Most global companies that are leaders in their respective fields choose to manage and practice their intellectual property rights from Switzerland. Why? Because there are many reasons to choose Switzerland as a location, regardless if it’s a large enterprise or a small company looking to make profit from patents, software or other type of intellectual property.
Tax benefits for Swiss holding companies
The number one reason to choose Switzerland is that holding companies based in Switzerland are able to license intellectual property to a parent company or to other members of a group for royalties. Royalties are taxed at local, more convenient rates in
Switzerland. In Switzerland, the federal income tax has a fixed rate of less than 8%. Most taxes paid by resident companies are set by each Swiss canton at communal level.
As Swiss federal taxes are low, cantons have the liberty to negotiate the taxes paid by companies or individuals, which can be very convenient for foreign companies looking to find the best location for their headquarters. The local tax rates can sometimes go for as little as 2%. Under certain circumstances, Swiss federal taxes can be reduced, according to the legislation in order, coming up to less than 10% in some cases.
Intellectual property can benefit a group of firms
If a parent company creates a Swiss holding company for the purpose of holding intellectual property rights and other assets for the benefit of other subsidiaries, the said intellectual property is exempt from legal claims filed by clients and business partners of the operating companies who are members of the group.
Placing the intellectual property rights of a group into a common Swiss holding company, the shares of the respective company are pledged for the benefit of investors and banks. Without having this mechanism, each company must pledge its own intellectual property rights individually, which takes a lot of time and resources. Especially when dealing with a large portfolio, this process is not only time consuming, but it is also costly. The holding structure allows the parent company to focus its efforts on raising capital for acquisitions or expansions.
Business - friendly legislation
Some of the best arbitrary laws of the world are located in Switzerland. This state provides a solid legal system designed to protect intellectual property rights. Furthermore, the Swiss civil codes places the rights of items created or developed by employees into the hands of the employer, even without a signed assignment of the intellectual property rights. This provision reduces disputes over ownership that might otherwise occur, especially when employees decide to leave a company in order to work for a competitor.
Safety of confidential information
Collecting of evidence in Switzerland, without the participation and consent of Swiss officials is considered a violation and may even lead to criminal sanctions imposed to the party or parties seeking to make a certain discovery.
Discovery requests made by foreign litigants is granted only for a limited number of documents, if the documents are translated in any of the official languages in Switzerland and if the respective documents are in direct connection with the facts of the proceedings.
Swiss intellectual property law
Switzerland is a member of most intellectual property treaties including the Berne Convention, the Paris Convention and the Patent Cooperation Treaty. By having adhered to these treaties, Swiss legal entities have the right to register intellectual property rights in various jurisdictions, using a centralize registration system.
Furthermore, Switzerland does not have a national security provision in its intellectual property laws, which allows residents to decide where in the world they decide to file patent applications first, and not necessarily in Switzerland.
Other advantages of managing intellectual property rights from Switzerland include the fact that the World Intellectual Property Organization is located in the country, or its proximity to the European Patent Office.
Switzerland also offers important tax incentives for R&D activities as well as other tax advantages for foreign entrepreneurs and legal entities willing to invest in the country.