Updated: Aug 17, 2020
All of us have big goals. I am no exception. When I was in my early 20s my goal was to study at the world’s best university, to do a successful career at the world’s largest bank, to make a difference, to be spiritually advanced as much as possible to a human-being, take the best care of my body, health and mind... Among of all those goals I also planned to start global business operations from Switzerland.
Switzerland – a magnet country for a very high number of companies
There are about 580 000 companies registered across the Switzerland. The country hosts a high number of multinational companies such as Nestle, Glencore International, ABB, Novartis, SGS, Roche, LafargeHolcim and many others. It has one of the highest concentrations of Fortune 500 companies in the world – nearly two for every 1 million people (swissinfo.ch).
Recently we all heard about the social media giant’s cryptocurrency project “Libra Networks”. To pursue this project, Facebook incorporated the nonprofit Libra Association with 27 other partners to oversee Libra and its development in Switzerland. Although the clear reasons of Facebook’s decision to choose Switzerland are unknown, Switzerland is a hot spot for many other international / multinational companies. Among some reasons worth mentioning are the country’s perfect geographical location, a very stable political and legal system (incl. very strict laws and regulations regarding data protection and privacy), a technology friendly government, a high number of talented workforce and many others mentioned in this article below. However, the most attractive reason to incorporate your business in Switzerland is a low corporate tax rate (see the global comparison of max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital, prepared by KPMG Schweiz.
Blue color: 2019
Violet color: Change compared to 2018
However, some big companies can make an individual deal with cantons, which reduce the corporate tax to ca. 9-11% (“Heavenly as ever”, Economist).
In the article “Heavenly as ever” (Economist) it is stated that Switzerland will remain a low tax country for big corporates. The main reason for that is that the Federal Act on Tax Reform and AHV Financing (TRAF) were comfortably accepted by the Swiss public on the 19th of May 2019, choosing to stay a low tax domicile for big companies. Great news! In addition to that, Switzerland showed that it is ready to co-operate with EU and other countries, therefore will stay competitive globally.
Although these reduced tax rates for big corporates might still increase up to 12-14% (“Heavenly as ever”, Economist) after the recent referendum, Switzerland will still remain very attractive place to incorporate a business. Based on the new system, deductions on profit from patents and R&D expenses will be possible, so the companies involved in R&D operations will nicely benefit from it.
To remain attractive for companies, different Cantons across Switzerland are starting to reduce their corporate tax rates, e.g. Basel city, the French - speaking cantons of Vaud and Geneva.
Finally, the Value Added Tax (VAT) in Switzerland is the lowest in Europe: the standard rate is only 7.7% and reduced VAT is 2.5%.
Swiss canton Zug - Corporate tax heaven
It is important to note that each canton in Switzerland has different tax rates. However, corporate taxes in canton Zug (especially for life science companies) are one of the lowest in Europe and in Switzerland. Therefore, Zug is often is referred as “a corporate tax heaven”. It is also known globally as the “Hot-Spot” for multinational companies (such as Glencore International, Novartis, Roche, Johnson & Johnson Family of Companies and many others) as well as the “Crypto Valley” for hosting many globally known blockchain, cryptocurrency and technology start-ups such as Ethereum, Bitmain, Dfinity, Cardano and many others.
Canton Zug has been ranked as one of the best places to live in Switzerland many years in a row. And it is situated not far from bigger cities like Zurich (25 minutes by train) or Luzern (15 minutes by train) and Zurich International Airport (45 minutes by train).
Besides the low tax rates, there are additional benefits both to incorporate your business in Switzerland and move with your family to live here:
1. “Swiss brand” benefits
Everyone knows that globally Switzerland is a very well-respected country. Funny enough but if you drive a car with Swiss license plates, drivers in other European countries will treat you with a lot of respect. And even people living overseas will tell you that you are living in the most beautiful country in the world. What is more, due to Switzerland’s very high level of innovation, reliability and attraction of one of the best talents in the world, your company incorporated in Switzerland will benefit from so called “Swiss brand” when attracting potential clients.
2. The right place to meet potential business partners/clients and like-minded people
I have never seen so many meet-ups, sports/ different hobbies associations and clubs in any other country than in Switzerland. While being a member of these associations, you will not only enjoy your favorite hobby or sport but can meet your potential business partners/clients or like-minded people. If you are an owner of a classic car, an exotic car or a motorbike, just join the club of such vehicles and success to meet your potential clients is guaranteed. Sometimes you even do not need to become of member of these clubs. Just have a dinner with your family in the restaurant of a golf club and the chances to meet potential clients are very high.
