Switzerland Economic Situation

Unique Geo-Strategic Location and Top Business Environment

 

Switzerland’s geo-strategic position and a well-defined federal structure make the country a meeting point of cultures and languages. At the crossroads of the European technology axes and cultures, Switzerland is also equidistant between America and Asia.

Long-term, stable decision-making fundamentals, liberal legislation, protection of free competition and cooperative authorities encourage the establishment of headquarters and facilities for research and production activities.

Switzerland’s liberal economic system simplifies location decisions. Internationally recognized institutes consistently give the country top rankings for legal security, long-term stability, guaranteed protection of free competition and property ownership and minimal bureaucracy. These fundamental criteria position Switzerland as an advantageous European location for establishing a business. 

Switzerland’s signing of a treaty of association under Schengen/Dublin means that the Swiss borders no longer represent an external frontier as far as the EU is concerned. The Schengen agreements abolished controls of persons at the internal frontiers of the EU, thus permitting the free movement of persons between EU member states.

A common “Schengen visa” for visits of up to three months is valid throughout Europe. Swiss tourism will benefit from this: Tourists requiring visas travelling from growth markets such as China, India or Russia thus no longer require a second visa for Switzerland when travelling to Europe.

As Switzerland is not a member of the EU customs union, controls of goods will continue to be carried out as before.

 

International Ties

Swiss companies have traditionally sought and cultivated their key markets abroad in order to expand on a relatively small domestic market. Because of this relationship with other countries, Switzerland has become an important player in world trade.

For Swiss companies active in international trade, Europe is by far the most important market. Four-fifths of all imported goods and almost two-thirds of all exported goods are traded with the EU. Germany has traditionally been the most important trading partner with Switzerland, ahead of the neighboring countries of France and Italy.

From a worldwide viewpoint, it is amazing that Switzerland, with about 0.01% of the global population, ranks among the top 20 in exports. But, this statistic is also an indicator of the possibilities that are available to export-oriented companies. In the export of services, Switzerland ranks among the top 12 worldwide.

 

Stability

With a per capita gross domestic product ranking the forth highest worldwide, Switzerland is a prominent player in the world economy.

Purchase power stability achieved through traditionally low inflation, low long-term capital costs, a good investment climate, sound public finances and almost no labor strikes guarantee the prosperity and stability of the Swiss economy.

The strength of the Swiss economy is largely due to its strong intertwining with the economies of other countries.

Switzerland has one of the highest export rates as a percentage of gross domestic product. Highly specialized and flexible small and medium-sized companies characterize the technologically advanced industrial sector.


 

Investment Climate

 

Favorable Conditions Prevail for Foreign Direct Investment in Switzerland

Switzerland continues to be one of the most attractive locations for foreign direct investment. Independent studies, published by worldwide renowned institutions, give the country consistently high marks on the criteria most important to decision-makers when selecting a business site.

The country offers many advantages and benefits for business investors. Osec and our investment representatives work directly with companies to develop customized and attractive business structures.

Some of the most compelling evidence of Switzerland’s advantages is in the companies who have decided to set up business operations here. Today, more than 6,500 foreign companies are active in Switzerland or are engaged in business activities abroad and nearly 90% of them would again decide upon Switzerland as their business location.

 

Prosperity and Stability


Switzerland has the third highest per capita gross domestic product worldwide or, when adjusted at purchase power parity, the eight highest. The high level of motivation of the employees, the strong link between its industry and trade with foreign countries, and the achievements of the services industry are the keys to these economic results.

The nominal gross domestic product of USD 48,000 per capita is higher than the EU average - and 47% higher than in Germany and 33% higher than in Austria. The value added per employee in Switzerland is the second highest in the world.

Almost 70% of the gross domestic product is produced by the services sector and financial institutions in particular contribute to this through their awarding of loans, property funding and asset management. However, the manufacturing industry remains an important pillar of the national economy. In the high-growth services sector, information technology and telecommunications, the Swiss economy benefits from continuing market liberalization. Within these key industries, basic chemicals, pharmaceuticals, machine tools and certain electronics sectors represent outstanding growth areas.

Switzerland has always been a stable country. The inflation rate in recent years has continually remained below 1% and is, therefore, clearly lower than in the EU and US. Interest rates in Switzerland have remained low because of the high savings rate and large inflows of foreign money.

 

Information from Osec Uptated 2008

 

 

Switzerland Liberal Economic System

 

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