Sole Proprietorship or Sàrl for a Medical Practice:

If you haven't yet, start with our general guide on setting up a sole proprietorship in Switzerland, it covers the mechanics (AVS registration, VAT, bookkeeping) that apply to any independent. This article picks up where that one leaves off, focusing on what's specific to physicians.

Most independents choosing between a sole proprietorship and a Sàrl weigh the same core factors: liability, cost, and taxation. For a physician, that framework is incomplete. Several sector-specific realities materially change the analysis, and often push the decision earlier than standard income thresholds would suggest.

Professional liability changes the risk profile, but not how you might think

For most independents, unlimited personal liability primarily means exposure to business risks: unpaid invoices, lease obligations, or supplier disputes.

For physicians, the picture is different. Clinical liability sits at the center, and this is where the legal structure has limited impact. A Sàrl does not shield a physician from liability arising from their own medical acts. That responsibility remains personal.

This is general information, not legal advice, for the specifics of your liability exposure, we'd recommend confirming with your insurer or legal counsel.

However, the structure still matters. A Sàrl can be exposed alongside the physician (for example, in relation to organization, staff, or contractual obligations), and it does provide protection against purely commercial risks: financing of equipment, lease commitments, and employment relationships.

In practice, professional liability insurance is essential regardless of structure. But once your practice includes staff, significant fixed costs, or financing, the added layer of separation provided by a Sàrl becomes materially more relevant than it would be for a typical freelance activity.

Billing structure (TarDoc / RCC): a technical detail with real consequences

Medical billing can be organized either under the physician personally or through a legal entity. This affects how your RCC number is structured and how insurers process claims.

This is not a blocking issue, both models exist, but it is not trivial either. Changing structure after setup can require:

• Updating billing configurations
• Reissuing agreements with insurers
• Administrative delays or temporary billing disruptions

It is worth aligning your legal structure, billing model, and RCC setup from the outset with your accountant and billing provider.

Group practice: where the sole proprietorship quickly reaches its limits

A sole proprietorship is, by definition, tied to one individual. The moment a second physician joins as a true partner, sharing ownership, profits, and decision-making, it is no longer a viable structure.

A Sàrl (or SA for larger setups) is designed for this:

• Defined ownership shares
• Clear governance rules
• Entry and exit mechanisms for partners

If a group practice, association, or partnership is even a medium-term possibility, this alone often justifies choosing a Sàrl from day one. Converting later, once patients, staff, leases, and contracts are in place, is significantly more complex than starting with the right structure.

Patient relationships are not a freely transferable asset

In many service businesses, a client portfolio can be sold and transferred as an asset. Medical practices do not operate the same way.

Patients retain freedom of choice. A change in ownership does not automatically transfer them in the same way as a traditional client base. As a result, the value of a medical practice lies more in:

• Location and infrastructure
• Organization and staff
• Reputation and continuity of care

This has direct implications for succession planning. A Sàrl structure generally facilitates transfers, as the entity itself can be sold or transferred, rather than attempting to restructure an activity tied to an individual.

The tax threshold often arrives earlier for physicians

Our general guidance places the tipping point between sole proprietorship and Sàrl at around CHF 100,000–150,000 in profit, where taxation as personal income becomes less efficient.

Many physicians, particularly specialists, reach this level relatively quickly, sometimes within the first one to two years. When that happens, the inability to split income between salary and dividends becomes a real cost factor.

The exact threshold depends on canton, family situation, and contribution structure, but the key point remains: if your projected income is already in that range, it is worth modeling both options before setting up, not after your first tax assessment.

So which structure makes sense?

As a practical rule of thumb:

• Testing an activity, working alone, limited fixed costs → a sole proprietorship remains a simple and valid starting point
• Hiring staff, signing a lease, or financing equipment → the Sàrl becomes significantly more relevant
• Planning a partnership or group practice → a Sàrl is, in practice, the appropriate structure from the outset
• Expecting profit above CHF 100,000–150,000 early on → a comparative tax analysis is strongly recommended before deciding

There is no universal answer, but there is a correct answer for your specific situation, and it should be based on a structured comparison, not assumptions.