RAV & Business Creation: How to Leverage the Hidden Potential of the FSE Measure

This article is Part 3 of the series "Genuine Self-Employment from Unemployment".

The integration of job seekers into the primary labor market forms the primary core mandate of Swiss Unemployment Insurance (ALV). A specific, highly complex instrument to achieve this overarching goal is the labor market measure (AMM) for the "Promotion of Self-Employment" (FSE) pursuant to Art. 71a to 71d of the Unemployment Insurance Act (AVIG) in conjunction with Art. 95a to 95e of the Unemployment Insurance Ordinance (AVIV).

This measure pursues the purpose of enabling unemployed persons to plan and prepare a permanent, economically viable self-employment in a structured manner, without being subject during the planning phase to the existential pressure of an immediate loss of earnings or the rigid obligation to conduct job searches. Financial support is provided primarily through the payment of regular daily unemployment allowances during a defined planning phase and secondarily through the potential assumption of loss risks associated with guarantees.

This report analyzes the FSE measure in extreme substantive and legal depth. The investigation is based entirely on the federal legal foundations, current Federal Supreme Court case law, binding directives of the State Secretariat for Economic Affairs (SECO AVIG Practice AMM and ALE), and the specific cantonal execution regulations of the Canton of Graubünden. A special regional focus is placed on the administrative handling for job seekers from the Viamala region, specifically the municipality of Domleschg, interacting with the competent Regional Employment Center (RAV) Thusis, the Office for Industry, Trades and Labor (KIGA) Graubünden, and the Social Insurance Authority (SVA) Graubünden.

Prerequisites for Receiving Daily Allowances During the Planning Phase

The granting of daily allowances for the promotion of self-employment is tied to strict, cumulatively fulfilled normative conditions. The substantive assessment of these conditions rests with the cantonal authority, in the Canton of Graubünden the KIGA, in close coordination with the responsible Unemployment Fund (ALK). The measure explicitly does not serve to grant insured persons unjustified economic advantages or to subsidize individual sectors, but primarily aims at the permanent termination of unemployment.

The applicant must primarily meet the general eligibility requirements for unemployment compensation (ALE) according to Art. 8 AVIG. This implies that the person concerned must necessarily be unemployed and suffer an assessable loss of work of at least two consecutive full working days, leading to a loss of earnings. Regarding the contribution period, the law requires proof of at least 12 contribution months within the regular two-year frame period for the contribution period. However, the legislature allows exceptions: Persons who are legally exempt from fulfilling the contribution period—for example, as a result of school education, illness, or the cessation of an Invalidity Insurance (IV) pension—may also be entitled to planning phase daily allowances, taking into account any special waiting periods.

A mandatory demographic requirement is that the insured person has completed their 20th year of age at the time of benefit payout. Furthermore, a lawful place of residence in Switzerland is indispensable; cross-border commuters are excluded from this specific benefit of the Swiss ALV and must assert their claims in their country of residence.

A fundamental premise is the general employability (readiness and ability to work) of the applicant. The person must in principle be ready, able, and entitled to accept suitable employment up to the time of the legally binding FSE approval by the KIGA. SECO states unequivocally in its AVIG Practice AMM (para. K31) that an existing lack of employability cannot be legitimized by a retroactively issued FSE decree. This applies in particular to configurations where the insured person has already independently begun implementing the planning phase without having submitted a formal application to the responsible RAV within a useful timeframe. Accepting a suitable salaried position always takes priority over promoting self-employment in KIGA's practice.

A critical legal stumbling block during application review is the causal connection between the onset of unemployment and the desire for professional self-employment. According to established SECO AVIG Practice AMM (para. K7), financial support according to Art. 71a et seq. AVIG is strictly excluded if the insured person resigned from their last salaried position specifically for the purpose of becoming self-employed. Unemployment insurance is designed as loss insurance and must not legally be treated as a state startup fund.

If a job is given up through own fault and without justifying reason (Art. 30 para. 1 lit. a AVIG), the cantonal authority mandatorily issues suspension days in benefit eligibility. The Federal Supreme Court has confirmed in constant case law that the duration of the suspension is measured according to the degree of fault and can amount to up to 60 days in cases of severe fault. If a direct causal link exists between this self-inflicted resignation and the FSE application, the application will be rejected in full. This inhibiting causal connection is only considered legally interrupted when the insured person decides on self-employment only after several months of regular daily allowance receipt and evidently unsuccessful job search, or if they have in the meantime pursued salaried employment on the open labor market for at least six consecutive months.

