Take out insurance: professional liability insurance protects you from business risks.
Tax deductions for the self-employed
One of the biggest advantages of self-employment is that you can deduct business expenses from taxable income.
Deductible business expenses
- Rent or leasing of business premises
- Utility costs (electricity, water, heating)
- Office supplies and equipment (computers, printers, software)
- Travel expenses (airfare, hotel costs, mileage)
- Communication costs (phone, internet)
- Advertising and marketing
- Liability insurance
- Vehicle costs (leasing, maintenance, fuel)
- Employee wages and social security contributions
- Continuing education expenses
- Depreciation on assets (machines, vehicles)
- Legal and advisory fees
- Bank fees and interest on business loans
- Membership fees for professional associations
- Software and cloud services
Tip: for business meals, always note attendee names on the receipt — tax authorities require it.
Key deductions for sole proprietors
Social security contributions
Payments to AHV, IV, EO and ALV are fully deductible. Register early and adjust contributions to reflect actual income.
Depreciation
Investments in machinery, vehicles or equipment can be depreciated over several years, reducing taxable income over time.
Value Added Tax (VAT)
If your annual turnover exceeds CHF 100,000 you are subject to VAT. You remit collected VAT but can deduct input VAT paid on business expenses.
Retirement savings
Contributions to the pension fund (2nd pillar) and Pillar 3a are fully deductible — a smart way to optimise taxes in high-income years.
Involving your spouse
If your spouse works in the business, you may deduct salary or travel costs, and in some cantons claim special allowances for joint work.
Keep your records clean and separate
Strictly separate personal and business expenses. A dedicated business account is essential for transparency. Digital tools simplify bookkeeping and let you access documents anytime.
Selling or closing a sole proprietorship
When selling or closing your business, a liquidation tax applies. Capital gains on business assets are taxable, while gains on private assets are usually tax-free. Keep an eye on private deposits and withdrawals — they can impact your tax position.
Structure creates financial freedom
As a self-employed professional, you carry responsibility — but also many opportunities. With careful planning, clean bookkeeping, and smart use of deductions, you can significantly reduce your tax burden. Request a personalised assessment or get an instant quote below.