Swiss investigators said they saw no evidence that the man, whom one official described as "disturbed" and was likely among the dead, had intended to commit any kind of terror attack.
Police said the bus became engulfed in flames on Tuesday evening on a road in Kerzers, a town of about 5000 inhabitants in the western canton of Fribourg, about 20km from the Swiss capital Bern.
"As for the motive, there is absolutely no evidence to suggest that this could be a terrorist act," said Raphael Bourquin, attorney general of the canton of Fribourg.
A criminal investigation has been opened into homicide, arson and endangering the lives of others, Bourquin said.
The victims were aged between 17 and 65, the authorities said.
The suspect, a man of Swiss origin who has not been identified, is believed to have boarded the bus with bags before dousing himself in flammable material, officials said.
He was understood to be in his 60s and had been reported missing by his family, they added.
Investigators were going through CCTV footage as well as social media posts to understand the man's motives, and further searches and interviews would take place, officials said.
Three injured people were taken to hospital, police said.
Passengers were seen escaping from the burning bus, panicked and injured.
Video after the flames were extinguished showed the charred remains of the yellow vehicle.
Zeynel Teke, 61, was working at his food stall opposite when flames erupted from the bus and it stopped in front of him.
Two or three people came out of the vehicle and he ran to help, using his hand to put out flames on one woman.
He went to get his fire extinguisher but the flames were too hot to get close enough to douse them.
"It's so sad to see people burning in front of your eyes. It could be my child, it could be yours," he said.
Mina Gendre was about to close up the shop she works in when she saw the bus, which had stopped unexpectedly across the road, had a fire inside.
"It was so shocking," said Gendre.
"I saw someone come running out of the bus on fire."
Gendre shut the door of the shop to protect it as bystanders helped put out the fire on the person with a jacket, she said.
Vanessa Liuzzi, 37, another local resident who left flowers at the scene, said the story doing the rounds was that someone had set fire to themself.
"I'm shocked, I'm sad, I'm in despair," she said.
Nirosan Vickneswaran, 37, was waiting anxiously for news of his cousin who was on the bus.
"We don't know if he's injured or worse," he said.
"All we know is that somebody set fire to themself."
A memorial was being erected in the village square.
The head of the bus company Postauto, Stefan Regli, said it was a terrible tragedy and extended his condolences.
Swiss President Guy Parmelin offered condolences and said the incident was being investigated.
"It shocks and saddens me that once again people have lost their lives in a serious fire in Switzerland," he said on X.
In January, Switzerland was rocked by a fire in a bar in the Swiss ski resort of Crans-Montana that killed 41 people and injured 115.
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