The following gives you an overview of the regulations both for EU citizens and non-EU citizens.
The bilateral agreement on the free movement of persons between Switzerland and the EU came into force on 1 June 2002 and facilitates entry, residence and employment in Switzerland for EU citizens as well as citizens from Norway, Iceland (EFTA members) and, conditionally, Liechtenstein.
EU citizens have complete freedom of movement within Switzerland and Swiss citizens within EU countries. Since 12 December 2008 the Swiss Confederation has been a full member of Schengen.
Your status as a European citizen theoretically gives you the right to settle in Switzerland and to set up your own business, provided that you do so assuming full responsibility and at your own risk. For more information, visit this website helping foreigners be self-employed in Switzerland and the Swiss authorities online.
Since the Swiss-EU bilateral agreement for free labour movement, non-EU citizens can only get a Swiss work permit if their potential employer proves there is no Swiss or EU citizen available to do the job.
However, there are exceptions to this rule for highly qualified specialists and top executives. If you do get a work permit, this will usually be defined in your residence permit.
The types of residence permits for non-EU citizens are very similar to the permits given out to EU citizens, only that they are harder obtain and to renew.
(1) Short-term residence permit (L Permit)
A short-term residence permit L (Kurzaufenthaltsbewilligung EG) is valid for up to one year and can be renewed. It is linked to a specific job and company and you may not be granted a new permit if you change jobs. After 24 months the residence permit ends definitively.
(2) Residence permit (B Permit)
A B Permit is normally valid for one year and can be renewed, as long as there is no reason for it not to be extended, for example if you are unemployed and receive welfare. To non-EU citizens, it is only issued in specific circumstances (i.e. if you’re a highly trained specialist in a profession where there’s currently a shortage of qualified people from Switzerland or the EU).
(3) Settlement permit (C Permit)
A C Permit is given out for permanent residency in Switzerland and can be renewed indefinitely. To non-EU citizens, it is normally only given out after 10 years of residency in Switzerland. However, Canadian and US citizens can apply for this settlement permit after 5 consecutive years in Switzerland. There are some exceptions for spouses of Swiss citizens and other groups. The C Permit allows you to freely change jobs, employers and/or become self-employed.
(4) Border crossing permit (G Permit)
A G permit (Grenzgängerbewilligung/permis frontalier) is issued to people living in another country but working in Switzerland. There are many people commuting to Switzerland for work, as the cost of living in neighbouring countries is significantly lower than in Switzerland. Unlike L, B and C permits, a G permit doesn’t entitle you to any residential rights in Switzerland. A G permit is renewed annually and cannot be converted into a residential permit.