Most entrepreneurs who want to open a company in Switzerland are attracted by the fact that this country has a stable economy, it offers exceptional financial services and, last but not least, the fact that the tax system is very favorable for companies that choose Switzerland as the location for their main offices. But, before you take the first steps to open a company in Switzerland, there are a few facts you should know and that can help you make the right decision, especially regarding Switzerland’s competitive economy.
- Switzerland has one of the highest GDPs per capita in the world
In 2015, Switzerland had the second highest GDP (Gross Domestic Product) per capita in the world. The GDP per capita stood at 77,943 CHF. The famous Swiss banking system and the special tax system are two of the great advantages of Switzerland. At the same time, Switzerland has a stable, prosperous and highly technological economy. In addition, the three most important cities in the country are consistently ranked among the top European cities with the highest quality of life, being also among the preferred locations to establish a company in Switzerland.
- Highly developed service sector
The financial sector is not the only one attracting entrepreneurs and investors from all over the world, but also the service sector has been constantly increasing over the last years. Statistics show that the service sector is accountable for approximately 74% of Switzerland’s GDP. On the opposite end of the spectrum, the agricultural sector accounts for less than 1%.
- The EU is Switzerland’s main trading partner
Those interested in opening a company in Switzerland should know that they also have easy access to other European markets through Switzerland’s excellent commercial agreements. In fact, the European Union is Switzerland’s main trading partner, as 43% of Swiss exports are destined for EU member states and 78% of imports are coming from the EU.
- Most Swiss businesses are SMEs
Switzerland has proven to provide the perfect environment for small-and-medium-sized enterprises, as they form the majority of the companies registered in Switzerland – no less than 99%. This is just another reason to consider opening a company in Switzerland. Small-and-medium-sized enterprises are defined as companies that have less than 250 employees.
- The public debt has been constantly decreasing
Considering the public debt to GDP ratio, Switzerland’s public debt has fallen considerably over the last decades, from more than 54% in 1998 to approximately 34% in 2014. This may be one of the factors that contributed to the development of a relaxed taxation which helps all types of business structures, from start-ups, multinationals and corporations to avoid double taxation through several double taxation avoidance agreements.
- Switzerland has the lowest VAT rate in Europe
Among the low taxes levied in Switzerland, the value added tax rate is situated at only 8% making it one of the lowest in Europe and even in the world. In addition, certain goods and services benefit from even lower VAT rates, such as accommodation services that have a VAT rate of 3.8% and everyday items and basic necessities that have a VAT rate of only 2.5%. The VAT rate can certainly provide a significant advantage for any company in Switzerland.
- Highly developed R&D sector
Swiss authorities are very supportive of research and development activities. Almost 3% of Switzerland’s GDP is spent each year on the R&D sector, with most of the funds provided by the private sector. Furthermore, a company in Switzerland can benefit from important tax deductions and exemptions through its research and development activities.
Regardless which type of business structure you would like to use, make sure acquire the support of specialists to establish a company in Switzerland, to benefit from all the advantages this country has to offer.