Declare a Hemp Processing Business to SECO: Step-by-Step Guide

Introduction

Creating a hemp processing business in Switzerland requires mastering specific legal, administrative, and economic aspects. Hemp, when it does not exceed 1.0% THC, is legal in the Swiss Confederation, and its exploitation is governed by various legislative texts. One of the key points for operating this type of business is to correctly declare your company to the State Secretariat for Economic Affairs (SECO). This step-by-step guide will help you understand the essential requirements before starting, as well as best practices for complying with current regulations.

In this article, we will review the legal basics related to hemp in Switzerland, the importance of SECO in the declaration and monitoring of economic activities, and the practical steps to establish a company dedicated to hemp processing and declare it properly. We will also discuss potential controls and inspections that may occur. All information presented is based on credible references, including the Federal Narcotics Act (LStup, RS 812.121) (source: Fedlex) and the business creation guidelines published by SECO (source: seco.admin.ch).

What is Hemp Processing?

The term “processing” encompasses a wide range of processes aimed at extracting, modifying, or conditioning the hemp plant. In the Swiss context, hemp with a THC content of less than or equal to 1.0% is considered legal (source: Fedlex, LStup, RS 812.121). Processing activities may include:

  • Extraction of cannabinoids (CBD, CBG, etc.).
  • Production of concentrates (oils, waxes, etc.).
  • Drying and preparation of resins or hash.
  • Creation of derivative products such as cosmetics or dietary supplements (according to current regulations).

If you wish to operate legally in this sector, the first step is to properly register your business. In Switzerland, declaration with SECO is a mandatory formality for most legal entities and commercial activities.

The Importance of SECO

The State Secretariat for Economic Affairs (SECO) is the official body responsible for defining and implementing the economic policy of the Confederation. Among other missions, SECO ensures the statistical monitoring of economic activities and ensures equal regulation for all actors. Administratively, SECO collaborates notably with:

  • Cantonal commercial registry offices.
  • The Federal Office of Public Health (FOPH), when it comes to regulated substances.
  • The Federal Customs Administration, in case of import or export of raw materials or processed products.

By declaring your hemp processing business to SECO, you allow the administration to identify you as a legal actor, receive official documents related to your fiscal and legal obligations, and comply with the best practices imposed by the Confederation.

According to the Federal Narcotics Act (LStup, RS 812.121), any cannabis variety with a THC content greater than 1.0% is considered a prohibited narcotic (source: Fedlex). Below this threshold, the plant is considered industrial hemp or “legal hemp.” Processors must ensure that the varieties they use are certified and meet this 1.0% limit. Otherwise, they risk criminal penalties.

Legal hemp is also subject to the Narcotics Ordinance (OStup, RS 812.121.11), which defines the conditions under which it can be exploited. For processing activities, the following points must be observed:

  1. Maintain control of THC content: regular analyses in an independent laboratory attest to compliance with the legal threshold.
  2. Comply with labeling rules for derivative products: health claims are strictly regulated.
  3. Follow customs prescriptions, especially if you import or export hemp flowers or extracts.

Accredited laboratories are authorized to issue analysis certificates, which can be presented to authorities in case of control (source: Association of Cantonal Chemists of Switzerland).

Federal Council Ordinances

In addition to the mentioned laws and ordinances, additional directives may be issued by the Federal Council. They may concern plant taxonomy, maximum THC concentration, import conditions, etc. It is therefore advisable to regularly check updates on Fedlex or the SECO website to stay informed.

Preliminary Steps Before Declaration

Before even proceeding with the official declaration of your business to SECO, certain preliminary steps are essential.

The first choice concerns the legal structure of your business. Several forms are possible:

  • Sole proprietorship: simple to create, but the owner’s liability is unlimited.
  • Limited liability company (LLC): offers limited liability to the invested capital.
  • Public limited company (PLC): suitable for projects requiring more capital and offering limited liability to shareholders.
  • Cooperative: if your project involves several producers or processors wishing to group together.

Each legal form has its own advantages and disadvantages in terms of taxation, responsibilities, and governance. For official information, you can consult the startbiz.ch website, managed by the Confederation, which offers a business creation assistance tool.