Finally, if you are interested in a particular topic, e.g. artificial intelligence, start-ups, technology just go to meetup events.
3. One of the best health systems in the world
Although one pays a large part of health insurance coverage directly, according to your needs, there are different insurance options available which helps to reduce those costs. The Swiss healthcare system is considered one of the best in the world. Medical facilities are state-of-the-art and many hospitals look like luxurious hotels or modern art museums equipped with the latest medical technology as well as designer furniture.
4. A perfect place for your child’s development
Your children will enjoy the benefits of growing in a multilingual environment. Although there are 4 official languages (German, French, Italian and Retro-Romanian) in Switzerland, it does not mean that your children will learn all languages at once. In the kindergarten, besides their mother tongue, children quickly learn the local language (in the case of German part of Switzerland – Swiss German). Later, in a public-school, kids are exposed to the high-German as in the German part of Switzerland all subjects are taught in high German only. English, which is obligatory (and other foreign languages) are added to the curriculum too.
Very diversified education system:
According to your preferences, you could choose amongst International schools (subjects are taught in English), Swiss bilingual private school (taught both in English and German) or public school (taught in German). It is important to mention that unlike in other countries, in Switzerland international private schools are the best choice, if you consider spending only few years here. If you plan to live for a longer period, then the most popular choice would be – a public school.
As swimming training is obligatory at school in Switzerland, your child will learn to swim at a very early age. Due to close distance to mountains and popularity of winter sports your child can master his/her ski skills quite young.
5. It is hard to describe how beautiful and breath-taking Switzerland’s nature is
Everyone is aware of the picture-perfect beauty of the Swiss alps, lakes, fairy tale-like looking exotic waterfalls and forests. Each Swiss city is different and unique and many of them have a beautiful lake right close by.
6. Ideal climate and the best place for outdoor sports
The climate conditions in Switzerland are more than ideal: it is neither too hot in summer, nor too cold in winter. What is most important, that Switzerland has 4 seasons of the year: it is a perfect place for the outdoor sports’ fans. Someone told me that Switzerland is like one big open gym and I could not agree more just by adding that you will not find such beautiful gym anywhere in the world. If you are skydiving or paragliding enthusiast due to gorgeous sceneries, I cannot imagine better country than Switzerland to engage with this sport.
If you like a sun through entire year, you can choose to live above the clouds - just move to live in the towns or villages which are situated ca. above 800-1000 meters above sea level. In this case you will have more sunny days than your neighbors living down the hill.
7. Extremely fresh air and clean water
Both air and water quality are extremely high in Switzerland. You can even re-fill your water bottles or drink directly from the publicly available fountains. Although it is known that the water quality of the Swiss lakes is equal to drinking water quality, I would never drink the water straight out of the lake.
8. Perfect place for weekend trips to other countries
Depending where you live in Switzerland, you can reach Italy, France, Germany, Austria or Lichtenstein within 2-3 hours. Can you imagine having a breakfast in Switzerland, already after 2 hours you can have a walk in Lichtenstein, then enjoy a lunch in Austria and watch a sunset in Germany. All within the same day.
9. Perfect country for sailors/ speedboat fans and non-commercial airplane pilots
If you like sailing or are a fan of speedboat, Switzerland is a perfect country for you. According to Wikipedia, there are about 7000 different size lakes in Switzerland. So, if you want to take your partner to the romantic dinner by speedboat, move here. However, you should bear in mind that depending on where you live in Switzerland and on the boats size, the waiting period for getting a boat place in the harbor can be very long. Also, if you are piloting a non-commercial plane, you will be heavily impressed by the beauty of Swiss alps observed from the bird’s view.
Already after incorporating my first business in canton Zug back in 2012, I knew that my dream to start global operations from Switzerland came true. Make it happen as well! Contact us (ngbs.ch; email@example.com) and we will help you to elevate your business to incredibly successful levels!
Salvijus Naikauskas, Founder & CEO
Naikauskas Global Business Services was established in canton Zug (Switzerland) in 2012. Zug is globally known as a hotspot for multinational companies and “Crypto Valley”. Since then our company has been providing top-tier business consulting services to the companies abroad aiming to move their headquarters to Switzerland. One of our services include company incorporation and tax optimization support as well as helping to obtain all permits needed to settle down in Switzerland for our clients and their family members. We are continuously expanding and growing our operations and now we offer our tailor-made solutions to clients based all over the world.