Straightforward Business Environment with Investment Appeal

Jacques de Watteville, Swiss Ambassador to the EU
Jacques de Watteville, Swiss Ambassador to the EU

Doing business in Switzerland is getting easier every day, especially for EU and international companies. The increasing use of the euro in Swiss business; cheap and easy travel, communications and Internet connections throughout Switzerland and between Switzerland and the EU and other markets; reliable energy supplies; and firm, predictable rules, often adapted to EU norms, have created a straightforward business environment in Switzerland.

Opportunities in a wide range of sectors

In addition, Switzerland offers opportunities in a wide range of sectors. Particularly successful business activities include financial services, pharmaceuticals and biotechnology, research and development, and luxury goods (including watch-making and precision engineering). Adding to its attractions, Switzerland – despite a relatively small population – has one of the world’s highest GDPs per capita and therefore an impressive purchasing power, making the country a top market for high quality goods.

To maintain Switzerland’s strong business activities, the government encourages investment in research and development as well as in start ups and small and medium- sized enterprises. The government is also working hard to keep Switzerland globally competitive; the country was ranked number two in the world in competitiveness (after the US) in 2008 by the World Economic Forum’s Global Competitiveness Report.

While maintaining its tradition of neutrality, Switzerland in recent years has been steadily strengthening its ties to the EU, thus adding to its investment appeal. Switzerland signed a landmark trade liberalisation agreement with the EU in 2002 and a second set of agreements in 2004 which came into force in 2005. One result of such trade agreements is that Switzerland is now the UK’s second biggest non EU export market after the US. Main exports from the UK to Switzerland include chemicals and pharmaceuticals,
metal and semi-finished metal products, food and drink, vehicles, office equipment, and telecommunications and sound recording equipment.

Swiss ambassador to EU calls for long-term vision

Jacques de Watteville, Swiss Ambassador to the EU, points out that while the EU Commission and the government of Switzerland have sometimes been at odds over taxation issues, “Switzerland is holding a good hand of cards. The EU recognises that our agreement on taxation on savings and the pay-as-you-earn system is working well. Switzerland returned almost €349.2 million to EU member states in 2008.” He adds, “The independent independent reform of the taxation of businesses that Switzerland envisages should contribute to maintaining a competitive and attractive economic area. We must be realistic and anticipat the developments to come. We must have a long-term vision.”

Concerning bilateral trade agreements with the EU, Jacques de Watteville explains, “For the Union, if Switzerland wants to participate in certain sectors of the internal market, it must respect the rules, and therefore resume the application of current and future EU law. It is also in Switzerland’s interests to have unified rules. Otherwise, it will not have full access to the internal market. The challenge is to find mechanisms that allow us to achieve this goal while respecting the sovereignty and healthy functioning of Swiss institutions. We have to find a balance. For Switzerland, respecting our sovereignty and institutions is crucial, as it is elsewhere and also within the EU.”

Attractions for investors

Switzerland’s traditional strengths are advantageous to investors. Switzerland has no controls on exchange, inward investment, the repatriation of profits or capital on disinvestment, other than applicable taxes. In addition, the Swiss franc is fully backed and is one of the world’s strongest currencies; it appreciated 300% against the US dollar between 1974 and 2008, a factor which continues to encourage international investors to locate their assets in Switzerland.

The Swiss authorities have a “laissez- faire” attitude towards investment, but the government does support infrastructural investment (tourist facilities, communications and training facilities) with subsidised loans up to 25% of a financing package. There are also a few traditional, mainly rural, industries in which the government offers even more financial support.

The Swiss authorities have a “laissez-faire” attitude towards investment, but the government does support infrastructural investment (tourist facilities, communications and training facilities) with subsidised loans up to 25% of a financing package. There are also a few traditional, mainly rural, industries in which the government offers even more financial support.

Investment support at cantonal level

At the cantonal level, a wide variety of investment supports is available. The cantons frequently compete vigorously to secure attractive projects, and the terms of incoming investment are negotiable in many cases. The types of support available include assistance or subsidies with land or premises, waiving of work permit requirements, tax holidays of up to 10 years, cheap energy and training subsidies. Some cantons have designated industrial zones which provide some or all of these privileges.

Although most cantons are open to foreign investment in principle, some in particular are more open than others. Freiburg, Grisons, Luzern, Schwyz, Unterwalden, Uri, Valais and Vaud, all of which are predominantly agricultural areas, are thought to be particularly keen on attracting inward investment.

Anywhere in Switzerland, companies can count on highly skilled, multilingual human resources, high quality of life, and exceptional business support services.