Switzerland

ESSENTIAL FACTS

LOCATION: 47 00 N, 8 00

POPULATION: 7,554,661

CURRENCY: Swiss franc (CHF)

LANGUAGE: German (official), French (official), Italian (official), Romansch (official)

CLIMATE: The Alps play a large role in the climate of Switzerland, although for the most part it is a temperate climate.

EDUCATION: 99 percent of Swiss over age 15 can read and write.

PUBLIC HOLIDAYS: Founding of the Swiss Confederation, 1 August (1291)

HISTORY AND GOVERNMENT

HISTORY
The Swiss Confederation, as is its formal name, became independent from the Holy Roman Empire in 1499. It has since come to represent the very definition of neutrality, with worldwide acknowledgement of its position both in Europe and in the international political community.

POLITICAL SYSTEM
Switzerland’s political system is similar in structure to a federal republic. There is a freely-elected President, a Vice President and the Federal Council is the formal chief of state and head of government - Bundesrat (in German), Conseil Federal (in French), Consiglio Federale (in Italian). The legislative branch is presided over by the Federal Assembly or Bundesversammlung (in German), Assemblee Federale (in French), Assemblea Federale (in Italian) and consists of the Council of States or Standerat (in German), Conseil des Etats (in French), Consiglio degli Stati (in Italian).

JUDICIAL SYSTEM
Customary law influences the Swiss civil law system. The Federal Supreme Court reviews most legislation.

COMMERCE AND TRADE

COMMERCIAL ACTIVITY
Agriculture: Grains, fruits, vegetables; meat, eggs
Industry: Machinery, chemicals, watches, textiles, precision instruments, tourism, banking, and insurance

TRADE PRACTICES
Exports: Machinery, chemicals, metals, watches, agricultural products to Germany, US, Italy, France and UK
Imports: Machinery, chemicals, vehicles, metals; agricultural products, textiles from Germany, Italy, France, US, Netherlands and Austria

BANKING, FINANCE AND INVESTMENT

FINANCIAL FACTS
Switzerland is known the world over as one of the most stable economies in history. Although it still uses the Swiss Franc, Switzerland has been keenly aware of the economic changes around it as the EU grows in economic power, and has made some changes to its own structure so as to maintain its relevance. Unemployment is extremely low as Switzerland continues to attract upscale industry to employ its highly skilled workforce.

Fiscal year: Calendar year

BANKING
The Federal Banking Commission (FBC) of Switzerland, in accordance with federal statutes, regulates the nation's banking industry.

STOCK MARKET
Market value of publicly traded shares: $938.6 billion (2005)

MEMBERSHIPS
DB (nonregional members), AfDB, Australia Group, BIS, CE, CERN, EAPC, EBRD, EFTA, ESA, FAO, G-10, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IEA, IFAD, IFC, IFRCS, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, LAIA (observer), MIGA, NAM (guest), NEA, NSG, OAS (observer), OECD, OIF, OPCW, OSCE, Paris Club, PCA, PFP, UN, UNCTAD, UNESCO, UNHCR, UNIDO, UNITAR, UNOMIG, UNRWA, UNTSO, UNWTO, UPU, WCL, WCO, WHO, WIPO, WMO, WTO, ZC

REAL ESTATE
Whether or not you can purchase real estate depends on what kind of residency permit you hold. You do not have to stay in Switzerland in order to keep the property. However, there is an annual quota by canton that determines how many properties can be bought by foreigners.

IMMIGRATION

EMPLOYMENT
A Class B permit is for work durations of any length. Eventually, this can be bumped up to a Class C permit (after 10 years), which is a permanent residency permit. Class Ci permits are for family members of non-Swiss national B permit holders who want to look for work as well. Class L permits are for those who have specific time-sensitive project-based work in Switzerland, and is for one day less than a year for EU citizens and four months for all others.

RESIDENCE
The “settlement” permit is granted to those who have held a Class B permit for 10 years (US citizens, five years). It allows you the same freedoms as Swiss nationals, minus the right to vote.

BUSINESS

BUSINESS ENTITIES
The two main types of company formations are the AG/SA (Aktiengesellschaft; Société Anonyme), which is similar to a stock corporation, and a GmbH/Sarl (Gesellschaft mit beschränkter Haftung; Société à responsabilité limitée), which operates the same as a limited liability company (LLC). Within that framework, you can chose between a service company, which must show a 5 percent profit margin before tax breaks are applied; a principal company, which can deduct all foreign transactions from their taxable income; a holding company, which can have only one-third of their profits not being held in order to take advantage of up to 95 percent tax-exemption; a domicile company, which cannot have any offices or employees in Switzerland; and a mixed company, which must earn 80 percent of its income outside Swiss borders.

TAXATION

PERSONAL TAXATION
Swiss taxes are levied at the federal, cantonal and local levels. They are divided into indirect - VAT (LINK), withholding taxes (LINK), and stamp duties (LINK) - and direct, which include corporate (LINK) and individual income taxes (LINK) paid to federal, cantonal and municipal tax authorities. Indirect taxes, as well as foreign taxes not already exempt per Double Taxation Treaties (DTT), are deductible.

CORPORATE TAXATION
While corporate tax rates depend on the canton of incorporation, type of business, deductibles and other factors, in general the corporate tax rate is as low as 6.5 percent and as high as 31 percent; however, some cantons offer tax-exemption for foreign businesses.

DOUBLE TAXATION
Double tax treaties are in effect with Australia, Austria, Belgium, Bulgaria, Canada, China, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Italy, Ivory Coast, Jamaica, Japan, Korean, Luxembourg, Malaysia, Mexico, Morocco, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Rumania, Russia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Trinidad and Tobago, the UK and the U.S.