Domicile Address vs. Permanent Establishment – Key Differences

The terms domicile address and permanent establishment are often used interchangeably, but legally they are very different. Understanding this distinction is critical to avoiding tax or compliance errors.

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Domicile Address

This is the legal seat of the company, as listed in the Swiss Commercial Register. It must be located in Switzerland and capable of receiving mail.

Key Features:

• Legally recognized headquarters
• Required for commercial registration
• Can be hosted by a fiduciary like Findea.ch

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Permanent Establishment

This refers to a place where the business carries out real operational activities. It’s particularly important for VAT and social security matters.

Examples:

• Office with employees
• Workshop or warehouse
• Consultancy office

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When Is a Domicile Sufficient?

• No staff in Switzerland
• No operations on-site
• Legal presence only

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When Is a Permanent Establishment Required?

• Local business activity in Switzerland
• Physical office or location
• Local employees

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Common Pitfalls

Foreign companies often underestimate the tax implications of having a de facto permanent establishment. Findea.ch can assess your case and guide you in the right direction.

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Conclusion

Understanding the difference between a domicile address and a permanent establishment is key to operating legally in Switzerland. Get expert advice to ensure your setup fits your needs.

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