As far as growth strategies go, mergers and acquisitions (M&A) are a popular way for companies to expand into new markets. There are several advantages for the acquiring company when discussing an M&A. These include gaining “up-and-running” access to a new market, which could perhaps mean acquiring new technologies, skills and experience – potentially leading to a competitive advantage.
The two main reasons behind an M&A for the acquiring company are, financial and / or strategic. In a business expansion scenario, this would typically be for strategic reasons.
For the company expanding to a new market:
- An M&A is considered a good way to attain intellectual property, licences and skilled staff.
- It is also a fast-track way to get to know the market without having a painful learning curve.
- It could also be a good way to introduce an existing product line into a new market using established channels, distribution chains and in-house expertise.
- Finally, a strategic acquisition could be used to create cost and revenue synergies including tax advantages.
In terms of business expansion, Switzerland is an attractive market for international companies to establish a base in. The central European location, favourable tax laws, highly educated workforce and favourable worker engagement conditions and high quality service standards are just some of the reasons why company take-overs and M&A activity is on the rise in Switzerland.
In fact, according to recent reports, 647 M&A agreements with Swiss participation were recorded in 2022. This represents a 7% increase versus 2021 although the total deal value was less by around 18%. Some of the main industry sectors recording M&A activity in Switzerland include ICT and Pharmaceuticals as well as Life sciences.
In addition to mergers and acquisitions, international business expansion can be launched in a much easier, and more agile way. Switzerland can be an interesting and sophisticated business hub, with opportunities for licensing and incorporating also valuable options.
In fact, there are several possibilities open to the international company looking to expand their offer into Switzerland (and beyond), without having to first establish an own own branch here as part of an M&A.
- For example, engaging a skilled worker (via a professional employment services company) to represent your products and services in the Swiss market is a simple way to start and reduces risk and cost.
- Your company selects and agrees terms with the candidate and then signs an agreement with an employment service company which acts as the local “employer of record” for your worker.
- That way your company has a presence in the Swiss market at a low cost, effort and minimal risk. The employment services company acts as your outsourced HR & payroll team, as well as local contact.
- As business progresses, your team can also be expanded through the same employment services partner. When timing dictates, an own branch can be established if desired.
- Some of the advantages gained through an M&A such as acquiring local expertise and knowledge can also be tapped into by both engaging a local worker, as well as via the employment services partner.
- Other business services required, can also genrally be facilitated via an on the ground partner.
Switzerland is a politically and economically stable country in which to establish a European base and expand business growth. Risk of recession remains low for Switzerland and in terms of inflation, the Swiss National Bank (SNB) forecasts a rate of 2.4% for 2023, compared to 2.9% in 2022. This compared to the EU average of around 10%.
We are SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs, contractors and recruitment agents. Our core services include Employer of Record or EOR and ANobAG for contractors and international and domestic clients wishing to engage contractors. Our pricing system is fair and transparent. We are based in Switzerland and have excellent local knowledge and connections. Contact our team for a non-binding consultation on email@example.com to see how we can help you.