Virtual or physical office: what you really need

Every Swiss company must have a registered office entered in the commercial register, with a valid address in the municipality indicated. But “registered office” does not automatically mean offices, desks and a warehouse. Between a virtual office (or domiciliation) and physical premises lies a whole range of solutions, each suited to a particular type of activity. The point is not which one is “better” in absolute terms, but what your business model really needs and what economic substance requires.

What the law requires

The Swiss Code of Obligations requires the company to have a registered office and a real contact address where it can receive notifications and correspondence. It does not impose square metres, on-site employees or a warehouse. To register with the commercial register you therefore need a valid address in the municipality of the registered office, not necessarily your own offices.

This opens two legitimate paths: domiciling the company at a professional address, or taking physical premises on lease or ownership.

The virtual office (domiciliation)

A virtual office is a professional address at which the company is domiciled and receives its correspondence. It typically includes:

• a legal address in the chosen municipality, registrable in the commercial register;
• receipt, scanning and forwarding of mail;
• sometimes the handling of official notifications and a telephone contact point.

It is the natural solution for holding companies, service businesses, digital activities, consultants and firms that do not need operating space. It reduces fixed costs and speeds up the launch.

Physical premises

Physical premises are needed when the activity requires space: on-site staff, receiving clients, production, storage, laboratories. This entails a lease (or a purchase), higher fixed costs and, often, hiring. In return, it provides a concrete operational presence, which in some sectors is indispensable and in others strengthens economic substance.

The crux: economic substance

This is where the real choice lies. For the tax authorities and for foreign counterparties, what matters is not only where you are registered, but where the company actually operates and makes its decisions. A purely formal office, with no activity, people or decisions on the ground, is fragile: it can be challenged on the tax side (effective residence) and on the banking side.

The right question is not “virtual or physical?”, but: where do management and activity take place? If decisions are made in Switzerland and there is real activity, a well-managed virtual office is entirely adequate. If, on the other hand, the company is run from abroad and the Swiss office is just a mailbox, the risk increases regardless of the square metres.

Costs and flexibility compared

• Virtual office: low, predictable costs, quick start-up, no lease commitment. Ideal at launch or for lean models.
• Physical premises: high fixed costs, contractual commitments, but a full operational presence. Necessary when the business demands it.

Many firms start with a virtual office and move to their own premises as staff and operations grow. The transition is simple: you just notify the change of address to the commercial register.

Mistakes to avoid

• Choosing physical premises “to be safe” when the activity does not require them: you pay unnecessary costs.
• Using a virtual office as a screen for a company run entirely from abroad, with no substance whatsoever.
• Neglecting the handling of official mail: uncollected notifications can have legal consequences.
• Ignoring the impact of the registered office on opening a bank account, a process increasingly attentive to operational reality.

In short

A virtual office is not a dubious shortcut: it is a legitimate and efficient solution when the activity does not require space. Physical premises are necessary when people and operations are needed. The guiding principle remains substance: the registered office must reflect where the company truly operates and decides.

Want to understand which office setup suits your business and set it up correctly? SIH ONE’s domiciliation division offers you an address, mail handling and compliant support.