Switzerland is undoubtedly a beautiful location; much sought after by tourists as well as inbound executives (and their spouses!) and investors. However, as confirmed by a recent global survey by UBS, Switzerland has a very high cost of living compared to other locations and certain skill shortages within the workforce.
According to a survey by Arthur D. Little, some 55 per cent of Global Headquarters that relocated in 2002 outside their country of origin chose Switzerland. So what tips the scales in favour of Switzerland?
Cost of Living--Not Really!
Ever heard of the Big Mac Index? It is a flan-standard that The Economist magazine came up with to compare prices and buying power worldwide using the price in US Dollars of an almost globally marketed Hamburger. Switzerland was the leading country of the Big Mac Index as of January 15, 2003, quoting a price of U$$5.04 for a Big Mac, compared to the USA with US$2.65 and the United Kingdom with US$3.61.
In short, a Big Mac costs more in Switzerland than in any other country in the world. This is certainly not a rigorous statistical analysis; however, it is Indicative and supports the more serious UBS Dices and Earnings survey of 2003 that shows Zurich and Geneva to be the seventh and eighth most expensive cities in the world.
So clearly the high cost of living in Switzerland would not be assed as an attractive feature for investors. However, there are other advantages tot investors and relocating executives that outweigh the downside of the cost of living.
Legal System and Taxation
Switzerland provides a favourable corporate and personal taxation, and social security regime for companies with an excellent tax treaty and social security totalisation network.
With its flexible labour laves and multi-lingual society, together with the benefits Switzerland itself as a country has to offer, it is a key location for any international organisation attracting foreign investment.
For companies, the reasonably flexible Swiss private labour law allows investors to employ a multi-cultural international workforce and deal with employee matters in an easier way than in most other European countries.
The comparatively low corporate taxation is certainly for many cost-conscious organisations, a reason for relocating parts of their operations to Switzerland. These favourable corporate structures are used in combination with flexible legal structures, a large double taxation treaty, network, and the possibility...