Commercial subletting in Switzerland explained simply: What is permitted, what is legally applicable, and when is it subject to value added tax?
In a business world that is increasingly characterized by flexibility, one topic is becoming more and more important: commercial subletting. Companies are downsizing, shifting work models to home offices, or looking to bridge temporary vacancies. In such cases, subletting office or commercial space can be an attractive solution. But what is the legal situation in Switzerland? What are tenants allowed to do – and where are the limits? What about tax obligations?
Commercial subletting refers to the situation where the main tenant of a commercial space sublets all or part of it to a third party. This can be a single office in a larger unit or an entire floor that is not currently needed. In this case, the main tenant becomes the intermediate landlord, while the new user acts as the subtenant. Unlike traditional residential rentals, commercial subletting exclusively involves premises that are used for business purposes, such as offices, retail space, restaurant space, or even storage space.
In principle, subletting commercial space is permitted in Switzerland – but not without restrictions. The Swiss Code of Obligations (Art. 262 OR) stipulates that subletting is only permitted with the landlord's consent.
However, this consent may not be refused without good reason. The prerequisite is that the tenant informs the landlord in full about the planned subletting. This includes, in particular, who the subtenant is to be, how the space is to be used, and the terms and conditions of the subletting.
A landlord may refuse consent, for example, if the subletting would give rise to commercial competition, if the use is not in line with the agreed purpose, or if the subtenant would make excessive use of the property. In the absence of such reasons, subletting cannot be prohibited.
Commercial letting always applies when premises are not used for private residential purposes but for the pursuit of an economic or business activity. This covers a wide range of uses: traditional offices as well as retail space, practice rooms, studios, workshops, or warehouses.
The type of use should always be specified in the lease agreement. If a tenant wishes to change the use—for example, to use an office as a sales room or to sublet it to operate a photo studio—this must be agreed with the landlord. This is because even in the context of subletting, the original purpose remains binding.
A commercial subtenant is a person or company that is itself a tenant of a commercially used space and sublets it to another party. This means that the subtenant has a contractual relationship with both the owner as the tenant and the sublessor as the landlord.
This dual role comes with responsibility. Regardless of how the subtenant behaves, the sublessor remains responsible for all obligations to the owner. For example, if the subtenant does not pay or uses the space for purposes other than those specified, the sublessor is liable. The sublessor must also ensure that the sublease agreement does not conflict with the main agreement.
Another important aspect concerns the tax treatment of subletting – in particular the question of VAT liability. In principle, the letting of real estate in Switzerland is exempt from VAT. However, the Swiss VAT Act provides for the possibility of submitting to VAT (opting in) for the letting of office and commercial premises. In addition, if the annual income from subletting amounts to CHF 100,000 or more, the sublessor must register for VAT with the Federal Tax Administration.
If the sublessor decides to voluntarily subject the subletting to VAT (opting in), they must show the rent including VAT. In return, however, they can also claim input tax on related expenses. Whether this option makes sense depends on the specific business model and should be clarified with a tax expert.
In order for commercial subletting to be successful and legally sound, transparency and clear communication with the owner are essential. Tenants who wish to sublet should inform the landlord at an early stage, clearly state the use and the intended subtenant, and record all relevant information in writing.
The sublease agreement should be professionally drafted and, in particular, regulate issues such as rent, duration, use, termination, and return. Insurance issues and liability for damage should also not be underestimated. It is also important that the intended use of the rental property is adhered to – both by the interim tenant and by the subtenant.
On the owner's side, it is advisable to check carefully whether the planned subletting fits in with the property's usage concept and whether the proposed subtenant has sufficient creditworthiness and reliability.
Commercial subletting offers companies an attractive way to respond to changing space requirements. In times of home offices, project work, and short-term business models, it can be a real advantage—provided that the legal framework is observed.
In Switzerland, it is generally permitted provided that the landlord agrees and there are no legitimate objections. Under certain circumstances, it is subject to VAT – a point that should be carefully examined.
Those who communicate clearly, provide information in good time, and draw up their contracts carefully can be on the safe side, both economically and legally, with commercial subletting.
© 2025 maison (Schweiz) GmbH