Switzerland- USA: Sunny or Sandy? Boston, November 29, 2012 www.amcham.ch
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USA - Switzerland November 2012 3
The Mouse and the Elefant November 2012 4
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Top Performing Nations The World Competitiveness Scoreboard, IMD, May 2012 The Global Competitiveness Report, WEF, Sept. 2011 EIU Innovation Index EIU, 2011 November 2012 8
Interlocking Swiss and US Economies America is important for Switzerland: USA are the 2nd most important export market (behind Germany); USA is the most important foreign direct investor in Switzerland by far! Switzerland is important for the USA: 5th largest foreign direct investor, the largest in 2010 Small, but fast growing export market Important management platform for US multinationals November 2012 9
USA is key export market for Switzerland Germany 39'854 % of Total 20.2% Italy 15'633 7.9% France 14'377 7.3% United Kingdom Austria Spain 8'250 5'983 5'772 4.2% 3.0% 2.9% 60.6% Netherlands 5'125 2.6% Belgium / Luxembourg 3'984 2.0% Rest Europe 20'750 10.5% USA 19'947 10.1% 10.1% China 8'439 4.3% Japan 6'399 3.2% Hong Kong Africa Russia 6'294 3'251 3'009 3.2% 1.6% 1.5% BRIC 8.4% India 2'935 1.5% Brasil Figures: Total Export 2011 (Mio. CHF) Source: Swiss Federal Customs Administration 2'226 1.1% November 2012 10
An export boom to the USA Jan-Oct 2012 Country CH Exports CH Imports USA +12.6% +17.6% Germany +1.6% -6.8% France +0.9% -3.7% Italy -7.9% -6.8% EU -0.3% -3.7% China -12.4% +72.3% Source: Swiss Federal Customs Administration November 2012 11
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Massive Growth of Foreign Direct Investments 240 220 225.0 200 189.4 180 160 151.5 164.5 156.9 140 134.6 148.2 120 100 80 102.0 94.7 132.1 60 2006 2007 2008r 2009r 2010p Total Swiss direct investment in the U.S. Total U.S. direct investment in Switzerland Source: U.S. Department of Commerce, Bureau of Economic Analysis November 2012 13
Switzerland is among «the big guys» Others Cumulated FDI in USA Lux France CH Germany November 2012 14
.and look who is innovative! Others ($10.1bn) R&D spent in USA 2009 CH ($9.1bn) France ($5.0bn) Germany (5.5bn) UK ($6.6bn) November 2012 15
Massive direct investments by Swiss companies in the USA 2008-2011 November 2012 16
And who is paying the taxe$? US Income Taxes paid 2009 November 2012 17
Swiss jobs are as good as Chocolate! Swiss companies provide 430 600 jobs 6th most behind UK, Jap, D, F and Can Swiss jobs have the highest average salaries $95 200! 178 000 jobs are in manufacturing 41% of all jobs provided November 2012 18
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Growth anyone? In 2009, Swiss companies Added 41 000 jobs in the USA Exported goods for $10.6bn Netted an income of $8.7bn Paid US income tax of $3.6bn Added jobs in 35 states, with large gains in Nevada, Pennsylvania, Delaware, Massachussetts and Colorado November 2012 20
All this provided by «real» Companies» Swiss affiliates contributing to report: Agribusiness: Syngenta Financial and Insurance: Swiss Re, UBS, Zurich Insurance Group Flavors and fragrances: Givaudan Food: Nestlé Manufacturing and Electronics: ABB, Buhler, Conzzeta, Holcim, Kaba, Kudelski, Schaffner, Schindler, Tetra Pak, WICOR Pharma and Medicine: Novartis, Roche (Genentech) Swiss Post November 2012 21
Switzerland remains the most competitive economy Global Competitiveness Index: Top 15 countries 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1. Finland 1. Finland 1. Finland 1. Finland 1. Switzerland 1. US 1. US 1. Switzerland 1. Switzerland 1. Switzerland 2. US 2. US 2. US 2. US 2. Finland 2. Switzerland 2. Switzerland 2. US 2. Sweden 2. Singapore 3. Canada 3. Sweden 3. Sweden 3. Sweden 3. Sweden 3. Denmark 3. Denmark 3. Singapore 3. Singapore 3. Sweden 4. Singapore 4. Denmark 4. Taiwan 4. Denmark 4. Denmark 4. Sweden 4. Sweden 4. Sweden 4. US 4. Finland 5. Australia 5. Taiwan 5. Denmark 5. Taiwan 5. Singapore 5. Germany 5. Singapore 5. Denmark 5. Germany 5. US 