Companies wanting to expand internationally, should look at Switzerland as a potential location for their growth strategies. This statement is supported in part, by the fact that Switzerland has ranked “most innovative country in the world” for over 12 years in a row. *
But what else makes Switzerland suitable for international business expansion? Three key strengths are:
- The capacity for innovation measured by its talent, number of start ups and patents registered.
- A highly educated workforce, with excellent education facilities and top universities.
- First-class scientific research institutions some of which are aligned to the top universities.
Key areas that make Switzerland an attractive location
1. Stable & Thriving Economy
- Switzerland regularly scores top notes with international business analysts such as Bloomberg and is regarded by experts as being one of the leading economies in the world.
- Worldwide gross domestic product in 2021 stood at around US$ 12,230 per capita. In comparison – GDP in Switzerland reached US$ 91,992 per capita. This ranks 3rd in Europe and 9th worldwide.
- The inflation rate year over year to date in 2022, was 2.9%.In the 27 EU countries inflation for the same period lies at 10.6%
2. Tax Regulations
Business leaders looking to expand their business in Switzerland (or anywhere else), will obviously need to research and understand tax and other legal regulations. Some interesting points regarding tax regulations in Switzerland:
- The Swiss Government usually prefers to use the Double Taxation Agreement (DTA) with country partners.
- Out of all the nations in Europe, Switzerland has the lowest value-added tax rate in all of Europe and the regular value-added tax (VAT) is 7.7% (EU Average 21%).
- Goods and services associated with medical care are totally exempted from tax.
Also worth noting is that Switzerland is not a fully fledged member of the EU and after a Swiss referendum held in 1992 rejected EEA membership, the Swiss government decided to suspend negotiations for EU membership until further notice. This means that business decision making in Switzerland is not tied directly to EU regulations. And this offers some degree of regulatory flexibility and agility versus being based in an EU country.
3. Network Infrastructure
Switzerland has excellent network connectivity. The Swiss railway network is very efficient and Switzerland also has a well-connected airway network making logistics easy and for Switzerland as a prime location for expanding internationally.
4. Business Entity Types & Engagement Models
Swiss legislation provides flexibility to business owners and offers the choice of different business entity types based on the available number of shareholders and the initial capital.
In addition to the different structures and business entities, there are other models to get “boots on the ground” quickly for your company – without actually having to set up your own company structure. These include:
- Engaging a worker locally in Switzerland via a SECO licensed employment services company. This enables your company to hire and engage a skilled worker in Switzerland without your company having to set up a Swiss branch.
- Your company retains daily management and control of the worker, while the employment services company handles local HR issues and payroll management.
- Work with a consulting company that offers multiple services locally in addition to HR support. This could be in areas such as Sales & Marketing, CRM and M&A advice.
5. Standard Of Living
Switzerland offers a high standard of living and this is an advantage for businesses setting up here as it affects the consumption rate and is seen as being beneficial for businesses – making the Swiss market attractive in itself.
The stable Swiss economy means that the Swiss franc is also a strong and stable currency making it attractive to both domestic and international investors. The currency is referred to as a safe haven currency due to its stability measured over longer periods.
7. Business-Friendly Ecosystem
Switzerland offers pro-business governmental reforms and incentives that allow startups and businesses to grow without unnecessary hinderence. The Swiss government treats companies and potential investors like customers – with advisors readily available to guide investors through the investment process.
If your company is looking to expand internationally, Switzerland is a great location to start. It has many advantages some of which we have listed here. And as highlighted, setting up a company in Switzerland may not be necessary. A first step could be to hire skilled workers locally working with an employment services company. Once the business has gained traction, then opening a branch office in Switzerland may make more sense.
Accurity is 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. We also work with cross border workers living in France and working in Switzerland 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 to see how we can help you.
- This according to the WIPO global innovation Index. The Secretariat of WIPO assumes no liability or responsibility with regard to the transformation or translation of the original content.