Change of domicile in Switzerland - MKY GROUP

Change of domicile in Switzerland: How to avoid classification as a letterbox company

If a customer wants to domiciled his company in Switzerland in another canton, he must ensure that the tax domicile does not qualify as a letterbox company. A letterbox company is generally regarded as a company that only has a formal seat in one location but does not actually engage in economic activities there. In order for the tax seat to be recognized, the following points must be observed:

1. Actual management

• The actual place of management must be at the new domicile. This includes key business decisions and operational management of the company.

• This means that board meetings or managing director meetings should take place regularly at the new headquarters.

2. Employees and infrastructure

• There should be at least one office with an appropriate infrastructure (e.g. computer, telephone, Internet).

• There should be local employees or at least one contact person at the location who is responsible for the company's business.

3. Business address

• A pure letterbox address without physical presence is generally not recognized. An actual business address that is used is essential.

4. Economic anchoring

• There should be a visible connection to the canton's local economy. This may include:

• Business relationships with local companies.

• Using local services.

• Participation in the canton's economic activities.

5. Commercial register entry

• The entry in the commercial register of the new canton must be made correctly. It should be checked whether additional requirements of the new canton must be met.

6. Tax audit

• The tax authorities could check whether the change of seat is in line with economic circumstances.

• It must be understandable that the transfer of headquarters does not simply represent tax optimization, but also has operational reasons.

7. Avoiding tax disputes

• It is important that the change of seat does not lead to conflicts with the previous canton or other states (e.g. in the case of double taxation agreements). A tax advisor can help with this.

8. Documentation and evidence

• The customer should document all relevant steps in order to be able to prove, during an audit by tax authorities, that this is an actual transfer of economic activities.

By meeting these criteria, it can be ensured that the company is recognized as a genuine operating company and is not considered a letterbox company. It is advisable to work with a tax advisor and legal expert to minimize legal and tax risks.

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Disclaimer: The content of this blog post is for informational purposes only and does not constitute professional advice.
Each individual case should be reviewed individually and we recommend that you seek professional advice for specific questions.