When do you graduate from an EOR to your own Switzerland entity?

The calculation below uses CHF 530 as the illustrative CHF equivalent of the Teamed fee. This is illustrative, not a fixed CHF price. The actual CHF amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.

All entity cost figures in this table are typical ranges. They cover outsourced payroll, bookkeeping, statutory filings, BVG administration, cantonal tax filings, and HR admin for a small Swiss GmbH. They are illustrative, not law figures. Actual costs vary with the canton you register in, the detail of your setup, and the BVG pension plan you choose.

Switzerland's employer AHV/IV/EO rate of 5.3% is lower than most European peers. That means the statutory employer cost add-on is smaller, so the fixed entity overhead dominates the comparison longer. The crossover shifts higher, to around 7 to 10 employees, compared to 5 to 8 in the UK.

BVG occupational pension at 3.5% minimum for employees aged 25 to 34 applies to coordinated salary on both sides of the comparison. BVG rates increase by age band up to 9.0% for employees aged 55 to 65. At higher salary and age bands the BVG line grows and pulls the crossover closer to 7 employees. Run the Crossover Calculator with your own headcount and salary band.

1. Calculate the EOR cost

   Multiply the Teamed fee (from $599 USD) by your planned Swiss headcount. This is the fixed variable cost. It grows linearly as you hire.

2. Estimate the entity fixed overhead

   Typically CHF 4,000 to 6,000 per month for a small Swiss GmbH. This covers payroll bureau, bookkeeping, AHV/BVG filings, and first-point HR. This cost does not grow much until headcount exceeds 15.

3. Find the crossover headcount

   The crossover is where EOR monthly cost equals entity monthly overhead. For most Swiss tech salary bands this is around 7 to 10 employees. Use the Crossover Calculator for your own numbers.

4. Factor in non-financial triggers

   The maths gives you a headcount threshold. Cantonal tax efficiency, Swiss corporate substance for client contracts, and market-validation reversibility are separate questions that may override the cost crossover in either direction.

5. Plan the graduation date

   Allow 6 to 10 weeks for GmbH formation before the first payroll on your own entity. Factor in extra time for bank account opening and BVG pension fund registration. Start the GEMO process while EOR continues running.

These are typical ranges. They are not law figures. There is no law that sets what a Swiss GmbH costs to form. The range reflects real market rates for professional services in Zurich and Geneva. It varies with how much professional substance and depth your structure needs.

Why banking and BVG are the hidden bottlenecks

Swiss business banking has tightened considerably since 2023. Foreign-owned GmbHs face enhanced due diligence at major banks. Allow 4 to 8 weeks for a business account to open after application. BVG pension fund registration adds another 2 to 4 weeks. You cannot run the first payroll until both are in place. Plan for a 10-week window from incorporation decision to first paycheck.

These figures are typical market ranges for a small Swiss GmbH with 1 to 15 employees based in Zurich or Geneva. They are illustrative. They are not law figures. Actual costs depend on the canton, whether you outsource or hire in-house, and the detail of your payroll, BVG plan, and benefits programme.

Above 15 employees, dedicated Swiss HR capacity and an in-house finance function typically become necessary. At that point the cost band widens. Larger GmbHs also face heavier cantonal tax filings and potential works council consultation requirements under cantonal labour codes.

Most cost comparisons skip the managing-director liability dimension because it is hard to put a number on. It is worth naming explicitly before you decide.

Personal managing director duties

Under the Swiss Code of Obligations (OR), every GmbH managing director must exercise due diligence in managing company affairs, avoid conflicts of interest, and act in the interests of the company. A managing director who signs annual accounts they have not reviewed is personally liable for any misstatement under Art. 754 CO. These duties are personal. They cannot be outsourced to a fiduciary agent, even if the fiduciary prepares the accounts.

The AHV liability trap

The most under-estimated risk in a Swiss GmbH is AHV personal liability. If the company fails to pay AHV/IV/EO contributions on time, the managing directors can be held personally liable for the unpaid amounts under the Federal Act on Old-Age and Survivors Insurance. This is a hard personal liability. It is not limited by the GmbH share capital. Compensation fund enforcement against directors is not uncommon when small companies run into cash flow difficulties.

