When You Work as a Managing Director in Switzerland — in Your Own Company or in Someone Else’s

In Switzerland, many professionals assume that if they pay ALV (unemployment insurance) and social contributions like everyone else, they will be protected if their income disappears.

For managing directors, this assumption is often wrong.

The Swiss paradox of managing directors

As a managing director (Geschäftsführer / administrateur / direttore), you may:

receive a salary
pay AHV/AVS, ALV, and income taxes
comply fully with Swiss employment and tax law

On paper, this places you inside the same system as standard employees.

In practice, RAV may treat you very differently.

When income stops but unemployment does not exist (legally)

If the company you manage:

performs poorly
pauses activity
runs out of contracts or liquidity

you may lose your salary completely.

Yet, if you are:

a shareholder
a sole or controlling director
considered to have decision-making power

you are often not recognised as unemployed under Swiss unemployment law.

The result:
no ALV benefits, even with full contribution history.

Why RAV rejects many managing directors

Swiss unemployment insurance is built around a strict definition of unemployment:

the job loss must be involuntary
the employer must be clearly separate from the employee
the individual must not control hiring, firing or company strategy

A managing director frequently fails this test.

From the institutional perspective:

business failure is entrepreneurial risk
control equals responsibility
responsibility excludes unemployment status

This applies even if:

the company has no turnover
salaries are stopped
you are actively applying for jobs

Paying ALV does not guarantee ALV benefits

This is the most misunderstood point.

You can:

pay ALV for years
appear as a salaried employee
follow all Swiss compliance rules

And still receive zero francs in unemployment benefits.

Not reduced benefits.
Not delayed approval.
Complete exclusion.

The silent gap in the Swiss system

This issue is rarely discussed openly.

Switzerland is efficient, rule-based and predictable, but also rigid.

Managing directors sit in a grey zone:

too “independent” to be protected
too “employed” to build private buffers easily
fully exposed when income stops

This affects:

SME founders
consultants with GmbH / AG structures
directors in family businesses
professionals transitioning between employment and entrepreneurship

This is not about complaining — it is about clarity

This is not an argument against Swiss institutions.

It is a structural reality:

equal contributions
unequal access

Understanding this matters before people:

register a GmbH or AG
accept a managing director role
rely on ALV as a safety net

Why this needs to be said clearly

Entrepreneurship in Switzerland is often presented as stable and secure.

What is less visible is the absence of institutional fallback for managing directors when things fail.

Transparency does not weaken the system.
It allows people to make informed decisions.