Another essential distinction concerns the nature of the venture: start-up versus company acquisition. The planning phase daily allowances conceptually serve exclusively to prepare a completely new economic existence. Federal Supreme Court case law and explicit SECO directives (para. K23) state that when acquiring an existing, operationally active company or entering such a construct as a partner, no daily allowances for the planning phase may be approved. The legal and economic rationale behind this dictates that for an established company, the primary planning and preparation phase of market entry has already been completed. Administrative changes to be made, such as commercial register filings or notary appointments in an acquisition, are considered mere execution acts of an already completed entrepreneurial decision and do not justify a multi-month release from unemployment insurance duties.

If all normative preconditions are met, the cantonal authority approves a planning phase of a maximum of 90 daily allowances, corresponding to a duration of roughly four months. If fewer than 90 daily allowances remain in the insured person's regular two-year benefit frame period, these planning daily allowances can only be granted within the scope of the remaining claim, as exceeding the statutory frame period is impermissible. If several unemployed persons decide to build a single project together, each of them has an individual claim to a maximum of 90 daily allowances.

During this approved phase, a significant administrative privilege applies: The insured person is completely exempt from ordinary control regulations pursuant to Art. 17 AVIG. They do not have to provide proof of personal job search efforts to the Unemployment Fund and are released from the obligation to attend job placement counseling sessions at the RAV. During this period, they continue to receive 70 or 80 percent of their insured earnings in the form of daily allowances in order to dedicate themselves full-time to developing their business. Before or during this planning phase, KIGA can approve attendance at specific courses or coaching sessions (for example the FsE support program IFJ) to convey the methodological tools for starting the business; during the duration of such courses, the FSE planning phase is formally suspended, and the person receives standard ALE benefits, after which the remainder of the FSE daily allowances can continue to be drawn.

The Business Plan: Submission, Viability Assessment, and Financial Dimensions

The mere expression of intent to become self-employed out of unemployment is in no case sufficient to initiate the FSE measure. The legislature strictly requires the submission of a thoroughly documented concept paper.

Pursuant to Art. 71a para. 1 AVIG and SECO directives (para. K36), the applicant must submit a so-called draft project, typically in the form of a business plan or detailed concept paper. This draft project must mandatorily aim to build an economically viable and lasting existence. Content-wise, the administration demands structured and realistic details across various business areas. It begins with the description of the business idea, outlining precise details of offered products or services as well as the unique selling proposition (USP). Linked to this, a market analysis is required, identifying direct competition, evaluating their strengths and weaknesses, and defining the target customer base and geographical sales markets. Operational aspects such as personnel organization, logistics, required infrastructure, premises, and planned legal form as well as company seat must also be set out.

The quantitative core of the business plan is formed by financial planning: This requires a detailed cash flow and operating budget for the first operational year, a breakdown of required equity and debt capital, and realistic revenue and earnings projections. The dossier is completed by a chronological action plan displaying milestones and tasks up to the definitive launch of the enterprise. In addition to these business-specific documents, the FSE application must be supplemented by formal attachments such as an updated CV, relevant educational diplomas, and work certificates to prove the founder's personal suitability and industry-specific qualifications.

For a job seeker residing in the political municipality of Domleschg (formed through mergers of the villages Almens, Paspels, Pratval, Rodels, and Tomils), the administrative process necessarily begins at the Regional Employment Center (RAV) Thusis, located at Feldstrasse 2 or 4 in 7430 Thusis. The RAV employment advisor initially records the desire for self-employment, evaluates suitability in a first consultation, and hands out the detailed questionnaire. The fully compiled FSE application, including business plan and all attachments, is then submitted through the RAV. RAV Thusis conducts a formal preliminary check and determines whether insurance law criteria are met before forwarding the dossier to the higher cantonal decision-making authority. In the Canton of Graubünden, the final substantive decision on granting FSE measures rests with the Office for Industry, Trades and Labor (KIGA), specifically the Labor Market Measures (AMM) department based at Ringstrasse 10 in 7001 Chur.

