Freelancing in Switzerland: sole-proprietorship setup, AHV self-employed status, and the CHF 100,000 VAT threshold

Going freelance in Switzerland means trading as a sole proprietorship — Einzelfirma in German, raison individuelle in French, ditta individuale in Italian. There is no company to incorporate: you and the business are the same legal person. The bureaucracy is light, but the order of steps matters.

Getting self-employed status confirmed

The decisive first step is not a tax office — it is an AHV/AVS compensation office (Ausgleichskasse / caisse de compensation). Swiss law obliges anyone working independently to register there, and the compensation office decides, case by case, whether you genuinely qualify as self-employed. You typically show proof of business activity (invoices, contracts, your own premises or equipment). Only once self-employed status is granted do the self-employed contribution rules apply.

Social-security contributions (AHV/AVS)

As a self-employed person you pay old-age, survivors' and disability insurance (AHV/IV/EO) yourself — there is no employer to split it with. The rate is degressive: the full contribution of around 10% applies to annual income from CHF 60,500, and lower rates apply on smaller incomes. Note that occupational pension (2nd pillar / BVG) and accident insurance are not mandatory for the self-employed the way they are for employees, so you arrange your own retirement and risk cover.

The CHF 100,000 VAT threshold

You must register for VAT with the Federal Tax Administration (ESTV/AFC) once your annual worldwide turnover from taxable supplies reaches CHF 100,000 — one of the highest thresholds in Europe. Below it you are exempt unless you waive the exemption and register voluntarily (useful to reclaim input VAT). Registration is done online with your business identification number (UID/IDE). The standard rate is 8.1%, with reduced rates of 2.6% and 3.8% for lodging.

Income tax and invoicing

Sole-proprietorship profit is taxed as your personal income — direct federal tax plus cantonal and communal taxes, so the effective rate depends heavily on where you live. If turnover is under CHF 500,000 you may keep simplified records of income, expenses and assets rather than full double-entry accounts. On invoicing, the QR-bill is the mandatory domestic payment format, and structured e-invoicing is required for federal-government contracts above CHF 5,000.

General information about freelancing in Switzerland, current as of the review date above, and not tax advice. Thresholds and rates change — confirm current figures with the Federal Tax Administration (estv.admin.ch) and your AHV compensation office, or a qualified accountant.