The article concerns the question – Why Setting Up A Business In Switzerland Makes Sense. The economy and business environment in Switzerland has undergone a significant change over the years with many foreign companies setting up an offshore incorporation in the country. Several international firms like Cadbury, Nissan, Cisco Systems and more, have opened of operations in the Lake Geneva region. Many of these moves are designed to retain tax benefits since the country has tax treaties with the U.S. and a few other countries, giving companies the guarantee of receiving the same tax advantages.
Various regions in Switzerland have seen the development of specific types of industries. While Basel has a significant number of chemical, biotech, and pharmaceutical companies, Zurich is home to the financial services sector. With most companies going global, Switzerland has become the ideal choice as the headquarters for European operations.
Even U.S. agricultural giant Archer Daniels Midlands ADM, have commenced operations in the town of Rolle along with Nissan International SA. Nyon, Morges, and the Geneva-Montreux region have seen an influx of companies and new offshore incorporation startups in recent years. Switzerland offers great a quality of life to expat workers who also find having to commute less a big advantage. The country also offers excellent educational opportunities with a number of internationals schools having established themselves in the region.
Cantonal governments grant total or partial tax relief for newly established companies for up to a maximum of ten years. In addition, the State Secretariat for Economic Affairs may grant new establishments tax relief on Direct Federal Tax, which is offered to employees. Tax on profits and capital vary from one canton to another.
The federal government as well as most cantons allow deductions on losses carried forward, reserve funds dedicated to research and restructuring, depreciation, and on paid taxes as well. Capital tax is calculated on the basis of proportional tariffs and ranges up to 0.9%, depending on the canton. This tax does not apply at the federal level.
Switzerland applies its basic constitutional rights to foreigners as well. Foreigners have the freedom to set up a business in Switzerland in the same way as Swiss nationals. They are also allowed to purchase equity in a company, set up a branch and operate a business as long as they hold a valid residence and work permit, or have acquired permanent residence status. Any foreigner without a residence permit may employ Swiss nationals to operate their business.
Currently, Switzerland encourages foreign investments in all business sectors. It is not mandatory for a Swiss national to hold a stake in the equity. Some professionals require a special license or permit in certain cantons. These include banks, insurance companies, investment brokers, hotels and restaurants, physicians, dentists, attorneys, pharmacists, and wine merchants, among others. All foreign nations with requisite work permits are eligible to conduct any of these businesses.
Procedures for application of a work and residence permit vary according to the country of origin. While there may be several factors like location, proximity to market, real estate prices, competition, and more, that may affect your business plan, you can be sure of reaping the benefits once you establish your business in Switzerland.