In Swiss law and, in particular, in tax law, there is no definition of start-up. The Federal Council considers that defining young innovative companies for tax purposes poses major delimitation problems and therefore does not see the need for a legal definition.

What can I say about the taxation of start-ups?

For Hervé Lebret, head of the Innogrant-EPFL financing programme until 2019, it is difficult to apply SME tax standards to start-ups, because they have their own particularities.

In Switzerland, only two cantons have specific rules for start-ups and therefore provide a definition. The Canton of Geneva also offers a special status to "Young companies developing innovations" (JEDI status). The latter is granted to innovative companies that have spent at least 35% of their expenses each year since their incorporation on research activities, at least half of which are in Switzerland. This status, however, does not give any particular rights. However, it does provide access to specific procedures implemented to simplify or reduce applications for income and capital tax exemption.

The canton of Jura, on the other hand, has gone further. Since 2013, it has been encouraging investment in innovative companies through preferential taxation of private investors. It has created a special "NEI" status ("New Innovative Company") in order to give tax preference to investments in such companies.

Currently, some 15 Jura companies that commit a significant proportion of their expenses each year to activities directly related to research and development, and which promote the regional economy, have been awarded the "NEI" label.

Investor income invested in a company with "NEI" status is subject to a rate some 2% lower than other income. Tax-privileged investments include contributions, premiums, donations, non-repayable payments and equity investments in a company stamped "NEI" by an individual. The amount of investments may amount to no more than half of the taxable income, but no less than CHF 10,000 and no more than CHF 200,000.

It should be noted that the OECD defines, for statistical purposes, "gazelles" or "scale-ups" (high-growth start-ups) as follows: "Companies created less than five years ago, whose number of employees has increased by at least 20% per year over a three-year period, and which had at least 10 employees at the beginning of the observation period".

The Scale Up Vaud programme, initiated by Innovaud and supported by the Vaud Chamber of Commerce and Industry, uses this definition for scale-ups.