Foreign Direct Investment in Switzerland
FDI in Figures
Switzerland is an attractive destination for foreign investors because of its economic and political stability, its transparent and fair legal system, its reliable and extensive infrastructures, and its efficient capital markets. Moreover, many tax incentives are offered by cantons (states), in order to attract companies to establish operations and invest in their jurisdictions. Some cantons go as far as to waive taxes for new firms for a period that can go up to ten years. The major laws governing foreign investment in Switzerland are the Swiss Code of Obligations, the Lex Friedrich/Koller, the Securities Law, and the Cartel Law. There is no screening of foreign investment, neither are there any sector or geographical preferences. The country experienced a marked increase in terms of FDI in-flow in recent years. However, because of the impact of the financial crisis, foreign investment decreased significantly in 2008 and since then has been recovering slowly.
Country Comparison For the Protection of Investors
|Foreign Direct Investment||2007||2008||2009|
|FDI Inward Flow (million USD)||51,681||5,085||9,695|
|FDI Stock (million USD)||383,214||439,148||463,799|
|Performance Index*, Ranking on 141 Economies||19||121||81|
|Potential Index**, Ranking on 141 Economies||21||19||-|
|Number of Greenfield Investments***||158||173||135|
|FDI Inwards (in % of GFCF****)||55.3||4.8||26.3|
|FDI Stock (in % of GDP)||88.3||87.8||94.2|
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
Why You Should Choose to Invest in Switzerland
- Strong Points
- Switzerland is strategically placed. The country is an open gateway to European, African and Middle-Eastern markets. Switzerland offers world-class infrastructures, as well as a business-friendly legal and regulatory environment. The Swiss market is a good testing ground for the introduction of new high technology and high-end products. Switzerland has a highly skilled and educated workforce, which is reliable and relatively flexible. Switzerland has the highest per capita IT spending in the world and is also one of the world’s most advanced countries in research and development. It presents excellent bio and nano technology partnership opportunities. The Swiss common private equities are the highest in Europe.
- Weak Points
- The Swiss market is very competitive. Switzerland is an epicenter of European and global competition. Companies face tough European Union regulations and standards, related to product quality and packaging. Moreover, there are unique Swiss requirements for medications, cosmetics, detergents and chemical products, which need to be met.
- Government Measures to Motivate or Restrict FDI
- The Swiss government welcomes foreign direct investment and is not hampered by any kind of barrier. The federal government allows all the 26 cantons (states) to set their own foreign investment attraction policies. Many cantons offer foreign investors tax exemptions and other tax incentives. For example some cantons offer ten years of tax exemption to new firms. Furthermore, there is no surveillance nor screening done on foreign investments except in certain sectors like telecommunications where certain levels of performance are required in order to qualify for tax reductions. For companies working in the banking and insurance fields, government authorisation is required in order to invest in the country.
- Bilateral Investment Conventions Signed By Switzerland
- Switzerland has signed many investment protection treaties, out of which 112 are in force. UNCTAD allows you to visualize the list of conventions signed by Switzerland.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Acquisition of Holdings
Acquiring a majority stake of a local company is legal in Switzerland.
- Obligation to Declare
- No such declarations are required. However, in order to prevent the misuse of its very liberal market framework, the Swiss government has introduced Due Diligence Guidelines in the banking industry under which banks must identify the beneficial owner of the invested funds. The government has also instructed Swiss banks to abandon anonymous numbered bank accounts, keep banking records ten years after the closing of an account, and to refrain from actively assisting customers to evade tax.
- Competent Organization For the Declaration
Federal Department of Finance
Federal Banking Commission (EBK)
Swiss National Bank
- Requests For Specific Authorizations
- Companies working in sectors like banking and insurance need to seek government permission to invest directly in the country.
- Investment Aid Agency
Swiss Foreign Investment Agency
- Tenders, Projects and Public Procurement
SVME, Swiss Procurement Forum
Tenders Info, Tenders in Switzerland
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide
- Other Useful Resources
Federal Department of Economic Affairs (FDEA)
Federal Commercial Registry Office
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