The substantive and microeconomic evaluation of the submitted project is carried out by specialists in the AMM department of KIGA Graubünden. The focus of this evaluation rests on the economic viability and durability of the business model within the regional and supra-regional market environment. If operational feasibility appears doubtful given the presented figures, or if it becomes apparent that the insured person would only be partially occupied long-term by the planned business (underemployment) and thus remain partially unemployed indefinitely, KIGA is legally bound to reject the project. Daily allowances from the ALV must under no circumstances be instrumentalized to artificially maintain permanent underemployment or an unprofitable hobby project through subsidies from the insured community.

In addition to paying daily allowances, AVIG provides for a subsidiary form of benefit in Art. 71a para. 2: Assumption of loss risk through a guarantee. If the insured person applies for this option, the business plan undergoes an even more rigorous, bank-standard credit check. In this case, KIGA Graubünden forwards the dossier to a guarantee organization recognized and subsidized by the Confederation. For the Canton of Graubünden, the entity responsible is primarily BG OST-SÜD Bürgschaftsgenossenschaft für KMU based in St. Gallen, operating according to business management principles, but on a non-profit basis. This cooperative can grant guarantees up to a maximum amount of 1 million Swiss francs, with the ALV compensation fund assuming 20 percent of this risk (maximum 200,000 francs) in the event of loss. BG OST-SÜD evaluates the business model, financial projections for the coming three years, liquidity planning, and the creditworthiness of the proponents using detailed affordability calculations.

Assuming such a guarantee incurs costs for applicants: The review carries a base fee of 500 francs for loans up to 30,000 francs, plus 100 francs for every additional 10,000 francs, with SECO covering these fees within the context of FSE; for an active guarantee, an annual risk premium of 1.25% of the guarantee amount is charged later. A crucial timing aspect: If an unemployed person wishes to combine planning phase daily allowances with such a loss risk guarantee, the corresponding application must mandatorily be submitted within the first 19 weeks of controlled unemployment; if only a guarantee without daily allowances is requested, the submission deadline is 35 weeks.

Pitfalls in AHV Registration and Social Security Law Dimensions

The transitional process from employee status in unemployment to self-employment in Switzerland is characterized by a dense, often counter-intuitive web of social security and tax obligations. Formal recognition as "self-employed" is by no means automatic upon commercial register entry, but requires a specific procedure with the Federal Old Age and Survivors' Insurance (AHV). For persons with a place of business in Domleschg, the Social Insurance Authority (SVA) Graubünden at Ottostrasse 24 in Chur is the substantively and locally competent authority. Major pitfalls hide here that, if inadequately planned, can lead to clawbacks of ALV benefits, denial of pension fund capital, or massive tax back-payments.

The most legally consequential dilemma confronts founders when choosing their legal form. While SECO practice (para. K12) grants FSE participants formal freedom in choosing their legal vehicle, the consequences in social security law are dichotomous: If a founder chooses a sole proprietorship or general partnership, SVA Graubünden qualifies them as self-employed. They bear complete entrepreneurial risk and pay personal AHV/IV/EO contributions up to a maximum rate of 10% on their net earned income. In this status, the contribution obligation to unemployment insurance lapses; logically, in the event of business failure, no unemployment protection exists anymore, and mandatory accident insurance (UVG) lapses in favor of voluntary solutions like FUV or extending ALV accident cover via interim insurance with Suva for up to six months.

If, on the other hand, the founder establishes a legal entity (GmbH or AG), they become an employed worker of their own company from the dogmatic perspective of SVA Graubünden. This forces them and their company to pay all split social security contributions, including ALV premiums and occupational pension contributions (pension fund, BVG), provided the salary exceeds the entry threshold of 22,050 francs per year. However, the hidden "ALV trap" herein (codified in Art. 31 para. 3 lit. c AVIG) states that despite consistent contribution payments, these shareholders have no claim to short-time work compensation or regular unemployment benefits in the event of a severe drop in orders or a pandemic-related crisis, as long as they can significantly influence the strategic decisions of the business in their capacity as managing directors or board members. The legislature thus prevents abuse where entrepreneurs could put themselves on short-time work at the expense of the ALV. Only upon definitive and irreversible separation from the enterprise—through liquidation, bankruptcy, or complete sale of shares and deletion of signing authority in the commercial register—does a legally enforceable claim to unemployment compensation arise.