Obtain Necessary Permits

At the cantonal and communal level, you may need permits for hemp cultivation or processing. Depending on the location of your operation, contact:

  • The cantonal agriculture service.
  • The competent communal authorities on construction, noise, or odor issues.
  • The Federal Office of Public Health (FOPH) if your project involves processing products classified as narcotics (if you exceed the legal THC rate, for example).

In the specific case of CBD hemp (≤ 1.0% THC), you will need to prove that the varieties used are legal, for example by keeping seed certifications or commissioning a laboratory to regularly analyze your crops.

Declare the Business to SECO: Step-by-Step Guide

Once you have defined the legal form and validated the necessary authorizations, the declaration procedure follows. This involves informing the economic authorities and the Confederation of the creation and operation of a hemp processing activity.

Step 1: Gather Required Documents

To declare your business, you will need, at a minimum:

  • A copy of your statutes if you have created an LLC or PLC.
  • An extract from the commercial register, if you are already registered there.
  • Proof that you have obtained the necessary authorizations (at the cantonal or communal level).
  • Proof of compliance with the THC content of your raw material (laboratory analysis).
  • Any additional document required by the canton where you operate.

These supporting documents will be required to complete the administrative file. Ensure you have recent and compliant copies (commercial register extract dated less than three months, for example).

Step 2: Fill Out the Declaration Form

SECO offers, in conjunction with cantonal administrations, a business declaration form. It may be a digital document available via startbiz.ch or a PDF to download from seco.admin.ch. You will need to provide:

  1. The legal address of the business: headquarters, phone number, email address.
  2. The type of activities: specify that you practice hemp processing, detailing the exact nature of your operations (extraction, production of derivative products, etc.).
  3. The legal form: sole proprietorship, LLC, PLC, etc.
  4. The number of employees: important for insurance and statistical reasons.
  5. The responsible persons: information on managers, administrators, etc.

Once the form is completed, it must be signed (or electronically validated) by one of the company’s legal representatives.

Step 3: Interaction with Customs

If your hemp processing activity involves importing raw materials (flowers, resins, etc.) or exporting processed products, you will also need to declare your business to the Federal Customs Administration. This step is usually done by opening an “import/export” account via the customs identification system (e-dec). You must meet the following conditions:

  • Provide analysis certificates attesting to the legal THC rate.
  • Explain the final destination of the products (Swiss market, European Union, etc.).
  • Contact the competent customs service if you have specific questions regarding the tariff codes applicable to your processed products.

Step 4: Activity Communication and Information Update

The initial declaration to SECO is not an end in itself. You will also need to:

  • Keep your activity data up to date (address, legal form, sector of activity) in official databases.
  • Inform SECO of any major changes (headquarters transfer, merger, cessation of activity).
  • Annually declare your workforce, especially for the management of social insurance (AVS, AI, APG) and the establishment of economic statistics.

Compliance with these obligations ensures the transparency of your business and avoids future complications (unexpected controls, administrative sanctions, etc.).

Potential Controls and Inspections

Hemp processing companies are sometimes subject to specific controls. Here are some reasons for visits by authorities:

  1. Verification of THC content: often carried out by cantonal chemists or accredited laboratories, to certify that your products do not exceed 1.0% THC.
  2. Control of storage and hygiene conditions: depending on the nature of your production, the Federal Food Safety and Veterinary Office (FSVO) may intervene if you manufacture hemp-based foods.
  3. Compliance with legal labeling mentions: any health or efficacy claim must meet the standards defined by the FOPH when it comes to products that may be used for therapeutic purposes.
  4. Administrative audit: inspectors may check your registration in the commercial register, the compliance of your declaration with SECO, your VAT declarations (if applicable), and your general accounting.

If you collaborate with accredited laboratories and strictly follow safety and hygiene rules, you will significantly reduce the risk of having your workshop closed or your products withdrawn from the market.

Best Management and Compliance Practices

To sustain your activity and limit risks, it is advisable to implement good management and compliance practices:

  1. Record keeping: maintain a production log where you note the origin of hemp lots, their volume, entry date, and analysis results (THC, CBD, possible contaminants).
  2. Transparent documentation: if you extract CBD or manufacture hash or other concentrates, describe your extraction methods (supercritical CO₂, cold pressing, etc.). Authorities appreciate traceability.
  3. Regular internal controls: conduct random analyses yourself or send samples to a laboratory, even if the law does not impose it regularly. It is a quality guarantee for your customers and a sign of seriousness.
  4. Staff training: ensure your employees know the rules in force on hemp and know how to react in case of control. They should notably be able to explain the THC content of the raw material and the final use of the processed product.

