Which insurances are mandatory by legal form

“Which insurances do I have to pay?” is among the first questions of anyone starting a business in Switzerland. The answer depends heavily on the legal form and on your status: independent owner or employee of your own company. Let’s clear things up.

The dividing line: self-employed or employed

In Switzerland everything changes according to your contribution status:

• In a sole proprietorship and a partnership, the owner is generally self-employed.
• In a GmbH and an AG, whoever works in their own company — even as a shareholder or director — is almost always an employee of the company, with a salary.

This distinction determines which insurances are mandatory and who pays them.

The basic social insurances (AVS/AI/IPG)

These form the first pillar and concern everyone (AVS = state old-age and survivors’ pension, AI = disability insurance, IPG = income compensation allowances):

• Self-employed: they register with a compensation fund and pay AVS/AI/IPG contributions on the business income. Note: the self-employed person is not insured against unemployment and must build up their own pension provision.
• Employees (including the owner of a GmbH/AG): contributions are withheld from the salary and split between employer and employee, plus the unemployment insurance (AD).

Occupational pension provision (LPP, 2nd pillar)

Here the legal form matters greatly:

• For employees (thus the working shareholder of a GmbH/AG) the LPP is mandatory once the minimum annual salary threshold set by law is exceeded. The company must affiliate with a pension institution.
• The self-employed person is generally not obliged to have LPP: they can join voluntarily but are not required to.

This is one of the reasons why setting up a GmbH/AG changes your pension structure: from owner you become an employee insured under the 2nd pillar.

Accident insurance (LAINF)

For employees it is mandatory and borne by the employer (LAINF = accident insurance):

• Occupational accidents and occupational diseases: always covered.
• Non-occupational accidents: mandatory if the worker reaches the minimum weekly number of hours provided for.

The self-employed person does not fall under mandatory LAINF as their own employer/worker: they must arrange it themselves, typically by adding accident cover to their own health insurance or with a dedicated policy.

Illness and loss of earnings

Basic health insurance (LAMal) is mandatory for all residents, on an individual basis — it does not depend on the form of the business. Different is the topic of loss of earnings due to illness for employees: it is not imposed by law everywhere, but is in practice a protection that many companies take out for their staff (and often expected under employment contracts).

Summary picture

• Sole proprietorship: self-employed owner. AVS/AI/IPG mandatory on income; no AD; LPP and accident cover optional (to be arranged on your own).
• GmbH and AG: the working shareholder is an employee. Social contributions on salary (incl. AD), LPP and LAINF mandatory above the legal thresholds.
• Regular employees: always covered by AVS, AD, LPP (above threshold) and LAINF.

Salary thresholds and rates change over time: what counts here are the principles, not figures to memorise. The check must be done on the specific case.

How we help

We define with you your contribution status, the mandatory affiliations and the appropriate cover for your legal form — avoiding both gaps in protection and unnecessary costs. Let’s review your cover.