6. Norway 6. Singapore 6. Norway 6. Singapore 6. US 6. Finland 6. Finland 6. Finland 6. Japan 6. Germany 7. Taiwan 7. Switzerland 7. Singapore 7. Iceland 7. Japan 7. Singapore 7. Germany 7. Germany 7. Finland 7. Netherland 8. Netherlan 8. Iceland 8. Switzerland 8. Switzerland 8. Germany 8. Japan 8. Netherland 8. Japan 8. Netherland 8. Denmark 9. Sweden 9. Norway 9. Japan 9. Norway 9. Norway 9. UK 9. Japan 9. Canada 9. Denmark 9. Japan 10. NZ 10. Australia 10. Iceland 10. Australia 10. Australia 10. Netherland 10. Canada 10. Netherland 10. Canada 10. UK 11. Ireland 11. Japan 11. UK 11. Netherland 11. Japan 11. Korea 11. HK 11. HK 11. HK 11. HK 12. UK 12. Netherland 12. Netherland 12. Japan 12. Netherland 12. HK 12. UK 12. Taiwan 12. UK 12. Canada 13. HK 13. Germany 13. Germany 13. UK 13. Germany 13. Canada 13. Korea 13. UK 13. Taiwan 13. Taiwan 14. Denmark 14. NZ 14. Australia 14. Canada 14. NZ 14. Taiwan 14. Austria 14. Norway 14. Norway 14. Belgium 15. Switzerland 15. UK 15. Canada 15. Germany 15. UK 15. Austria 15. Norway 15. Australia 15. France 15. Norway Source: World Economic Forum Global Competitiveness Report November 2012 22
Switzerland is #1 High education standards Great quality of life Political stability Central location in Europe Flexible labor laws Acceptable corporate taxes Multicultural society Leading-edge research Low capital cost Low unemployment Low government debt November 2012 23
Switzerland s Secret is finally revealed. Source: New England Journal of Medicine November 2012 24
USA-CH OR November 2012 25
Schweiz currently in conflict with top 5 business partners Country Legacy of Banking Secrecy Cantonal tax regimes Other Germany Airport Zürich; Industrial espionage USA France Industrial espionage Italy Black listed UK November 2012 26
Switerland and the USA: the Odd Couple USA Global taxation Tax evasion is a crime Special judicial process Data protection quite liberal Automatic delivery of information: Banks and employers Switzerland Territorial taxation Tax evasion is an misdemeanor Special judicial process Data protection very strict No automatic delivery of information: Banks and employers November 2012 27
«Extraterritorial application» of US Law: Basis of CH-USA conflicts USA When doing business in the USA: US rules! Otherwise you do whatever you like. CH The US market is vital for our business Why should that be our problem? Thus, we are obliged to apply US laws: This is extraterritorial application of US Law! November 2012 28
Vexing results for Swiss in the US and US Persons in Switzerland Many banks massively curtail service to US Persons Wealth management >CHF 500k available with SEC licensed companies Most banks have stopped service to US Persons for all banking services This is vexing and insulting, but no lever for banks to offer services November 2012 29
The Perfect Storm? USA related Behavior-based grid search (USA) ACTA DTA on Estate Tax DoJ/IRS procedure against 11 CH banks Global solution regarding US tax compliance FATCA Visa Waiver Program: PCSC, HSPD6 DTA II 0% WHT/ LOB 10% of exports, ca. 40% of FDI EU related Behavior-based grid search (OECD) Tax Compliance (D and UK) Tax Compliance (rest of EU) Corporate tax fight with EU 65% of exports ca. 40% of FDI = probably needs Parliamentary action in the next 12-18 months November 2012 30
Switzerland USA: lots of potential! Relationship with great potential Infrastruture Clean Tech, Green Tech, Sustainability, Energy efficiency Transportation, public transport Precision Engineering And much more! But the legacy issues must be solved! November 2012 31
US Elections 2012: What consequences for Switzerland? November 2012 32
US Elections 2012: What consequences for Switzerland? No change! Continued economic win-win cooperation Continued dialog on solving fiscal issues in partnership (changing partners) Continued partnership on broad scope of issues Hopefully more positive tone and media coverage November 2012 33
Time to talk November 2012 34
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