A Swiss Branch Office is where a foreign company establishes one or more branch office locations to conduct its business in the jurisdiction of Switzerland. Swiss Branch Offices have certain organizational and financial independence from their principle office and may, under Swiss law, enter into contracts, execute agreements, settle transactions, and sue or be sued in its own name. However, if the parent company falls into insolvency and is liquidated, the effects extend to the Branch Office. There are a variety of benefits to establishing a Swiss Branch Office including low tax burdens, avoidance of share capital requirements (a savings of CHF 20,000 to 100,000 in capitalization), exemption from the 35% withholdings tax on payments to the parent company, lump-sum deductions in Switzerland for taxes levied in the source state, and exemption of Swiss profits in the hands of the parent company (subject to the terms of relevant Double Taxation Treaties). Swiss Branch Offices must have at least one person, or two persons with joint signatory authority, residing in Switzerland and recorded in the Commercial Registry authorized to act on behalf of the Swiss Branch Office.
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