Doing business in Switzerland and the Greater Zurich Area. 21st October 2014 Rolf Bühler Director Europe

Transcription

1 Doing business in Switzerland and the Greater Zurich Area 21st October 2014 Rolf Bühler Director Europe

2 Proximity to main markets PAGE 2

3 Fly anywhere in Europe in one to two hours 41,285 km 2 Switzerland: 7.5 times smaller than Poland Berne / Zurich Political / Economic capital 8 million inhabitants 700 million consumers reachable in one day 500 km 750 km 4 national languages German, French, Italian, Romansh 1000 km PAGE 3

4 Hotspot for education, research and development

5 Switzerland: Country of research and development Expenditure on R & D 2012 (public & private) CHF 18.5 billion Expenditure on R & D as % of GDP 2012 Switzerland : 3.1% EU-28: 2% Switzerland has the highest developed knowledge transfer worldwide between companies and universities. (IMD 2013) Switzerland has the highest number of Nobel Price Laureates per capita and is ranked Number 1 in the Global Innovation Index PAGE 5

6 Two thirds of R&D by private sector Switzerland invests 3% of GDP in R&D. Private Economy (11Mrd.) 9% Cantons (1.4 Mrd.) 15% Federal State (2.4 Mrd.)* 8% 68% Foreign Investors, Universities, private Organizations (1.5 Mrd.) PAGE 6

7 A hotspot for innovation Swiss Federal Institute of Technology: ETH Zurich ( the MIT of Europe ) is the No.1 University in Continental Europe 1 Other renowned R&D facilities: Universities e.g. Zurich, Geneva, St. Gallen 20 Universities of Applied Sciences Artificial Intelligence Lab IBM Zurich Research Lab Disney Research Lab Google Research EMPA (Material research) Paul Scherrer Institute (PSI) 29 International schools Source: 1. Times Higher Education World University Ranking 2013 (worldwide rank 12. ) 2. Bundesamt für Statistik (Universitäten, technische Hochschulen, Fachhochschulen, pädagogische Hochschule) PAGE 7

8 Liberal Labour Market PAGE 8

9 Flexible labour law for flexible talent pool Switzerland is a non-litigative society Vocational training, i.e. apprentices work in companies AND follow industry-specific education 3 months notice period No requirement of authorities consent for lay-offs No severance fees PAGE 9

10 Crazy employees? PAGE 10

11 Bright minds are welcome Free access to Swiss labour market by most EU and all EFTA citizens Work/residence permit for non-eu citizens: only for specialists in promising projects Sector-specific licenses/permits for banking, recruitment, medical professions PAGE 11

12 YOU MAY THINK: SWITZERLAND IS EXPENSIVE

13 Employer's social contribution costs Employer in% in CHF in CHF Gross salary Social Security Unemployment insurance Accident insurance Pension fund Sickness insurance Social deductions Child/family allowance Employer contribution Total staff cost PAGE 13

14 Employee's net income Employee in% in CHF in CHF Gross salary Social Security Unemployment insurance Accident insurance Pension fund Sickness insurance Social deductions Child/family allowance 400 Net salary PAGE 14

15 Gross salary for highly qualified individuals to grant a disposable income of EUR 100'000 ¹ Canton / Country 2 Gross wage in EUR Effective tax rate After-tax income in EUR Zug 123, ,000 Schwyz 123, ,000 Glarus 127, ,000 Zurich 128, ,000 Graubünden 130, ,000 Poland 131,800, ,000 Germany 139, ,000 Austria 139, ,000 Luxembourg 139, ,000 Netherland 144, ,000 Spain 145, ,000 France 145, ,000 Denmark 146, ,000 United Kingdom 146, ,000 Ireland 149, ,000 Italy 153,700, ,000 Belgium 156,400, ,000 1) Source: BAK Taxation Index for Highly Qualified Individuals ) Cantonal (Swiss locations) or commercial capital of a country (international locations) PAGE 15

16 Zurich expensive for consumer goods Zurich Frankfurt + 39% Liter + 32% Domestic Beer in Restaurant, 0.5 liter + 33% Cappuccino + 28% Kg Tomatos PAGE 16

17 .but inexpensive for utility costs Zurich Frankfurt - 60% Electricity, heating, water, waste disposal for 85m2 Apartment - 4% litre gasoline - 22% Public Transport Monthly Pass (Regular Price) - 48% 1.92 % 2.83 % Mortgage interest Rate in %, yearly PAGE 17

18 Overview: setting up a business in Switzerland Public limited company (AG) Limited Liability Company (GmbH) Minimum capital: CHF 100,000 CHF 20,000 Shareholders: Anonymous, e.g. bearer shares Partners registered, less discretion Assembly: General Assembly Partners meeting Credibility: Possibly higher Possibly lower Auditing: Mandatory/Opting out Mandatory/Opting out Initial costs: Approx. CHF 5000 Approx. CHF 5000 Running costs: Probably higher, e.g. CHF Probably lower, e.g. CHF 8000 PAGE 18

