Switzerland - Gateway to Europe

Switzerland as a business location

Sitting between the Alps and Jura mountain ranges, in the heart of Europe, Switzerland is a geographically small (roughly 41,300 square kilometres), but economically powerful and internationally highly connected country. 

Switzerland draws its economic strength and competitiveness from a number of factors, including a stable, well-functioning political system, an excellent education system (both academic and vocational training), an open and liberal economic environment, stable and reliable legal institutions, excellent and reliable infrastructure, and a high degree of pragmatism and efficiency, to mention but a few. Even with Switzerland’s openness, Swiss people maintain a strong sense of independence and sovereignty: A very high degree of direct democratic decisions are being made by the people on a regular basis, and despite strong and good economic relationships with the European Union, Switzerland is not a EU member country and maintains its own currency.

Switzerland as an investment location for Japanese companies

Despite their geographic distance, Japan and Switzerland have maintained strong relationships over many years and have become mutually important and reliable trade partners, with around 160 years of bilateral relations. Both countries rank in the top ten most important investors for the other, underlining the strength and importance of their economic relations.

Switzerland has one of the highest per-capita GDP in the world and boasts one of the highest life satisfactions (significantly above the OECD life satisfaction index average). Also, in another similarity to Japan, Switzerland has one of the highest life expectancies in the world–meaning that Switzerland and Japan are facing similar challenges and opportunities from an overall ageing society.

Switzerland’s mature and diversified economy has grown moderately but constantly over the past years and decades. Even during major events such as the recent global COVID-19 crisis, the Swiss economy has shown its stability and recovered very quickly after a moderate impact in 2020. Also, despite continuing global developments and uncertainties, inflation and unemployment rates are projected to remain at very low levels. 

Switzerland is one of the leading innovative countries in several industries, including pharma and life science and fintech as well as high-precision industries such as the machine and watch industry. Many family-owned high-tech businesses are among the world’s hidden champions in their very specific markets and are looking for meaningful international collaboration partners. Switzerland is also home to globally renowned universities, first and foremost the ETH in Zurich and the EPFL in Lausanne, around which strong clusters of IT startups as well as regional headquarters of multinational industry leaders have formed.

In the area of taxes, Switzerland boasts the lowest added value tax in Europe at 7.7%, as well as very moderate corporate and individual income taxes. Also in light of current international tax developments related to the BEPS 2.0 initiative, taxation in Switzerland will remain highly competitive - not only because of tax rates, but also because of the efficient and cooperative procedures with the Swiss tax authorities, including the possibility to obtain advance tax rulings to clarify tax consequences already prior to implementation. 

All of these aspects make Switzerland one of the most attractive economic and tax environments in the world. We at PwC Switzerland are here to help you chart your course through the unique and tight-knit Swiss business and regulatory environment.