Tips for Sustainable Development in the Hemp Sector

Besides complying with the law, building a sustainable business model in the hemp sector can provide you with additional credibility and a competitive advantage. Here are some avenues:

  • Favor local varieties: if possible, collaborate with Swiss farmers who grow certified varieties, adapted to the Swiss climate and low in THC.
  • Optimize resource use: hemp is an ecological plant, capable of absorbing significant amounts of CO₂. Implement water and nutrient recycling systems for cultivation.
  • Respect environmental standards: avoid massive use of chemical fertilizers and pesticides. Some Swiss organic certifications can help you enhance your production.
  • Promote transparency: inform your customers about cultivation, processing, and quality control methods. A “Swiss Made” or “Bio Suisse” label can strengthen trust in your brand.

This approach will not only contribute to environmental preservation but also meet a growing demand for high-quality, sustainable hemp products.

Tax and Insurance Implications

Like any Swiss company, a hemp processing structure is subject to various tax and social insurance obligations:

  1. Value-added tax (VAT): if your annual turnover exceeds 100,000 CHF, you must register for VAT and charge the corresponding tax to your customers.
  2. Social insurance: you must affiliate your employees with AVS (old-age and survivors’ insurance), AI (disability insurance), and LPP (occupational pension), as well as accident insurance. The law requires you to pay the corresponding contributions.
  3. Other possible taxes: if you produce essential oils or extracts considered as foodstuffs, specific taxes sometimes apply (for example, the incentive tax on volatile organic compounds, in some cases).

Regularly check the legal provisions on admin.ch and consult a fiduciary if necessary to optimize your company’s taxation while respecting the legislation in force.

Risks and Sanctions for Non-Compliance

Any activity related to hemp processing is closely monitored, given the risk of narcotics subsistence. In case of non-compliance, especially if a control reveals a THC rate above 1.0%, the sanctions may include:

  • Seizure and destruction of goods.
  • Administrative fines.
  • Criminal prosecution for violation of the Narcotics Act if the THC content exceeds the legal threshold.
  • Temporary or permanent prohibition to operate if the company acted fraudulently or evaded controls.

Moreover, if you do not declare your business to SECO or fail to update your information, you risk administrative sanctions, financial penalties, or even having to temporarily cease your activities.

Future Prospects for the Hemp Sector

Switzerland is exploring new opportunities around the hemp sector. Discussions on a possible evolution of regulations, particularly for products for medical or controlled recreational use, are ongoing in some parliamentary committees (source: Swiss Parliament). Although legislative timelines can be long, entrepreneurs are advised to stay informed, as future changes could affect:

  • Authorized THC limits.
  • Approval procedures for new CBD-containing products.
  • Customs regime for international trade of hemp-derived products.

By anticipating legal changes and adopting a proactive strategy, you maximize your chances of long-term development in a booming market.

Conclusion

Opening and declaring a hemp processing business in Switzerland is an exciting project that requires rigor and adherence to legal frameworks. Legal hemp (≤ 1.0% THC) is not considered a narcotic under the Federal Narcotics Act (LStup, RS 812.121), but its exploitation remains strictly monitored to prevent any abuse or confusion with prohibited cannabis.

By following the steps presented in this guide, you will be able to:

  1. Define the appropriate legal form for your structure.
  2. Obtain the necessary authorizations from cantonal and communal authorities.
  3. Complete the declaration form with SECO and, if necessary, with the Federal Customs Administration.
  4. Comply with controls, inspections, and labeling requirements imposed by the Confederation.

Meeting these requirements not only ensures the legality and sustainability of your business but also builds trust with your customers and partners. Indeed, the legal hemp market is experiencing real enthusiasm in Switzerland and internationally. Engaging in this sector with transparency, traceability, and compliance with the rules will allow you to sustainably develop your activity and participate in the expansion of a sector with multiple prospects.

Whether your goal is to manufacture CBD extracts, market resins, or offer innovations in the cosmetics field, it is essential to know your obligations towards SECO and other competent bodies. By staying informed of legislative developments and cultivating a quality approach, you will be able to thrive in a competitive environment and make a positive contribution to the hemp universe in Switzerland.