The Swiss economy poses among the most developed economies in the world. The economy has even gone ahead to claim the top spot on two occasions: i. In the Global Innovation index of 2015 ii. The Global Competitiveness report of 2017 iii. Switzerland was ranked third in the richest landlocked countries according to the United Nations 2016 data. Liechtenstein and Luxembourg lead the way for the most affluent landlocked countries in the world. iv. Switzerland made a shortlist of three countries whose GDP per capita records above 0,000. The shortlists comes from a classification of countries that neither mini-states nor islands.
Who are Switzerland’s drivers to economic success?
Private companies in Switzerland have played a vital role in these achievements. Switzerland is a country well known for its banking discretion. No wonder the banking industry is one of the powering forces of the economy alongside the tourism industry. Companies in Switzerland have a correlation with the economic sectors just like most of the other countries in the world. The labour apportionment of different sectors may drive aspects like their size. Agricultural companies in Switzerland are the least in number. Only 1.3% of the population from a study in 2006 had invested themselves in the agricultural sector. The government is highly protective of this sector. To encourage domestic production of consumption goods in this sector, high tariffs have been implemented and domestic subsidisations made extensive. 70% of the Swiss’ agriculture is subsidised. Manufacturing companies in Switzerland hold the larger minority, and by 2012, 27.7% of the population was delegated to this sector. Companies in Switzerland have earned a reputation and claimed a large share in the watch market. Most of the globe’s high-end watches and clocks have their origins from Swiss companies. They claimed total revenue of 0 billion from exporting watches in 2011. They claimed the highest value; however, China claimed the top spot for the number of watches exported.
Companies in Switzerland have also focused on industrialisation.
Switzerland is the home to pharmaceutical giants like Roche and Novartis. They have contributed to Switzerland challenging the global pharmaceutical market and crediting it to be among the best. Switzerland is also home to the largest dealers in construction material, LafargeHolcim. Food processing giants such as Nestle and chemical companies such as Sarnafil are also based in Switzerland. Most of Switzerland’s labour force works in the service sector. You can now deduce why the banking and tourism industries are so popular. The Swiss Banking industry claims most of the Swiss workforce where it comprises of 5.6%. What’s more, 11.6% of Switzerland’s GDP is contributed by the finance sector. 5.4 trillion Swiss Francs were under the management of banks in Switzerland in 2009. Billions more have flowed through the responsibility of these banks in the succeeding years; for example, 960 billion Swiss Francs worth of assets was under the management of Swiss banks. Companies in Switzerland have contributed to the development of infrastructure that is attractive and accommodative of tourism. From an analysis in 2010, 14.9 billion was the gross value of the tourism industry and amounted to 2.9% of Switzerland’s GDP. Hotelier services, transport services, lodging services and eating are part of the market for companies in Switzerland operating in this industry. Companies in Switzerland have utilised the opportunities brought about by trade and has catapulted the country to the top 20 countries lists in terms of the value of imports and exports where they were recorded at 08 billion and 99 billion respectively in 2011. Some companies operating in Switzerland are German courtesy of the trade treaties they have signed making latter Switzerland’s largest trading partner.
Companies in Switzerland can be structured from a selection of 7 types of structure. They include:
a. Joint-Stock Company/corporation (AG/SA) This the most common type of structures adopted by companies in Switzerland. The corporations are legally independent. At least one of the board members or one of the directors should be a legal Swiss and have sole signatory rights. Shareholder’s equity in such a company should be a minimum of CHF 100,000 and half of this amount must be cleared.
b. Sole proprietorship This is a company that has a single owner. It comes second on the list of the most common types of companies in Switzerland. The individual must be a Swiss resident. Individual entrepreneurs, freelancers and small businesses are all under this category of companies. These companies feature unlimited liability. When the sales are more than CHF 100,000 per annum, you have to register with the Chamber of Commerce.
c. General partnership This is like sole proprietorship only with more people running it. It has no limitations on capital and features unlimited liability. However, Swiss residential status is mandatory for all partners with at least one of their names featuring on the Company name; and a Swiss address is a must for the company. These organisations have to be registered under the chamber of commerce and maintain accounts of all profit and loss statements.
d. Limited partnership This type of company is a form of general partnership where two types of partners are featured: the general partner and limited partner. The former has unlimited liability while the latter only has liability up to an amount agreed upon.
e. Limited liability (GmbH/Sàrl) This is a company where its members have joint liability for the company’s debt until the registered capital amount has been attained. The members participate jointly in the management of the firm and nonmembers can also partake in it. The minimum equity for the shareholders is CHF 20,000 half of which must be fully cleared. One of the managing directors with signing authorisation has to be a Swiss resident.
f. Subsidiary This is a company that is legally independent; however, it has affiliations with a foreign corporation. It operates less like a branch of the parent company and more of a Swiss company. It can either be structured as limited liability or corporate company.
g. Branch This is a company that is financially independent but legally dependent on a parent company which is based in another country. The liability falls on the parent company, but the taxes are the liability to the branch independently. To operate a branch in Switzerland, you will need a Swiss citizen who has legal authorisation.