Another deep legal pitfall is the issue of "pseudo-self-employment" (bogus self-employment). When founders choose the sole proprietorship path, status recognition by SVA Graubünden necessarily occurs ex post, i.e., only after business activities have effectively commenced. SVA bases its assessment not on contractual declarations between the contractor and their clients, but strictly analyzes actual economic circumstances. To qualify as self-employed under social security law, mandatory criteria must be cumulatively met: The founder must make significant investments in their own business infrastructure, personally bear financial collection and loss risks, appear on the market under their own company name, and not be subject to third-party instructions in executing mandates. As a central rule of thumb for compensation funds, client plurality applies. If the sole proprietor earns more than 50 percent of their annual income from a single client or has fewer than three independent customers, a strong suspicion of economic dependence and pseudo-self-employment arises. If SVA refuses recognition or revokes it retroactively during a regular employer audit, fiscal consequences are drastic: The formal "client" is reclassified ex tunc as legal employer and is forced to pay employee and employer contributions to AHV/IV/EO, ALV, and BVG premiums up to five years retroactively on the paid fees. For the FSE participant, this means not only the loss of self-employed status, but exposes them to the risk that KIGA Graubünden challenges granted planning phase daily allowances if it appears the alleged company setup was designed from the start as disguised permanent employment behind a mandate cover.

For many founders, capital saved in pension funds (BVG) represents the most important funding source for self-employment. Here too, regulation presents treacherous hurdles. Cash withdrawal of vested benefits for starting a business is permitted under the Vested Benefits Act (FZG), but subject to strict formal restrictions. First, this withdrawal is dogmatically possible only when establishing a sole proprietorship or general partnership; as shown, the founder of an AG or GmbH remains an employee, categorically barring them from advance withdrawal of funds for self-employment. Second, pension institutions require as a conditio sine qua non an official confirmation from SVA Graubünden that the person concerned is affiliated with the compensation fund as main-income self-employed.

The most critical aspect, however, is the absolute forfeiture period: The application for cash payout of pension capital must strictly be submitted to the pension fund or vested benefits foundation within 12 months after effectively taking up self-employment. If the founder misses this deadline—for instance because market launch was delayed or because the recognition process at SVA Graubünden dragged on due to requests for additional invoices or quotes—access to pension fund money for this purpose is irrevocably lost. Anyone wishing to cover themselves privately due to a lack of BVG affiliation can save up to 20 percent of their net annual earned income (in tax year 2026 up to a maximum of 36,288 francs) with tax advantages for retirement via Pillar 3a as a self-employed person without a pension fund.

In addition to these social security considerations, tax aspects must not be ignored: Daily unemployment allowances received from KIGA during the planning phase are also classified as taxable income under tax law, requiring recipients to build appropriate reserves for cantonal taxes and direct federal tax.

De-registration from RAV Domleschg and Legal Consequences After the Planning Phase

For job seekers residing in the municipalities of Domleschg, the Regional Employment Center (RAV) Thusis serves as the primary interface to unemployment insurance. The calendar progression of the approved planning phase of a maximum of 90 days marks a legally highly relevant turning point where a final, binding decision on the insured person's professional future must be made.

Immediately after expiration of the approved planning phase, but at the latest synchronously with drawing the last FSE daily allowance, the insured person is legally required to declare in writing to the Labor Market Measures department of KIGA Graubünden in Chur and the supervising employment advisor at RAV Thusis whether the project outlined in the business plan will be operationally implemented and full-time self-employment commenced or not. This moment demands a strictly binary decision. A hybrid continuation, where the person runs the potentially not fully matured FSE project on the side part-time, declares self-employment as interim earnings, and simultaneously continues claiming daily allowances from regular unemployment insurance, is categorically forbidden by the ordinance maker after drawing planning daily allowances.

Scenario A: Successful Launch of Self-Employment and the ALV Safety Net

If the founder decides to operationally implement their venture, official de-registration from public employment services takes place at RAV Thusis, ending status as a registered unemployed person. With this step, all labor market obligations cease, but so does the entitlement to regular monthly daily allowance payments.

To promote the economically desired willingness to assume startup risk and buffer the dramatic consequences of early business failure, AVIG implements a substantial legal protection mechanism at this point. For persons making the transition to self-employment after an ALV-supported planning phase, the regular two-year frame period for benefit draw is massively extended to four years (Art. 71d para. 2 AVIG).

