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Business Management
Lucia Robayo
Zürich, August 29, 2024
With its stable economy and high quality of life, Switzerland offers an attractive market for real estate companies and presents numerous opportunities, but also requires extensive preparation and knowledge of the real estate industry.
In this article, we take a look at the necessary requirements for founding a company, the most suitable forms of business and the future and challenges of the Swiss real estate market.
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As the owner of a real estate company, also known as a real estate agency or real estate office, you can offer various services related to real estate. The main tasks include:
Overall, real estate companies offer a wide range of services to help customers buy, sell, rent and manage properties. Before you set up your real estate company, you should set out in your business plan what direction you want your company to take in the future and research the competition in this area.
Calculate the costs of your company incorporation here.
To set up a real estate company, you must meet various legal and administrative requirements. A specific license is only required for real estate agents. Unlike the HR sector, professional experience is not a prerequisite for setting up a company, but it is a great advantage.
One of the basic legal steps is the formation of a company. Registration in the commercial register is mandatory for many types of company in Switzerland, especially corporations such as GmbHs and AGs. This entry gives the company a legal identity and ensures that it can do business in Switzerland. However, there are exceptions, such as sole proprietorships with an annual turnover of less than CHF 100,000, for which registration is not mandatory.
In the rest of the article, we will discuss which company forms are suitable for a real estate company.
To run a successful company, you also need to familiarize yourself with the administrative tasks of a managing director. This includes proper accounting, compliance with tax obligations and the management of contracts and documents.
Did you know that you can outsource your accounting to Nexova?
If you want to broker real estate within your real estate company, you act as a broker and require a broker’s license. Please note that the license is only valid for the canton in which the activity is to be carried out. If you want to work as an estate agent with your real estate company in several cantons, you should find out about the respective requirements and regulations so that you can also operate legally in other cantons.
No specific licenses or permits are required to set up a real estate company. However, appropriate qualifications and knowledge in the fields of real estate, construction, finance and law are crucial for the success of your company. These can be acquired through studies or training and practical experience.
A strong network in the industry and knowledge of local market conditions are also an advantage for your business success.
Financial stability is another cornerstone for the success of a real estate company. A capital contribution is also a basic requirement for founding a GmbH or AG. A public limited company (AG) requires a minimum capital of CHF 100,000, while a limited liability company (GmbH) can manage with CHF 20,000.
You also need start-up capital for office equipment, employees and marketing activities. How much this capital needs to be depends on your company’s business model.
Banks and investors also often require proof of creditworthiness and collateral in order to minimize the financial risk.
If you want to build in Switzerland, you must obtain the relevant permits for construction projects from the responsible municipal or cantonal building authority. This includes the submission of building plans and compliance with local building regulations and standards.
It is also important that they comply with the legal regulations on occupational health and safety. This includes providing safe working conditions and complying with SUVA regulations.
The choice of company form is the starting point of your start-up and determines the direction your entrepreneurial activities take. Will you open an independent real estate agency and choose sole proprietorship or will you build a real estate empire and go public?
In Switzerland, there are several options available to you, which offer advantages and disadvantages depending on the scope and objectives of the company.
As a foreigner, you are generally allowed to set up a company in Switzerland if you meet certain requirements and comply with the legal provisions. Here are the most important points:
Residence permit: You need a valid residence permit in Switzerland that allows you to work in Switzerland either as a self-employed or employed person. The exact type of permit depends on your nationality, your professional qualifications and the planned activities.
Managing director or local representative: Depending on the legal form of your company, it may be necessary for you to have a managing director resident in Switzerland or an authorized representative to represent your company locally.
Compliance with Lex Koller: Lex Koller regulates the acquisition of real estate by foreigners in Switzerland. If your real estate company is directly involved in the acquisition of real estate (e.g. purchase and sale of real estate), you must comply with the provisions of Lex Koller, as foreigners generally require specific permits.
Read more about how to set up a company in Switzerland as a foreigner here.
