When considering international business expansion, being able to think and act like a local, can prove to be a defining element for success. With 26 Cantons (or States) split into four official language areas (none of which is English), doing business in Switzerland can be challenging. Added to this, are cultural nuances, including 30% of the population being foreign nationals, and the term “Business as unusual” certainly rings true.
These are just some of the challenges companies considering Switzerland as a market of interest could encounter. Either when hiring remote workers based in Switzerland, or opening up a branch office in the country. In this post, we look at reasons why your company should consider Switzerland for international business expansion and why engaging a local in-market support partner can help navigate and speed up the process.
Why Switzerland?
There are several reasons why international companies could consider Switzerland as a market of interest:
- The innovation and technology that exists in Switzerland and encompassed by a liberal economic system, political stability, easy labour laws and close links with foreign markets. Switzerland also has a very competitive tax system.
- The location: Switzerland is situated at the heart of Europe and has excellent transport links both nationally and internationally. Major cities from the neighbouring countries, Germany, France, Italy, Austria and Liechtenstein are easily reachable.
- In the global economy, companies now recruit internationally and are willing to engage remote workers. This includes from Switzerland which has a high educational system with a large talent pool of skilled specialists who are looking for international roles that allow remote work.
- If your company is looking to establish an international base at the centre of Europe, then the location, flexibility and support offered in Switzerland, as well as the quality of living and infrastructure is difficult to beat. It is also a very accessible country, with direct flights from most major countries including the USA into Zurich.
- Professional Economic Development support from many regional and national organisations is available to companies enquiring about how to set up operations in Switzerland.
Business Parameters
Although Switzerland is often known for its rules and regulations that span all aspects of society, the flip side of this is that it also makes it a very efficient place to do business in.
- Operating licenses are typically required in all industry sectors. Although this process may seem complex to the newcomer, approval procedures are efficient and generally quick to attain.
- The challenge for the foreign company is to know how the systems and processes work and be able to navigate these accordingly, mostly in non-English language environments. Here the value of a local support partner can be invaluable and this continues to other areas that need to be addressed.
- The list of items to consider when setting up an operation in Switzerland includes (but not limited to):
- Licenses required.
- Location > canton > town > work space. All of which can affect the amount of tax a company or employee pays.
- Contact with relevant associations for information, guidelines and support. Knowing where to go and who to speak to
- GAV (Union) rules by sector – key when employing staff.
- Permits – including operating and work permits. These are strictly controlled in Switzerland and require expert guidance to navigate.
- Visa’s are required for non-EU /EFTA countries and local expertise can support this process.
- Financial, license and governmental reporting. Mostly in one of the official languages and will generally require local expertise and support.
- Hiring Personnel
- Contractor or Employee? Both are possible. Explanation of how these work for the company and the contractor, the cost, rules and guidelines can be detailed and costly if not working with the right partner.
- Employment contracts > payroll > reporting > financial auditing. All require local expertise.
- AD ons such as accommodation support, setting up bank accounts, transport are just some of the questions people being hired may have.
Industry Sectors
In 2023, the Swiss hotel sector recorded well over 40 million overnight stays (41.8 million), a new record This was an increase of 9.2% (+3.5 million) compared with 2022. That said, tourism only accounts for around 5% of total Swiss GDP. Making up the total GDP, there are several very successful industry sectors:
Engineering
A longstanding tradition of excellence and artisanship in engineering and watchmaking now enhanced with aviation, drones, robotics and sensors.
Life Sciences
Switzerland’s central European location, combined with the consolidation of the entire value chain, attracts international biotechnology firms and Switzerland is home to 20 percent of European Life Science companies.
Digital
At the forefront of deep tech innovation, including robotics, quantum computing, AI, VR/AR and computer vision.
DeepTech
Switzerland is at the forefront of deep tech innovation, including AI, Blockchain, Quantum computing and Web3
Finance
Switzerland is one of the world’s leading financial centres, renowned for stability and data security. Now home also to fintech and crypto
Food
There are reportedly over 40’000 NGO’s operating from Switzerland. Food Industry giants such as Nestle, and Syngenta also have their HQs in Switzerland.
Start-ups
Switzerland is in the top 5 European countries with regards to venture capital raised in 2023, with US$2.3B raised. this represents a significant 36% growth since 2019. Switzerland also has numerous organisations and associations dedicated to the start-up scene. In addition the top ranked universities, the ETH in Zurich and the EPFL in Lausanne are also heavily invested in incubating and supporting start ups.
Economic Development Support Organisations
Federal and regional economic development organisations are highly organised and very helpful for companies looking to invest in Switzerland.
Engaging Staff
Hiring Remote Workers
For the non-Switzerland based company, there are different scenarios to hiring remote workers. These include:
- the company can hire the worker directly as an employee through an engagement model known as ANobAG. This is only permitted when the company is based outside of Switzerland.
- the company can hire the worker as a contractor through a so called “Employer of Record”. The foreign based company simply agrees terms and rates with the skilled worker based in Switzerland and then works with a local EOR company which manages the local employment contract, payroll etc. Much like an outsourced HR position.
Permanent Hires
- The company with a base in Switzerland, can recruit skilled specialists from Switzerland or EU/EFTA countries relatively easily working with national and international recruitment agents.
- The EOR contract can also be used when the company has an established base in Switzerland and wants to hire a contractor for a specific project or time period.
Recommendations
For companies planning international expansion or simply looking to hire skilled candidates to work remotely, Switzerland is great source market. High levels of education and sector specialisation, mean that a rich pool of talent, and excellent commercial opportunities are plentiful. To hit the ground running, the value of working with knowledgeable and experienced local partners should not be underestimated.
No matter what level of service is required, companies looking to engage workers in Switzerland should consider the value of working with a local professional employment organisation (PEO) for know-how and expertise. This, not only throughout the entire hiring and on-boarding process but also as a support for additional services – including industry sector advice, market research, worker payroll management, financial reporting and taxes. In addition, a local PEO should be able to offer other support services such as company set up, search for office space, and more – either directly themselves or via their local established business network.
Accurity is a SECO licensed employment services company with over 25 years’ experience in supporting companies of all sizes, from multi national corporations to SME’s and start-ups. We are Swiss owned with local know-how and expertise. We advise on remote work, EOR, ANobAG, contractor payroll management as well as company outsourced payroll management. Please feel free to contact our team to find out more about the services we can offer your company, contract or permanent staff , and see how we can help you. We make Switzerland easy for you!
Michael is a celebrated strategic Marketing and Business development expert with decades of experience and achievements under his belt. He has extensive commercial knowledge in the relocation and travel industry and has specialised in highly individual customer facing services.
As a Swiss national Michael has a broad experience of Switzerland.
