How to hire employees in Switzerland without establishing a legal entity

Switzerland offers a compelling business environment, characterised by economic stability, high-skilled talent, and a central position in Europe. For many international companies, it’s a market worth entering. But setting up a Swiss subsidiary or branch is a significant undertaking. What if you only want to hire one or two people? Or test the market before investing in infrastructure?

That’s where hiring without a legal entity comes in. In this guide, I’ll walk you through whether it’s possible to hire employees in Switzerland without opening a company, what legal and tax obligations you need to consider, and how a Swiss Employer of Record (EOR) can make this not only possible, but efficient, compliant, and low-risk.

Can you hire in Switzerland without a legal entity?

The short answer is yes, but only if done correctly.

Under Swiss labour law, foreign companies cannot directly employ Swiss-based staff without registering as an official employer in Switzerland. However, this doesn’t mean you must open a local entity. There are compliant alternatives, such as partnering with a third party that is registered to act as the local employer on your behalf. This model enables companies to tap into Swiss talent while outsourcing the complexity of labour law, tax obligations, and benefits management.

This is where a Swiss Employer of Record becomes the preferred solution for international businesses.

Key legal and compliance requirements for foreign employers

If you’re hiring in Switzerland, directly or indirectly, you’re entering one of Europe’s most regulated labour markets. That means adhering to:

Swiss employment contract standards: Every employee in Switzerland must receive a contract that meets local labour law. This includes clauses on job title, duties, salary (in CHF), benefits, paid leave, termination terms, and working hours. The contract should be in an official Swiss language (usually German, French, or Italian), or at least available in both English and the local language.

Payroll tax and contributions: Employers must withhold and remit income tax and social contributions. These include:

• AHV/AVS: Old-age and survivors’ insurance
• ALV: Unemployment insurance
• BVG/LPP: Pension fund contributions
• Accident insurance: Mandatory for all employees

These obligations must be fulfilled monthly through Switzerland’s social insurance and tax systems. Failure to contribute or report correctly can result in fines, back payments, and legal complications.

Statutory benefits and working conditions: Swiss law enforces generous employee protections. These include a minimum paid holiday (at least 4 weeks), limits on weekly working hours (typically 45–50 hours), sick leave entitlements, maternity and paternity benefits, and adherence to national and cantonal public holidays.

Social security and reporting: Foreign employers must register employees with the correct insurance funds, pension schemes, and authorities. It’s not optional; non-compliance is a common cause of penalties.

Risks of hiring without proper compliance

If you try to contract someone in Switzerland without a compliant setup, you expose your business to significant risks.

• Misclassification: Treating a full-time employee as a freelancer or independent contractor can lead to reclassification by Swiss authorities. You’d then be liable for unpaid social contributions, taxes, and benefits, possibly retroactively for years.
• Legal liability: Without a registered presence or an intermediary like an EOR, you risk breaking Swiss labour laws. This could result in employee claims, audits, or penalties from tax and labour authorities.
• Damage to reputation: Swiss employees expect strong protections. Failing to provide proper contracts or benefits may harm your ability to hire and retain top talent, and can quickly damage your brand in a tight-knit professional community.

How a Swiss Employer of Record can help you hire without a local entity

Now, here’s the good news. If you want to hire employees in Switzerland without opening a company, you don’t have to compromise on compliance. You can work with a Swiss Employer of Record (EOR).

An EOR is a registered local entity that acts as the legal employer for your Swiss-based staff. While you retain full control over the employee’s work, projects, and performance, the EOR handles all the employment formalities on your behalf.

What the EOR handles:

• Drafting compliant employment contracts under Swiss law
• Registering employees with Swiss authorities and pension funds
• Running monthly payroll and submitting taxes and social security contributions
• Managing benefits, leave, holidays, and terminations in accordance with Swiss regulations
• Providing HR support and local expertise

In effect, the EOR becomes the employer on record in Switzerland, while you manage the employee’s daily activity as usual.

For example, a tech startup from London had identified a Swiss-based developer as a critical hire. Initially, they contracted him as a freelancer. But as his role became more integral and full-time, they realised the risks of misclassification were growing fast.

Instead of registering a Swiss branch, they worked with a local Employer of Record. Within a week, the developer had secured a Swiss employment contract, complete with full benefits, and a compliant payroll setup. The startup kept its internal flexibility and avoided the risk of retroactive fines or legal disputes.

Why companies choose the EOR model

Working with a Swiss EOR gives you a shortcut to compliant hiring, without the long delays, legal fees, and administrative costs of incorporation.

Here’s why it’s an increasingly popular route for global companies:

• Speed: Onboard new employees in a matter of days, not months.
• Compliance: The EOR takes full responsibility for adhering to Swiss employment laws.
• No local entity required: Ideal for short-term projects, remote teams, or early market testing.
• Cost-effective: Avoid the legal and operational overhead of setting up and maintaining a subsidiary.
• Scalability: Easily scale up or down based on project needs or business cycles.

It’s conducive if you’re hiring just one or two people, building a hybrid team, or exploring Switzerland as a new sales or development hub.

Hire in Switzerland with ease

Hiring employees in Switzerland without a legal entity is entirely possible—but only when done through the proper structure. Trying to sidestep employment law by using freelance contracts or informal agreements is not just risky—it’s likely illegal.

A Swiss Employer of Record gives you a practical, legal way to hire, pay, and manage employees compliantly, whether you’re expanding into the market or simply supporting a remote team member. It enables your business to remain agile, compliant, and focused on growth, rather than being bogged down in bureaucracy.

Ready to hire in Switzerland without opening a company? Get in touch with our team to explore how our Swiss EOR can help you expand quickly and compliantly, without the red tape.