The choice of location for a business has become extremely important in today’s competitive economy. Switzerland offers many unique advantages for entrepreneurs willing to invest in the country, on an economic, political and social level. Here are the most important reasons why you should consider investing in Switzerland, a small, yet highly developed country.
1. Switzerland has a strategic location
Switzerland is located in the Western Europe region, offering the best environment for logistical operations and other important business activities. Due to its central location, Switzerland benefits from the proximity to economically strong countries such as Germany, Italy and France. Because of this, Switzerland is a great starting point for businesses that want to enter the European market. Switzerland is also suitable as a test market for new products or services before making the decision of conquering the rest of Europe.
The largest trading partner of Switzerland is the European Union. Approximately 80% of Swiss imports come from the EU and about 60% of its exports go to various EU countries. Although it’s not a member of the EU, Switzerland is a member of the European Free Trade Association and has several bilateral agreements in place with the EU. More than any other country, to be more precise. Because of all these agreements, most barriers to market access have been removed, including the free movement of persons. Cross–border transactions regarding industrial goods originated from the EU are exempt from customs duties and other charges.
Asides from its strategic location, Switzerland also has access to the European market without facing the regulatory disadvantages of the EU space.
2. Highly skilled workforce
Public and private Swiss schools enjoy an excellent reputation throughout the world. The educational structure of Switzerland reflects cultural and lingual diversity. Swiss schools teach in the three national languages: German, French and Italian, but English has also become an unofficial fourth language. This is due to the fact that many Anglo – Saxon companies were integrated into the local business environment. Because of these abilities, Switzerland is well – known for a workforce with excellent language skills.
Asides from the great educational system, Swiss–based companies have created many internships and training programs, which in turn ensure them well – qualified and experienced employees. As the available workforce is highly educated and diverse, companies have one of the best resources to manage their businesses successfully.
3. Highly developed industries
Despite being a small country, Switzerland is known for certain industry sectors that are very well developed, such as banking and insurance, with Zurich and Geneva being world financial centers. Switzerland is also one of the most important commodities trading platforms, especially for the oil trade in the free market.
Not only the finance sector is strong, but also the pharmaceutical sector, chemical industries and life sciences. Switzerland’s reputation in research and development has attracted many foreign companies from the engineering and medical technology sector.
More than 6,500 foreign companies have their headquarters in Switzerland, including US companies present in Forbes’ ranking of the most successful companies in the world. The main criteria for choosing Switzerland as a location for company headquarters is the country’s economical neutrality.
4. Switzerland is a center of innovation
Having such a large number of industry clusters, it’s no wonder that Switzerland is constantly filing for a considerable number of patents, created due to its productivity in creating intellectual property. Swiss universities and research institutes produce highly – qualified experts and have outstanding results in the research field.
All these innovations and patents are protected by strict legislation regarding intellectual property. Almost 3% of Switzerland’s GDP is spent on R&D activities, much higher than any other European country.
5. Excellent infrastructure
The high standard of living, quality of life and safe business environment make Switzerland a very attractive location for foreign investors. The country has a good healthcare system, an efficient public transport system and close proximity to some of the most beautiful scenery in the world, which attracts many professionals and their families willing to work and live in Switzerland.
The reliability and punctuality of the public transport system make it possible for any individual to get around in the country very easy, using the extensive road network.
The Swiss healthcare system and telecommunications are among the best in the world, which ensure the quality of life that many entrepreneurs seek to establish their residence or their business location.
6. Concern for the environment
Switzerland pays attention to natural resources, probably due to the fact that the country is covered in forests, lakes mountains. In addition, the need to import most natural resources has led to a greater concern regarding the environment’s importance. It comes as no surprise that Switzerland focuses on making use of natural resources in an eco–friendly manner.
The diversified energy supply makes Switzerland less dependent on fossil fuels and even the water that supplies all the water pipes in the country is fresh and pure, being similar to mineral water.
Recycling plays an important part in preserving the environment, with more than 70% of recyclable items being recycled. Both the private and public sectors of the industry invest in programs meant to preserve the environment.
7. Transparency in business
Swiss cantons often compete with each other in order to attract more investors. The immediate consequence is that all cantons provide business–friendly environments, mainly through the legal structure and special tax regimes. Switzerland offers the necessary platform to host small and medium–sized businesses, with more than 90% of the Swiss companies having less than 250 employees.
Setting up a company in Switzerland is a relatively fast and easy procedure. The legal system makes it easy to incorporate in Switzerland, usually in less than two weeks. It is also possible to purchase real estate for business purposes without having special permits.
Tax incentives are offered by most Swiss cantons to businesses that create new jobs and bring benefits to the local economy. The federal government also provides various tax incentives for certain foreign companies.
Starting with 2007, work and residence permits are granted to EU citizens, although third–country citizens may work in Switzerland under a strict quota system.
8. Competitive tax rates
The general misconception is that Switzerland is a tax haven, but in fact, the country has more than 70 double tax treaties in place, which makes it easier for companies and entrepreneurs to benefit from lower tax rates. Taxes are levied on the federal, cantonal and municipal level and they are some of the lowest in the European region, both for companies and individuals.
Cantons and communes still have significant autonomy in setting tax rates and deductions, except for those imposed by the federal government. Companies are subject to tax rates that range between 12% and 25%, but dividends and capital gains from shareholdings are entitled to participation relief, which means that taxes are practically eliminated on such gains.
Tax planning is essential in order to benefit from all the advantages offered by the Swiss taxation system; however, the tax authorities maintain a good relationship with companies, offering their support.
9. Stable political environment
Switzerland is known for its neutrality in political relationships with other countries, but the strength of its political system comes from the local government. All Swiss cantons have their own legislatures and governments, as well as flexible political entities, which allows them to compete with each other in various fields.
10. Financial stability
Switzerland’s financial stability has been maintained mainly by having a strong purchase power, due to low inflation, a strong currency and solid public finances. All these factors make Switzerland a good climate for investments, offering economic prosperity and stability. Swiss banks focus on having a strong capital base in order to make them more resilient to the financial crisis.
Considering all these factors, Switzerland is one of the best locations in Europe and in the entire world to start a business, to expand business operations on the European market or to make investments.