US LLC from Switzerland: Decided Here, a US Company Is Swiss

0:00Can a Swiss resident own a US LLC?

Lukas sells software from Zurich. Some of his buyers are American, and they want a US company to sign with. So, can he have one? As far as America goes, yes. No social security number, and no trip to the US. Cheyenne, in Wyoming, is usually eight hours behind Zurich. We're BaseAcross. We set up US companies for founders outside America, so we'll be straight with you. The American side is simple.

The Swiss question is where the company's important decisions are taken. Let's open the case and look inside.

0:37Do you even need one?

First, does he need one at all? Here's what's different about Switzerland. The big card processor already takes Swiss businesses, so you may not need a US company to get paid. A Swiss GmbH gets you card payments too, and it's what Swiss banks and tax offices understand. So the reason here is usually US customers or investors. Some US buyers want a US company to contract with, and US investors usually want a Delaware C-Corp.

Lukas has the first reason.

1:11Can Switzerland tax it as Swiss?

Now the rule that matters. Can Switzerland treat a US company as Swiss? It can. A company formed abroad is Swiss-resident if its place of effective management is in Switzerland. That's where its important decisions are taken. A manager abroad doesn't change that, if they only follow a Swiss owner's instructions. So if Lukas makes the decisions in Zurich, a Wyoming LLC and a Delaware C-Corp can both be Swiss.

The guide puts it in one line. Decided from Switzerland, a US company is Swiss. How yours would be treated is for your Treuhänder, your Swiss tax adviser.

1:51Forming it: Wyoming or Delaware, and the EIN

Forming it is the quick part. A Wyoming LLC for a business you run yourself, once you know how your canton will treat it. A Delaware C-Corp if US investors want shares. Tell us where the important decisions will be taken, because Switzerland's test asks. The company needs a registered agent, an address in that state for legal papers, not where you work. Then the EIN. Without a social security number, it's a paper form to the IRS.

You'll pay in US dollars, so check your card's exchange rate and fees.

2:28The bank

The bank, and in Switzerland it's the easy part. One of the US fintech banks takes applications from founders here, and a multi-currency account can give the company US account details. If you want to sell as a US business, the US company can apply to the card processor's US side. It reviews you, and it can decline. Each provider decides for itself, so use the same name, address and description everywhere.

2:56What a Swiss-resident company pays (an illustration)

Here's the guide's own illustration. Say Lukas's Wyoming LLC makes a hundred and fifty thousand francs of profit, and he takes its important decisions in Zurich. So it's Swiss-resident. Swiss company tax comes in layers. A federal rate, then a cantonal and a communal one on top. Across the cantons, the tax comes to about seventeen thousand four hundred and ninety francs at one end, and thirty thousand eight hundred and ten at the other.

His stake in the company also counts for wealth tax. That's an illustration, not a quote. Each canton sets its own rate, and how it classifies the LLC is for his tax adviser.

3:38Your canton, your stake, the treaty

In Switzerland, you report to your canton. You file one return with your cantonal tax office, which assesses federal, cantonal and communal tax together. Not the federal tax administration, as some guides say. Every canton taxes your net wealth, worldwide, at market value, and shares count. So your stake in the US company goes on it. There's a tax treaty with the United States, in force.

It exempts interest and royalties from US withholding, and caps the rate on dividends. Work you do in Switzerland generally isn't US income, so for a services business the treaty matters less. The company still files a report with the IRS every year, even without sales, and missing it is expensive. It's usually due in the spring, and there's a form to ask for more time, filed before the deadline.

4:33The order

So here's the order. Take the Swiss questions to your tax adviser first: how your canton will classify the company, and where its decisions will be taken. Then form, then bank. Keep minutes of where decisions are taken. Put the IRS report and your Swiss return on one calendar. The full guide, with every source and a checklist for your adviser in English and German, is linked below.

And Lukas? He sat down with his tax adviser before he ordered anything.