Larger real estate companies generally prefer the public limited company (AG). This requires a minimum capital of CHF 100,000, of which at least CHF 50,000 must be paid up.
An AG offers the advantage of limited liability, which means that shareholders are only liable with the capital they have contributed. This structure is popular with investors due to its transparency and good financing options.
In addition, a public limited company can issue shares and therefore raise capital more easily, making it ideal for larger and riskier construction or purchase projects.
The GmbH is a flexible and widely used form of company that requires a minimum capital of CHF 20,000. It also offers limited liability and is well suited for small to medium-sized real estate projects.
The formation of a GmbH is less complex and costly than that of an AG. Another advantage of the GmbH is the simpler administrative structure, which makes it attractive for smaller companies.
A sole proprietorship can be an option for very small real estate transactions or as an entry into the real estate market. This type of company does not require any minimum capital, but the owner is liable with all of his or her private assets.
It is more suitable for estate agents or small renovation projects where the financial risk is manageable. Setting up and running a sole proprietorship is uncomplicated and inexpensive.
These company forms are suitable for partnership-based real estate projects. In a general partnership, all partners have unlimited liability, while in a limited partnership at least one partner has limited liability.
These forms offer flexibility in management and are suitable for projects in which several partners work together. The choice of company form depends on the specific needs and objectives of the company. We will advise you free of charge on which company form suits your project.
Setting up a real estate company in Switzerland is worthwhile due to the stable economic situation. In addition, the demand for residential and commercial real estate is rising continuously, driven by steady immigration and economic prosperity.
Cities such as Zurich, Geneva and Basel are recording constantly rising real estate prices, while rural areas are also becoming increasingly important.
Switzerland’s political and economic stability contributes to the attractiveness of the market and offers investors and companies a reliable basis for their activities in the real estate sector.
The real estate market in Switzerland offers numerous growth opportunities. In the residential real estate sector, there is high demand for condominiums and single-family homes.
Urban centers are experiencing a sustained influx, which is increasing demand for residential space. The market for commercial real estate is also showing positive trends, particularly in economically strong regions.
Another growth area is sustainable and energy-efficient construction. Switzerland attaches great importance to environmental standards and sustainability, which favors innovative construction projects. This offers entrepreneurs the opportunity to gain market share by constructing environmentally friendly buildings and at the same time make a positive contribution to the environment.
Despite the many opportunities, there are also challenges. The Swiss real estate market is highly regulated, and complying with the numerous building regulations and strict environmental requirements can be complex and time-consuming.
Competition is also intense, especially in metropolitan areas. As a start-up, you have to hold your own against established competitors and develop innovative approaches in order to stand out.
Market risks such as interest rate fluctuations and economic uncertainties can also have an impact on the success of your real estate company. A thorough market analysis and risk assessment are therefore essential in order to exploit undiscovered potential in the real estate market.
The Swiss real estate market is the subject of controversial debate. On the one hand, forecasts indicate that demand for real estate will continue to rise, driven by the stable economic environment and high quality of life. On the other hand, the UBS Swiss Real Estate Bubble Index warns of the risk of a real estate bubble on the Swiss real estate market.
However, it is undeniable that digitalization, smart homes and sustainable construction are omnipresent trends that will shape the market in the coming years. If you, as a real estate entrepreneur, focus on these developments, this will give you a competitive advantage.
Founding a real estate company in Switzerland offers numerous opportunities, but requires careful planning and preparation. Meeting the legal and financial requirements, choosing the right type of company, professional suitability and a deep understanding of the real estate market are crucial to your success.
Thanks to its stability and innovative spirit, the Swiss real estate market offers excellent growth opportunities. However, you should bear in mind that there is already a high level of competition. However, with new ideas, a focus on sustainability and a thorough analysis of the market, you can still be successful with a real estate company in Switzerland today.
Do you want to take your plans to set up a company into your own hands now? Then expert advice is essential. On request, we can even take care of the entire incorporation process for you, including entry in the commercial register – quickly and easily.