Investment climate in Switzerland

The Swiss economy is, according to the ratings made by international specialized institutions, among the most competitive, innovative and liberal. The main features that give Switzerland a privileged business environment, tailored to high- quality products and services are the excellent level of security offered by business law, long-term stability of the investment framework, full guarantee of property rights, fair competition, and banking secrecy. Also competitive tax system, light-touch regulation and strong links with foreign markets make Switzerland one of the most appropriate business center to open a company.

According to the Global Competitiveness Report published by the World Economic Forum, Switzerland continued to be, from 2017 to 2018 and in the last six years, the first in the world (in an international ranking that includes 144 countries), displacing USA (2nd place).

Key industries in Switzerland

Top sectors include banking and finance, medical and security equipment, the pharmaceutical industry, information technology, telecommunications, travel and tourism, and many others. Most workers operate in the tertiary sector and in small and medium-sized enterprises.

Banks and financial institutions are one of the pillars of the Swiss economy. The Swiss franc is one of the most stable currency. Also, the capital market is one of the most important in the world and Swiss banking institutes are among the world's leading banks.

In addition to the banking sector, the insurance business is also one of the most attractive sectors. Swiss citizens allocate for insurances a significant part of their budget, about 21%, which is a rate higher than in many other countries. However, Swiss insurance companies make more than half of their income abroad. Switzerland is the main European exporter of insurance. Also, reinsurance is an important part of this activity, with 90% of reinsurance contracts being outsourced.

The pharmaceutical industry currently ranks first in the chemical industry. The number of employees in the sector is over 67,000 people. The pharmaceutical industry has managed to keep the leading position of Swiss exports. The most important export market for pharmaceuticals remains Europe (over 50%). With technology institutes and research centers in the pharmaceutical industry, Switzerland benefits from excellent conditions for the development of these areas.

Investing in Switzerland

The legal framework in the economic field is ensured by Constitution which enshrines fundamental rights such as property rights, the right to pursue gainful activities, freedom of trade market, and determines how competencies are shared between the Federal Council, cantonal and municipal administrations.

There are many investment opportunities for foreign entrepreneurs in Switzerland, where basic constitutional rights apply equally. Those who have the right of residence and temporary work permit in Switzerland may establish a company under the same conditions as Swiss citizens. Also, they have the right to set up a branch and develop economic activities on the Swiss market.

For carrying out business activities in certain areas such as banking, insurance, pharmacy or commercial activities, there are specific regulations established at the federal or cantonal level. Therefore, a license or special permit is required. Additional information regarding permits and licenses can be obtained from our swiss consultants.

Swiss trade access  

Except for agricultural products and several groups of sensitive products, trade between Switzerland and the EU and EFTA states is free. In addition, Switzerland can also negotiate free trade agreements with countries like China, Japan and the Faroe Islands without the involvement of EFTA. These agreements ensure efficient trade and strong business links with important partners from other countries, designed to minimize barriers for the Swiss economy regarding international markets.

Although Switzerland is not in the EU, the bilateral agreements are for many Swiss companies more important than the local market, because there is a free trade agreement also in the services sector and the transfer of capital.

In the following period, Swiss exports are expected to benefit from world economic growth trends as well as from the favorable effects of the Swiss franc depreciation. Sustainable growth is expected especially in the tourism, electronics or metallurgy industries.

These areas are expected to play an important role in the Swiss economy, alongside the already traditional sectors for the country's economic expansion (the banking, medical and pharmaceutical industries).

Further growth in domestic demand for products and services is expected, which will also support the positive evolution of the Swiss economy over the next two years. This is due to the fact that Switzerland offers a stable social environment and relatively low taxation, with less bureaucratic legislation.

If you plan to invest in the Swiss market, you have to know that there are several types of companies that can be incorporated in this country. Our Swiss consultants in company formation can offer you the best solutions related to your investment.

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