19 Setting up a Swiss AG or GmbH Find a name (check availability on Hire a lawyer/consultant/fiduciary («Treuhänder») Pay in minimum capital CHF 100,000 or 20,000 Provide necessary documents: articles, share holder/partner contracts, parent company certificates Appoint one person (director/manager) with single signature rights to represent company as a Swiss resident Follow lawyer s instructions, pay CHF PAGE 19

20 Business operating costs (Estimation: based on office space of approx. 50m2, for 2-3 employees) Monthly office rental fee CHF 2'000 Social insurance contribution costs: +17% of gross annual salary IT expenses, electricity, heating (per person / month) Telecommunication (per month) External payroll & auditing services CHF (per month) Example: Sales Manager Switzerland Annual Salary: CHF 100'000 Social costs CHF 17'000 Miscellanous CHF 6'000 Payroll/Auditing CHF 6' Total Annual CHF 129'000.- PAGE 20

21 Greater Zurich Area: Where Corporate and Personal Taxes are Attractive

22 The Swiss Tax Advantage at a Glance Federal Level Federal corporate income tax: Effective tax rate (ETR) of 7.83% (flat tax) Cantonal / Municipal Level Largest tax burden is on a Cantonal level, which results in fierce tax competition among the Cantons Combined ETR (Federal, Cantonal, Municipal) vary from 13% to 23% Switzerland has an easy and transparent fiscal process, no red tape! PAGE 22

23 Greater Zurich Area tax rates among country's lowest PAGE 23

24 Value Added Tax (VAT) For foreign companies making taxable supplies in Switzerland, there may be a statutory obligation to register for VAT. This includes the ongoing compliance requirements to file periodic tax returns and pay over any VAT due to the Swiss tax office. Typical situations requiring a Swiss VAT registration include: Where goods are delivered within Switzerland; If the foreign trader imports, installs or assembles goods in Switzerland; Export of goods from Switzerland; Supplies of services, where the place of supply is determined as being in Switzerland e.g. land & property related services Standard Swiss VAT Rate = 8% (compared with 17-27% in the EU) Source: TMF Group, March 2012 PAGE 24

25 Tax Burden on Highly Qualified Manpower* Czech Republic Greater Zurich Area** Poland Slovenia Germany Luxembourg Norway United Kingdom 46 Ireland 49 Belgium Source: BAK Basel, 2013 *Effective tax rate on gross wages to achieve an after-tax income of EUR 100,000 (2010 price basis) in the cantonal (Swiss locations) or commercial capital of a country (international locations). In %. Average exchange rate from 2009 to 2012 of the national currency to the euro as the basis. **Greater Zurich Area: average rates of the Cantons of Glarus, Schaffhausen, Schwyz, Zug and Zurich PAGE 25

26 GZA Testimonial «Zurich is a perfect location to establish a development center that attracts top-class talents from around the globe. After nine years in Seattle, I was happy to get the chance to work in the center of Europe. Many staff members feel the same in no time, we have recruited 30 people from more than 15 different nationalities.» Michael Trommsdorff, former Head Product Development, Microsoft Development Center Zurich PAGE 26

27 GZA testimonial «Advantages are easy immigration and low taxes on labor cost. We are very picky and want to find the best. Compared with Europe as a whole, all national labor markets are rather small. But in Switzerland, people already speak three languages, and many foreigners work here.» Urs Hölzle, Senior Vice President, Technical Infrastructure, and Google Fellow PAGE 27

28 Greater Zurich Area AG: Who We Are

29 Greater Zurich Area AG (GZA): The Organization Since 1999 active location marketing and promotion in key markets for the Greater Zurich Area Widely supported by politics and economy in terms of a Private-Public-Partnership 16 employees at the locations Zurich, United States (East- and West coast) and China (Shanghai and Beijing) In the year 2014 the Greater Zurich Area AG has means of CHF 4 m for its international operations PAGE 29

30 Greater Zurich Area AG: a public-private-partnership of 7 cantons and 17 companies PUBLIC PRIVATE (1/3 of the funding) Canton of Glarus Canton of Grisons Canton of Schaffhausen Canton of Schwyz Canton of Solothurn Canton of Zug Canton of Zurich City of Zurich Region of Winterthur * As of July, 2014 PAGE 30

31 Our Free Services We advise international companies using Switzerland as a base for Europe and worldwide. We are integrated in numerous networks thanks to our public-private structure. Together with our regional partners business promotion agencies and providers in industry, science, education and tourism we provide expert service. We provide answers regarding: Incorporation Tax environment Real estate Work permits Technology clusters Funding & financing Among others PAGE 31

32 Greater Zurich Area AG: We are here for you! U S A E U R O P E C H I N A PAGE 32

33 Greater Zurich Area: Where Else?