Guten Tag! If you are a Swiss business owner operating in the USA, you may already be familiar with the strict compliance and legal requirements that come with running a business in Switzerland. However, navigating the reporting requirements for beneficial ownership in a foreign country like the USA can be a complex and daunting task. From FATCA to FINMA, understanding and adhering to these regulations is crucial to ensure the success and longevity of your business operations across borders. In this blog, we will explore the key compliance and reporting requirements that Swiss businesses operating in the USA need to be aware of, and provide valuable insights to help you stay on top of your legal obligations.

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Switzerland must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Swiss Company in the US

Even if none of the specific criteria apply, a Swiss company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Switzerland. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Swiss companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Swiss businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Switzerland need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Swiss Businesses:

Tax Treaties

The tax treaty between the United States and Switzerland offers significant advantages for Swiss businesses operating in the USA. This agreement helps prevent double taxation and provides clarity on tax obligations for cross-border transactions. Swiss companies can benefit from reduced withholding tax rates on certain types of income, such as dividends, interest, and royalties. For more detailed information about the specific provisions and benefits of this tax treaty, click here to access the official IRS documents.

Trade Considerations

When conducting business with the USA, Swiss companies should be aware of the U.S.-Switzerland Trade and Investment Cooperation Forum Agreement, which provides a platform for bilateral discussions on trade and investment issues. While there is no comprehensive free trade agreement between the two countries, Switzerland benefits from Most Favored Nation status. Swiss businesses should familiarize themselves with U.S. customs regulations, tariff schedules, and any industry-specific requirements that may apply to their products or services. It’s crucial to research potential non-tariff barriers, such as safety standards, labeling requirements, or certification processes that may affect their particular industry. Additionally, Swiss companies should stay informed about any ongoing trade negotiations or potential changes in trade policies that could impact their business operations in the U.S. market.

Your Path to Compliance: Key Takeaways for Swiss Businesses in the U.S.

Operating a Swiss business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.