Should the start-up prove unviable within this extended four-year window, this safety net allows the person to formally and definitively abandon self-employment and re-register as unemployed with their municipality of residence and RAV Thusis. In this case, they can draw on the remaining claim of their originally opened daily allowance account (subtracting the 90 FSE daily allowances already consumed), without needing to fulfill the requirement of a new 12-month contribution period generated from employment. This regulation effectively protects failed founders from immediate exhaustion of benefits and entering cantonal social assistance. The Federal Supreme Court confirmed in landmark rulings (such as BGE 133 V 133) that this four-year frame period extension to prevent unequal treatment applies not only to operators of sole proprietorships, but explicitly also to employer-like persons who founded a GmbH or AG and demonstrably liquidated it again.

Scenario B: Project Abort and Return to Control Obligations

If the applicant concludes at the end of the planning phase after thorough market testing that their project fails the test of economic reality or required financing cannot be raised, they must forgo taking up full-time self-employment. Legal consequences of this abort are strict and require immediate action.

First, the project promoted via FSE must be fully and definitively abandoned; continuing it as a hobby or reduced side activity while receiving ALV daily allowances is prohibited by law. Second, from the first day following the end of the planning phase, the person is again fully subject to the extensive control regulations of unemployment insurance. Suspension of duties is lifted; the insured person must immediately prove personal job search efforts to RAV Thusis in the form of qualified applications and is forced to accept any suitable salaried work immediately to mitigate damages.

The applicant's behavior during and at the end of the planning phase gains particular legal relevance. If the person aborts the planning phase due to their own fault, or if they forgo effective company foundation after fully drawing 90 daily allowances for purely subjective, self-inflicted reasons, AVIG provides sharp sanction mechanisms. According to Art. 30 para. 1 lit. g AVIG, the cantonal authority orders a suspension of benefit entitlement in such cases. This sanction deprives the unemployed person of daily allowances for a defined number of days, with the penalty proportioned to the degree of fault, but legally capped in this specific scenario at a maximum of 25 suspension days.

If subsequent audits by compensation funds or unemployment funds reveal that planning phase daily allowances were obtained under false pretenses—for instance if KIGA discovers the allegedly planned company was fully operational prior to FSE approval or an employment relationship effectively existed disguised as self-employment—the law mandates classifying funds drawn as unlawful benefit receipt. Pursuant to the Federal Act on General Aspects of Social Security Law (Art. 25 para. 1 ATSG), the Unemployment Fund must strictly demand repayment of these amounts.

Statute of limitation periods for these clawbacks are strict: The repayment claim generally lapses three years (relative period) after the fund gained knowledge of it, but at the latest five years after individual payout (absolute period). Federal Supreme Court jurisprudence further establishes that for repayments derived from criminal acts (such as fraud in application filing), the longer criminal statute of limitations applies; this longer period extends per BGE 147 V 417 also to heirs of the offending benefit recipient, as restitution debts are subject to universal inheritance succession and do not possess a purely personal penal character. Remission of repayment is possible only upon proven good faith and simultaneous presentation of great financial hardship, which is categorically excluded in cases of knowing deception of RAV advisors.

Conclusion

The RAV measure 'Promotion of Self-Employment' presents itself as a highly effective, economically sensible, yet administratively and legally demanding instrument of Swiss Unemployment Insurance. Approval of 90 planning daily allowances by the AMM department of KIGA Graubünden requires not only presenting an economically resilient and financially well-conceived draft project, but strictly presupposes complete exclusion of any causal self-inflicted fault regarding previous job resignation.

Prospective entrepreneurs from the catchment area of RAV Thusis must remain fully aware of the far-reaching social security implications of their choices. The legal tension between choice of legal form (sole proprietorship versus GmbH/AG) and recognition as self-employed by SVA Graubünden carries existential financial risks. These range from back-payments due to established pseudo-self-employment, to blocking ALV benefits for employer-like figures, to irreversible loss of pension fund claims by missing strict deadlines. Only those who properly de-register at the end of the 90-day planning phase and transition entrepreneurial activity correctly into the market will benefit from the four-year extension of the ALV frame period, serving as an essential state safety net should the leap into self-employment unexpectedly fail.