More than 40,000 companies are founded in Switzerland each year. But because many interfaces with the authorities remain paper-based, setting up a company is excessively difficult and expensive. The administrative costs incurred may be manageable for experienced entrepreneurs, but are quite significant economically. Moreover, the country scores poorly in various international rankings on the subject, and companies have been complaining about cumbersome administrative procedures for years.
Obsolete structures keep each other alive
That explains why calls for comprehensive digitization are getting ever louder. Merely implementing the existing processes electronically would fall short of the mark. Instead, digitization should be used to fundamentally revise existing structures. Regulations on formation capital and public certification when creating new companies in particular need to be updated.
The strict incorporation requirements are intended to strengthen confidence in business operations and creditor protection. However, one look at entrepreneurial practice shows that this goal is not achieved. At the same time, cumbersome regulations are hindering the digitization of public authorities – excessive requirements and analog processes are keeping each other alive.
Overcoming the blockade with a new legal form
To break this vicious circle, Avenir Suisse proposes the introduction of a new legal form: a digital micro-limited company. Largely based on the traditional limited liability company, the digital micro version should have the following three features:
- Waiver of regulations on formation capital
- Waiver of notarized authentication
- Abandonment of paper: identity checks, commercial register applications and all interaction with the authorities should be possible solely by electronic means.
Rethinking the company register system
Various countries have successfully introduced “entry-level corporations” years ago. Switzerland, as the “late bloomer”, does not yet have such a legal form. Since digital application possibilities in the administration are missing, now is the time to kill two birds with one stone:
- A digital micro limited company would make it easier, faster and cheaper to found a business.
- Reform will push the digitization of links between public authorities and the private sector. Modernizing the company register system will be accelerated, which could in turn boost transparency in business transactions and thus creditor protection.
Introducing a digital micro company would benefit Swiss entrepreneurship far beyond the immediate reduction of bureaucratic costs.