The Swiss market is regulated to protect its workers, but recent changes have placed some significant boundaries on how contractors can be employed in Switzerland.
Currently, Swiss clients can only use contractors who are employed by authorised Swiss management companies. They cannot employ contractors working for foreign leasing or recruitment companies, meaning that your candidates will likely need to work through a management company within Switzerland.
What constitutes an authorised management company in Switzerland?
Companies need both federal and cantonal authorisations. Obtaining the proper federal and cantonal license generally requires that:
- The company is registered on the Swiss Commercial Register as a labour-leasing company.
- The companies has offices based in Switzerland.
- The company can provide a financial surety of at least CHF 100,000 (roughly £67,200).
- The company has a competent person who devotes almost all of their work toward contractor management or labour-leasing.
Companies that employ contractors without the proper licenses face harsh penalties and fines.
What do these changes mean for recruiters?
While Swiss law allows for contractors sent by foreign companies, it doesn’t allow contractors sent by foreign recruitment companies. If your contractor isn’t employed by a management company within Switzerland, you risk causing serious legal or financial implications for your end client.
Foreign recruitment agencies can neither supply staff to (foreign OR domestic) companies in Switzerland, nor can they bill clients within Switzerland.
Contractors will have to find Swiss management companies to sponsor their permits, run payroll, and assume legal responsibility for them during their stay.
What about contractors using their own personal Ltd Companies?
EU or EFTA nationals can only use their own Ltd Companies to hire services to a Swiss company for up to three months; after this, they need a work permit and employment from a Swiss management company.
Additionally, the contractor will need appropriate licensure to work through his or her own Ltd Company, and the overhead costs can be hefty. Additionally, you don’t want to risk a contractor continuing to use a Ltd Company when they should legally be employed by a local management company.
Working through a Swiss management company
In general, the simplest, the safest route will be working through a Swiss management company. This ensures that the contractor is complying with all local laws and that your client is protected from hefty fines or legal issues.
Most management companies will organise a work permit for contractors, should they end up working more than 90 days in the country. In short, this route simplifies the process of placing a candidate in Switzerland and guarantees compliance with all local laws.
If you’d like more information on Swiss management companies, or are interested in being put in touch with one of our local Swiss partners, let us know. We can give you feedback on making the most out placing candidates in Switzerland.