The compliance calendar

• AHV/IV/EO monthly filings: contributions must be remitted monthly or quarterly depending on total payroll. Late payment attracts interest charges and personal liability exposure.
• BVG pension fund contributions: due monthly. Late contributions to the pension fund carry regulatory penalties.
• Annual financial statements: within 6 months of year-end for a standard GmbH. Directors are personally responsible for their accuracy.
• Commercial Registry updates: any change to directors, share structure, or registered address must be filed with the cantonal Handelsregister within 30 days.
• UVG accident insurance: mandatory for all employees from day one. Failure to insure exposes the managing director personally to accident costs.

Each obligation is individually manageable. Together they consume real management attention every month. An EOR carries all of these on its own Swiss entity.

• Under 7 Swiss employees at average salaries: EOR is cheaper every month. The entity overhead of CHF 4,000 to 6,000 per month has too few people to amortise against.
• Market validation phase: you are hiring 1 or 2 people to test commercial fit. The GmbH formation cost, CHF 20,000 minimum capital commitment, and 6 to 10 week setup timeline all add up before you know whether Switzerland will deliver.
• Project-based hires: 6 to 12 month engagements where the formation cost will not amortise before the project ends. Swiss entity wind-down is straightforward but not free.
• Cantonal uncertainty: if you have not yet decided which Swiss canton to register in, an EOR gives you time to pick without committing to a Handelsregister address and notary relationship. Canton choice affects ongoing payroll costs, cantonal income tax rates, and commute logistics for employees.
• Acquired team you may divest: post-acquisition patterns where adding a Swiss entity creates more unwinding work if the business is later sold or wound down.

• Sustained headcount above 10 Swiss employees at average salaries: the entity overhead of CHF 4,000 to 6,000 per month amortises across enough people that per-head cost falls below the EOR fee.
• Cantonal tax optimisation: cantons like Zug, Nidwalden, and Appenzell Innerrhoden offer materially lower effective corporate and income tax rates than Geneva or Zurich. Establishing a GmbH in the right canton is a significant tax efficiency for IP-heavy or treasury-heavy operations. EOR employment does not create the corporate tax substance needed.
• Swiss substance requirements for EU contracts: some enterprise clients or regulated counterparties require a Swiss-incorporated supplier with local directors and a physical address. EOR employment with your workforce does not always satisfy that requirement.
• Long-term Swiss talent market: senior Swiss hires increasingly expect equity or profit-sharing arrangements that require your own Swiss entity to implement. Phantom share schemes are possible without an entity but require more structuring work.
• Cross-border group structure: if Switzerland is becoming the holding or IP location for your European or global group, a GmbH or AG creates the permanent establishment you need. EOR employment alone does not.

The technical mechanic is contract novation: the employment contract transfers from Teamed's Swiss entity to your new GmbH on a specified date. All terms carry across. Salary, BVG pension fund membership, annual leave entitlement, and continuous service date all remain unchanged. The employee sees a different employer name on their payslip and a new BVG contribution notice. Nothing else changes.

What we do operationally:

• Stand up your Swiss GmbH through GEMO, allowing 6 to 10 weeks, while EOR continues running in parallel.
• Register the entity with the cantonal AHV compensation fund and select a BVG pension fund.
• Open the entity accident insurance (UVG) policy for all employees from the novation date.
• Novate every active employment contract on a single effective date.
• Migrate BVG pension accounts and notify the pension fund of the employer change.
• File final EOR-period AHV filings and open new AHV registration on the entity from the novation date.
• Provide the same People Ops specialist as the post-graduation primary contact.

The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us.

Real HR and legal experts handle your Swiss hires from the first offer letter through every AHV filing and year-end reconciliation. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Every employer cost passes through at cost, itemised on every invoice. You see the AHV/IV/EO line at 5.3%, the BVG pension line at 3.5% minimum (age-banded above that), and the leave accrual for 20 days per year. Nothing is hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on one platform. Run the Crossover Calculator to see the month the model flips. Start from the Switzerland hiring overview. Key sources: Swiss Code of Obligations (admin.ch) and SECO State Secretariat for Economic Affairs.