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Switzerland Incorporation and Investment Tips for Foreigners

Switzerland is an attractive destination for most foreign investors
Alex Hamilton is a regular contributor to numerous news sites.
Alex Hamilton is a regular contributor to numerous news sites.

Due to its economic and political stability, the fair and transparent legal system, the extensive and reliable infrastructure and efficient capital market, Switzerland is an attractive destination for most foreign investors.

In addition, Swiss cantons offer various tax incentives because local authorities want to attract foreign companies and entrepreneurs to opt for the Switzerland incorporation procedure and establish their businesses in Swiss jurisdictions. Some cantons even offer to waive taxes for new companies established in their jurisdiction for up to 10 years.

The stock corporation (AG) is the preferred form of a company by foreign investors who decide to incorporate in Switzerland. However, it’s worth mentioning that the limited liability company (GmbH) has been used more over the last years because it has a less regulatory structure.

What to consider if you invest in Switzerland?

The strong points of Switzerland as a business and investment location are:

– It has a strategic location that offers a convenient gateway to European, Middle-Eastern and African markets.

– Highly skilled and educated workforce, due to the well-developed education system and world class infrastructures.

– A legal and regulatory environment favorable for business opportunities and open to foreign investments.

– Great opportunities for investments in high technology and high-end products, as the IT business sector is one of the best developed in the world.

Research and development activities are highly encouraged by the Swiss government and even sustained through dedicated programs, especially in the field of nanotechnology.

However, like any other business location, the country does present some weak points that need to be taken into consideration before starting the procedure to incorporate in Switzerland. The Swiss market is very competitive; therefore it may be difficult to bring in new business ideas without a solid business plan to back them up.

Because of the bilateral agreements in order with the EU, Switzerland also has to face strict regulations and standards, especially in relation to product quality and packaging. In addition, there are specific Swiss regulations for pharmaceutical products, cosmetics, detergent, and chemical products.

On the other hand, the Swiss government has a very business-friendly policy for foreign direct investment and it allows all the 26 cantons to establish their own investment policies in order to attract foreign investors. Therefore, it’s important to decide on the specific location for the Swiss incorporation procedure, as some cantons offer foreign investors tax exemptions and other forms of tax incentives.

Another important advantage is that there is no screening done for foreign investors, except for certain industry sectors, like telecommunications, where certain levels of performance are required for companies to qualify for tax exemptions or reductions. Other industry sectors that need special authorizations are banking and insurance, where companies are required to obtain authorization from the Swiss government.

How safe is it to invest in Switzerland?

Switzerland has signed various investment protection treaties. Out of all the signed treaties, more than 100 are already in force. The country was never involved in major international scandals regarding foreign investments made in Switzerland, due to its liberal and transparent foreign investment policy.

Anyone is free to opt for the Swiss incorporation procedure, regardless of nationality. However, in the case of companies registered in Switzerland, the board of directors must consist of a majority of Swiss residents. Foreign companies are also allowed to acquire the majority stake of local Swiss companies.

Therefore, if you’re thinking about opting for Switzerland incorporation to start a new business or to invest in Switzerland, this should be a relatively simple procedure, especially with the help of experts in this field to handle the paperwork and make sure that all legal requirements are met.

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